Share Our Site
Mid-Year Report: Sun Auto Tire & Service continues to expand
PHOENIX — Although Sun Auto Tire & Service Inc.'s growth strategy is aggressive, company officials describe the business' approach to acquisitions and the tire-shop legacies involved as thoughtful. GB Auto Service Inc., a Greenbriar Equity Group L.P. portfolio company dedicated to the retail tire and auto service sectors, rebranded its corporate identity in early June to Sun Auto Tire & Service.While the name won't affect customers, it is an indicator of the company's growth, according to Jeffry Gardner, marketing vice president at Sun Auto Tire."We've worked hard to develop scale, and we have grown very quickly," Mr. Gardner said. "(The name change) is a natural kind of evolution."The company, which operates nearly 200 auto service stores across the U.S. Southwest and in California, will continue to operate under 10 brand names in the retail markets it serves in Arizona, California, Nevada, Oklahoma and Texas.Sun Auto Tire said it can serve more than 1 million customers per year through the 1,500-plus service bays in operation at its stores.The company — started by Greenbriar Equity Group in 2017 — said the decision to rebrand builds on the well-established "Sun" brand and aligns it more strategically with long-term expansion plans."Recent acquisitions brought us to a critical growth point that enables our unified leadership structure to capitalize on across-the-board efficiencies," Sun Auto Tire CEO Frank Kneller said.The rebrand will help align employees, suppliers and industry contacts with the corporate Sun name, Mr. Gardner said. The Sun Auto Tire name — taken from the Sun Auto Service/Sun Devil Auto chain it acquired in July 2020 — will help increase the equity company's visibility, particularly on the mergers-and-acquisition side, he added."To let people know we're there, and we're interested in helping maintain their legacy and help them find a path to an exit should that be what the (tire shop owner) wants."Sun Auto Tire ranks as the seventh largest independent retail tire dealership in the U.S., according to Tire Business calculations. The company does not disclose sales revenue. Announcement of the corporate rebrand follows a series of acquisitions, extending the company's reach in California, Oklahoma and Texas."Over the past several years, we've carefully crafted a strong portfolio of automotive service brands that are recognized and trusted leaders in their respective markets," Mr. Kneller said."From a big-picture perspective, the Sun brand enjoys a strong leadership position across several of our regions. It made sense for us to adopt it to capitalize on the brand's strength, as a foundational element of our continued growth path."Most recently, Sun Auto acquired six locations in Texas, including four shops in San Antonio that were part of Monro Inc.'s Car-X Tire & Auto network. Because the stores were part of another franchise, they will be rebranded with the Sun Auto Tire identity. Sun Auto Tire also took over a pair of Foundation Auto Repair shops, in Austin and Round Rock, Texas. That deal closed April 23."This expansion is especially significant, because it brings the important and strategic market of San Antonio into our Texas footprint," Sun Auto Regional Vice President Jim Ramsey said. "In the months and years ahead, we look to continue to grow, serving the people of Texas with exceptional auto repair and customer service."The Car-X Tire stores in San Antonio previously were owned/operated by franchisee Raj Mulwani. The acquisitions bring to 42 the number of tire and auto service locations that Sun Auto Tire operates under that brand in Arizona, Nevada and Texas. Financial terms were not disclosed. The company also operates locations in Houston and the Dallas/Fort Worth area under Lamb's Tire & Automotive and Driver's Edge brands, respectively.In California, Sun Auto Tire acquired Fresno, Calif.-based Goodguys Tires & Auto Repair and its nine stores. Prior to that, the Phoenix-based company bought Houston-area ServiceONE Automotive (three stores); Austin, Texas-area dealer Reliable Automotive (three stores); Tate Boys Tire & Service of Oklahoma (seven stores); and Phoenix-based Sun Devil Auto and Sun Auto Service (32 locations). "It's important to be nimble as well and adapt," Mr. Gardner said. "When we're talking about such a fast growing company with M&A and greenfield development, you have to be able to adapt quickly."Sun Tire looks to keep growing this year, he said, though he declined at this time to give specifics."We intend to continue our growth quite aggressively," he said.Mr. Gardner noted the company has "several" greenfields in planning and under construction, including a store in Austin, Texas, that the company plans to open this summer.Sun Tire also plans to acquire more existing retailers."It's exciting to be a part of and will continue to be," Mr. Gardner said.
Sales, challenges rise for Sumitomo Rubber North America
RANCHO CUCAMONGA, Calif. — Sumitomo Rubber North America (SRNA) Inc. lost market share during the past couple of months while dealing with rising back orders and shipping disruptions, factors that are negatively impacting the entire tire industry, SRNA officials said during the company's quarterly online Dealer Resource Forum, June 15. "SRNA continues to experience record sales growth, despite what I would characterize as severe supply challenges affecting U.S. imports. Unfortunately, since the last time that we had the forum (in February) there have been no really evident signs of improvement in import supply so far in 2021. For us, as for many other tire suppliers, tire supply is still very tight as demand is outpacing supply," Ron Papcun, senior vice president of operations, said. SRNA, like many companies, said it is enjoying increased customer demand for its products, but it can't fulfill all orders immediately because of backlogs in domestic production and shipping delays for imported products. The company's WildPeak light truck tires are experiencing more back orders than passenger tires, company execs said, while its WildPeak Trail tire sales continue to increase. Meanwhile. the back orders for its Ohtsu brand products have spiked in the last 60 days due to constrained production, prompting the company to put its container program on moratorium. Prices are increasing rapidly on nearly everything, from raw materials to transportation and shipping fees, prompting SRNA to consider a third price hike this year. On the bright side, SRNA's Falken brand market share grew versus the Sumitomo Rubber Industries portfolio. "Once we ride out the major disruptions that was COVID last year, we'll end up with some favorable market share results as a company," Matt Leeper, vice president of sales, said. Meanwhile, SRNA said it is outperforming the market with 52.5% growth in truck tire sales, compared with market growth of 30.6% year-over-year through May. Company officials said the commercial tire market is boosted by 5% growth in the construction market, led by residential building; expanded manufacturing for the 12th straight month in a row; and a continued strong pace in trucking. "While we are making gains with increased production rates out of our Buffalo (Tonawanda, N.Y.) plant, it's hard to get ahead of the availability gap when sales are up over 50% YTD. We will see supplemental relief from Japan come the third quarter," the company said. Demand spike "Miles driven dropped off a cliff when COVID first hit. It's rebounded nicely. … I would think that would have had a negative impact on the demand for tires. However, it has not," Mr. Leeper said. He attributes the heightened demand primarily to consumers having more time (due to stay-at-home orders and business shutdowns last year) and money (thanks to federal stimulus funds). Tires are being replaced with more tread still left, there are more average tires per transaction and people who are suddenly working from home have more time to run errands, such as handling vehicle maintenance. He surmised an increase in online tire shopping has resulted in more units sold, since an in-person dealer consultation may have determined that only two new tires were necessary, instead of four. Another factor is that shortages in new car inventory have prompted people to keep their old vehicles and replace the tires. Shipping chaos The reopening of the U.S. economy is driving demand so shipping ports and rail terminals are experiencing bottlenecks as importers replenish record low inventories, Mr. Papcun said. Bottlenecks across the supply chains are slowing the flow of shipping containers: terminal operators are seeing record volumes; retail capacity is tight, causing delays; and there is a lack of truck drivers and trucking equipment. These are contributing to rising import costs, he said. There is a lack of vessel capacity; a shortage of containers; and rising fuel prices, tariffs and penalties on the U.S. side. The net effect: U.S. importers are passing along some of these costs in the form of surcharges to offset some financial impact, he said. "The upside on the U.S. side is the economic reopening is happening now. It's driving demand. The COVID cases are on the decline for the most part, but the bottlenecks are still there as we continue to see record imports coming through a supply chain with fixed capacity," Mr. Papcun said. The situation not only is adding costs, but slowing down movement of tires to fulfill demand, he said. On the positive side, the tire shortages may force consumers to choose to wait for a preferred brand or switch to an alternate brand based on availability. "This will create opportunities to capture customer interest for suppliers that have inventory," he said. While nobody knows when the supply chain bottlenecks will end, some predict by the end of the year. "It's very probable, like with the microchip issue, that we will be dealing with these issues for the rest of 2021. So I think that just forces companies to really think about how they are managing their supply chains, how they need to be flexible and adaptable through the new environment in case this goes on for another six months-plus," Mr. Papcun said. Price hikes Due to rising shipping fees and raw material costs, several tire makers have raised their tire prices recently. Some major companies have issued three price hikes so far this year. SRNA raised prices by up to 8% in May in the U.S. and Canada on Falken- and Ohtsu-brand passenger, light and medium truck tires after issuing a comparable price increase on passenger and LT tires in January. The company previously raised prices in the U.S. and Canada on Falken- and Ohtsu-brand medium truck tires last December by up to 6%. So is a third SRNA price increase coming? "We're likely to be forced into a position where we'll take another price action," Mr. Leeper said. "I do believe we took a slightly bigger chunk with our two price increases than some of our competitors, but the deck we've been dealt in this current round is high shipping costs and tariffs. There is some reality with our business that we will have to take price increases just to make sure we stay profitable. "We will watch the market. We certainly don't want to move our brand out of the appropriate position. We do take great care in doing that analysis before we take price actions. But with the way it's looking now, I'd say we'd be forced to look real hard at a price action and likely take one here in the next couple months." COO Darren Thomas added that some tire makers' price increases didn't fully materialize. "So we're very cautious of that issue but we do have a business to run. The fact of the matter is, what we've taken on import tires for duty and what we're paying on a container, we have not recovered all of that with our existing price increases. And it doesn't even come close to addressing the material impact. So the fact of the matter is, there is still a significant gap between the value of our price increases and what we are incurring in costs."
- About Us
- Contact Us
- Tire Registration
- Marketing Support
- Dealer Login
- Become A Dealer
- Sutong Limited Warranty