Winter is just around the corner, along with all it brings with it. For Michael Laframboise, dealer principal at Kingston Dodge Chrysler (Kingston, ON), that’s a good thing. In 2006, he was looking for a way to boost business in the parts and service departments and he decided to go for a bigger share of the winter tire business. “We had the idea that we could set new goals for tire sales,” he explains. It was something we could all wrap our heads around. And we tripled tire sales that first year.” 

With a huge inflated tire out front, everyone knows he’s in the tire business. And he’s benefiting from being at the leading edge of a national trend.

Winter tire usage increasing 

In 2005, a survey sponsored by Transport Canada and the Rubber Association of Canada showed that Québec had the highest winter tire usage in Canada (84%), followed by Eastern Canada (57%).  “Surprisingly,” said the report, “only 29 percent of Ontario drivers make use of winter tires. British Columbia is next at 28 percent, followed by Alberta at 22 percent and there’s only 10-percent winter tire usage in the Prairie provinces.” Nationally, with 42 percent of Canadians using winter tires, the survey concluded that, “the trend is unmistakable: more and more people are switching to winter tires.”

Three years later, that trend was confirmed by a second survey, conducted by RBC Insurance. Usage in Quebec had climbed to 96 percent and Atlantic Canada reported that 72 percent employed winter tires. Ontario drivers were then at 43 percent, BC was up to 48 percent,  Alberta close to doubled its numbers (to 41%) and there were major gains in Manitoba and Saskatchewan (up to 31%).  The national average showed an increase of 15 points, to 57 percent reported in 2008.

Quebec legislation mandating winter tire use, which kicked in last December, played a big part. “With the new legislation in Quebec, awareness was much higher,” says John Farrow, Laframboise’s veteran parts manager. “People were thinking it might become mandatory in Ontario too, and that probably encouraged them to buy winter tires.” Plus, there was a lot of snow last winter!

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Currently, winter tire legislation in other provinces doesn’t seem imminent. But the idea was unexpectedly popular in Alberta where a March 2006 blog asked Albertans what they thought about mandatory winter tires. Over one-third said they weren’t necessary and were too expensive. But 31 percent thought such legislation was long overdue and another 25 percent said they favoured mandatory winter tires, along with a mandatory annual checkup.

Dealers and OEMs play a role

A discount on insurance premiums isn’t behind the increase in sales, although drivers with winter tires are less likely to get into a fender bender and that itseldf is a selling point. Brian Smiley, media relations coordinator at Manitoba Public Insurance wrote that while MPI does not provide a break on premiums to people with winter tires, there is a discount of up to 25 percent for drivers who are claims-free (and conviction free). 

Auto dealers and their OEMs can take considerable credit for the upward trend. Dealers I talked to report that their manufacturers offer excellent support in the form of rebates and incentives which lets them sell tires at very competitive prices.

That’s how Kingston Dodge Chrysler can boast, “We Sell Tires for Less” and can keep that promise. Laframboise says they compete head-on with the big-box stores and tire specialists because of the Chrysler program. “We do our “Buy Three, Get One Free” sale from early October into January. It’s a great selling tool and it’s good for getting cars in for service.”

Their goal this year is to equal or better last year’s sales which were excellent. Before they started the program, Farrow says, they were selling around $5,000 a month in tires. “Last winter we peaked at $60,000 a month.” He intends to do an even better job taking care of his current customers. “Quite honestly, we were overwhelmed by the demand last year. We want to get the changeovers done more smoothly. We’ll be more proactive about getting customers into the shop early in October.”  

Tires as a customer retention tool

With half a dozen major snowfalls in a typical winter, Vernon BC doesn’t get as much snow as Kingston (where the yearly average is over 250 mm).  But Ross Blankley (GM at Watkin Motors - Ford) says most people there have winter tires and always have. 

However, four years ago they saw too many customers defecting to the smaller shops, especially for tires. “We wanted to make sure they didn’t need to go anywhere else for any reason whatsoever,” says Blankley. “This is about long term customer retention.”

Blankley took several steps to demonstrate that selling tires is part of the dealership’s culture. There’s a tire display in the showroom and a massive rack wall of tires in the drive-through. The biggest traffic driver is the big truck full of tires parked out front, which brings in lots of off-make owners to check out the prices. Blankley extends the service hours through the changeover months and willingly dedicates a couple of service bays to the tire business. 

Like Chrysler and several other manufacturers, Ford has rebates in place, which means Watkin Motors can be extremely competitive. “We can usually undersell the tire stores,” said Blankley. “We probably sold 1000 tires between mid-October and mid-December last year.”

At Sherwood Chevrolet in Saskatoon, this year’s winter tire promotion focuses on price, and winter tires start at $89.95. “Tires are huge” in the 18-bay shop where Michael Higgins wears the hats of both service manager and customer relations manager. Service consultants are the front line when it comes to tire sales.  “We’re always selling around the tire”, says Higgins, “and that generates the most service traffic. We do a complete check of the front end when a customer comes in to change over tires.” 

Tire storage a natural complement

These dealerships don’t stop at tires when they’re looking for other opportunities to build business in winter. Tire storage is a natural.

Kingston Dodge Chrysler’s Farrow says free storage is often the deal-maker when it comes to selling a set of winter tires. They store more than 200 sets of tires, an increase from 35 sets in the first year.  Storage prices are low in Kingston, he admits, so “we’re not giving that much away.” 

He keeps a careful database of the tires which is mined regularly for potential sales. “We record tread depth and we use that to identify potential customers. Then we get in touch when there’s a sale coming up.”

Sherwood Chevrolet offers tire storage for a nominal amount and it’s such a popular service they’re thinking about adding another container. So does Wheaton Chev Hummer in Regina. Parts manager Larry Mittermayr says they started last year with off-season storage. “It’s going very well, especially with people who don’t have a garage.”

Tire storage doesn’t need to be a hassle. And dealers don’t even have to provide their own storage space. One Toronto-based company called Tire Storage Solutions (www.tirestoragesolutions.ca) provides dealers with everything they need, from a dedicated on-site tire-storage facility to third-party off-site storage… plus the software and hand-held scanners to easily keep track of the stored-tire inventory. (See Canadian auto dealer, September ,2009 – Products.)

John Farrow credits Chrysler with two other programs that work for him. A value line of wiper blades is an easy sell, and the seasonal maintenance special – complete with premium coffee mug – is also a winner. Farrow says people love getting something free, and he believes the premium does bring in customers.

Sherwood Chevrolet maximizes opportunities for winter with its pro-active business development centre. Staff has doubled and that ensures that customers are invited to come for a semi-annual inspection and get their tires swapped. 

The numbers are certainly there – both the statistics and the sales numbers. There’s opportunity in winter tires. So as the chilly season approaches, smart dealers say, “bring on the snow!”

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