Tires Import/European Motorsports competes with new business model
Burlingame, Calif.—When the owner of Tires Import/ European Motorsports, Michael Yee, started his business on tax day, 1988, he said it was strictly a tire shop, buying from seven tire warehouses. But today, only 9 percent of his business comes from tires, and he has no problem with that.
“I grew up in the auto parts business and I realized early on that if it feels like you’re always a dollar too much, a day late and the part is always wrong, it’s time for a change,” Yee said. “Independent repair shops have a hard time competing in the tire business because tires are a commodity, and like the margins on hard parts, the margins on tires are narrowing. My business went from 60-percent tires to 9 percent in the past nine years since I’ve been at this location.”
The six-bay shop still offers alignments on its Hunter DSP alignment rack with laser alignment technology, and continues to sell tires, sourcing them from three local tire warehouses. It also remains a member of the California Tire Dealers Association because Yee said he wants to be a viable resource for his long-time customers as, not only a service and repair shop, but a tire shop with the knowledge to service and align tires correctly.
“A lot of shops don’t know how to do an alignment correctly,” Yee said. “They forget to adjust the ride control components and suspension for road tilt, or don’t check for tire wear before putting the car on the rack. Simple things like different tire size, belt slips and tread patterns can also throw off a camber, caster or tow before the alignment is even started. Inspecting the tires is the fundamental starting place when doing an alignment, and some shops fail to do even that.”
Yee added that modern alignment equipment and technological advancements in cars have cut down the time it takes to do an alignment, and some of the common mistakes, because the recalibration process takes less time and is computerized. But still, because the tire business has become a difficult landscape for independent shops to maintain a gross profit in, he said to do well in tires, service, not sales, must be the shop’s focus.
“The people who find me online and call in for a tire quote are going to find a better price somewhere else. I don’t necessarily work to bring in new tire business. I sell service. I sell time. I don’t compare myself to Costco or American Tire and I don’t try to compete with their prices. My tire customers are paying for my loyalty and the knowledge I’ve gained in undercar repair and alignments,” he said.
The fundamental shift in his business from tires to service and repair required a quick adaptation of his business model, additional training for his technicians, all five of whom have been with Yee for more than 10 years and are ASE certified, and it required the shop to invest in new diagnostic scan tool equipment and software.
The shop invested in a Bosch OTC scan tool as well as Launch’s first- and second-generation scan tools, which Yee said have worked very well. It also invested in PC-based software for BMW and Mercedes-Benz, which must continually be updated.
“We work on 70 percent European import cars now, with a lot of our work being computer-based diagnostics,” Yee said. “In this demographic, most of our customers drive luxury foreign imports, so we adjusted to equip the business to accommodate those vehicles. Beyond the scan tools, our information subscriptions to Identifix and AllData enable us to work on most of what we see,” Yee said.
For continuous training, Yee said he’s relied on ACDelco’s online training program and also attends seminars at Skyline College in San Bruno to keep updated on his SMOG certifications, which he said gives him a competitive advantage as his shop is located just next door to many other independent repair shops.
The shop is an ACDelco service center and uses ACDelco and Motorcraft parts for domestic makes, sourced through its local WDs, Parts Warehouse Distributor, WORLDPAC, IMC and SSF Auto Parts.
ACDelco also assisted Yee with the design and launch of the shop’s website, which he said is the only marketing he does beyond word of mouth.
“ACDelco has been an essential partner for our shop. I wouldn’t even have an updated website if it wasn’t for them. I’ve done word-of-mouth marketing for the past 27 years and each new customer I get, I give a piece of myself to. If I could offer a new shop owner one piece of advice, I’d tell them to be prepared to work hard, and be willing to give a piece of yourself to each customer. Don’t ever take your customers for granted,” Yee said.