Issue link: http://read.dmtmag.com/i/687402
FOCUS PSB Tire & Wheel www.PowersportsBusiness.com Powersports Business • June 13, 2016 • 19 Tire manufacturers have generally agreed to classify their tires into the nine categories seen in these charts. Using these categories, CDK Global Recreation analyst Hal Ethington has compared the seasonal dollar sales by category in each of the past 12 months for both Cana- dian and U.S. dealers. Differences between the U.S. and Cana- dian markets are helpful in understanding the functions of each. U.S. ATV/UTV sales, with a more moderate climate, are steady at 19 percent of dollar sales throughout the entire year. But, Canadian sales in that same class are high in April and May and substan- tially lower in the winter months. Even with this seasonal swing, ATV/UTV tires contrib- ute a much higher 37 percent of tire sales for the year in Canada. Margins vary greatly between the two mar- kets. U.S. dealers generate margins ranging from 23 percent with off-highway tires, to 36 percent on scooter tires. In Canada, mar- gins run from 25 percent on "with wheel," to 40 percent on scooter tires. Looking at the two largest categories, U.S. dealers get 32 percent gross margin on custom/ cruiser/touring, while the Canadian dealers get six points more at 38 percent. In ATV/UTV (shown as only "ATV" in the margin charts), U.S. dealers get 29 percent gross margin, which is essentially the same as Canadian dealers, who average 30 percent. PSB CDK GLOBAL CONTINUED FROM PAGE 16 opportunity for a great market. The adventure gear market is something we haven't had. It was a great opportunity to take Olympia and add distribution to it and not have to compete with anybody else on that brand," he added. Olympia also gives MTA a chance to serve BMW dealers, as it now has a solid adventure gear brand to offer, along with Five gloves and a variety of helmets and hard parts that comple- ment Olympia and the BMW rider's lifestyle. In the first few months of 2016, MTA has also signed distributor agreements with more than a dozen brands, including TOM TOM GPS, UFO plastics, ACF-50 anti-corrosion compound, Pivot Works bearings and seals, Pro Sport waterproof bags, Hot Cams, Cylinder Works, Vertex Pistons, TM Designworks, Met- ric Concepts, Stadium suspension, K&L and Winderosa gaskets. "The company is going good. We've had steady growth," Laird said. To accommodate its recent growth, MTA is hiring additional staff, investing in technology and increasing efficiency at its warehouses in Choudrant, La.; Greenville, S.C.; Perrysburg, Ohio, and at its headquarters in Corona, Calif. MTA is also going to add a fifth warehouse loca- tion this year. "We're definitely going to be expand- ing this year," Laird said. "We're looking at transit times, and we want to make sure that we can get all the dealers handled in a day or two, so we'll be looking at areas where transit times may be three days and see if we can shorten that up." With all of this improvement and the upcoming changes, those at MTA are happy with the position they're in and where they're heading in the future. "As a company, we're really excited to see what the future brings because with the growth and the reputation that we're getting, we're having a lot of companies come to us and contact us and want us to pick up their lines. That's kind of flattering to know that everybody's coming and looking at you and seeing what you're doing, and they want to be a part of it." PSB MTA TIRES CONTINUED FROM PAGE 18 U.S. TIRE GROSS MARGIN PERCENTAGE 2016 BY TIRE TYPE CANADIAN TIRE GROSS MARGIN PERCENTAGE 2016 BY TIRE TYPE 25% 30% 31% 32% 35% 37% 38% 38% 38% 40% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% With Wheel ATV Trailer Dual Off Highway Hypersport Road Race Sport Touring Custom/Cruiser/Touring Scooter 23% 24% 25% 27% 28% 28% 28% 29% 30% 32% 36% 0% 5% 10% 15% 20% 25% 30% 35% 40% Off Highway Road Race With Wheel Bicycle Dual Hypersport Sport Touring ATV Trailer Custom/Cruiser/Touring Scooter Source: CDK Global Recreation