Goodyear, Bridgestone to wholesale nationwide

Faced with consolidation among tire dealers and distributors nationwide, rivals Bridgestone and Goodyear plan to combine their wholesale tire distribution network into a new firm that will operate 81 tire depots throughout the nation.

Nashville-based Bridgestone Americas Inc. said the new venture, named TireHub LLC, will help independent tire dealers continue to get tires made by the two manufacturers.

The decision to form the venture follows the rise of online tire purchases by consumers, particularly low-priced imported tires, and attrition among independent tire dealers as car repair chains such as Pep Boys expand nationally.

In a report filed Monday with the U.S. Securities and Exchange Commission, Akron-based Goodyear Tire and Rubber Co. says TireHub will launch in June if regulators approve the deal. The venture would distribute more than 10 million tires each year and cost $40 million to start with the companies sharing the startup costs equally, the report says.

TireHub will be based in Atlanta. Bridgestone would put its current tire wholesale warehouse business in the new venture.

“The tire industry is competitive, chock-full of hundreds of brands and thousands of unique sizes which results in complexity for our channel partners,” Bridgestone executive TJ Higgins said in a statement released by the company. “The industry has seen some consolidation in tire distribution. Of those distributors that remain, some carry less depth and breadth of premium products, and that means independent dealers, retailers and consumers have less access to products from Bridgestone.”

Higgins, president of Bridgestone’s integrated consumer tire group in Canada and the United States, said TireHub will help Bridgestone reach motorists replacing tires on their late-model vehicles and also build sales of high-value tires. These include run-flat tires and high-rim-diameter products including the Bridgestone Dueler Alenza Plus.

Tire dealer Chad Porter, a member of the Tennessee Tire Dealers Association board of directors, said the new venture could help steer online business to his store. Motorists ordering new tires online are often directed to nearby tire dealers for installation.

“They can ship the tires to us. This is just another avenue to drive people to my door,” said Porter, of Porter’s Tires in Morristown, Tennessee.

Tire sales at independent tire dealers in the United States dropped 5.3 percent last year to 137 million tires, market researcher GfK Global reported in February.

Meanwhile, online sales are on pace to account for 12 percent of the tire market in five years, the trade journal Tire Business reported.