For 52 years, Les Schwab Tire Centers Inc., had an exclusive, multi-state territory with Toyo Tire USA Corp. According to Modern Tire Dealer (MTD), that deal, which effectively locked out other tire dealers (including online retailers) from selling Toyo-branded products in the northwest corner of the U.S., has come to an end.
As of Jan. 1, 2019, Toyo is open to doing passenger and light truck tire business with other tire dealers in Oregon and Washington, plus the portions of Idaho, northern California, Montana and Nevada which previously were locked up in the Les Schwab territory.
Randy Gaetz, senior vice president of sales for Toyo, said that doesn’t mean that the tire manufacturer has parted ways with Les Schwab. It simply means the Oregon-grown dealer, the fifth-largest independent tire dealer in the U.S. with 421 stores, no longer has the exclusive rights to sell Toyo passenger and light truck tires in those states.
“We will continue to sell tires to Les Schwab,” Gaetz said in an interview with Modern Tire Dealer. “Les Schwab was our biggest customer.”
Gaetz said Les Schwab will remain one of Toyo’s top 10 customers.
Les Schwab does maintain an exclusive territory for Toyo-brand commercial truck tires in Oregon and Washington through the end of 2019. That truck tire agreement continues on a year-to-year basis, and Gaetz says Toyo and Les Schwab will sit down to talk about renewing that commercial territory agreement in the fall.
So Toyo is working to reach into every viable market in the former Les Schwab PLT territory. Feb. 14-16, the company’s representatives, including Gaetz, attended their first annual meeting with Point S tire dealers in the U.S. Toyo has joined the ranks as one of five preferred partner vendors with Point S.
The Point S dealers are expanding across the U.S. but remain heavily concentrated in the northwest corner of the U.S., as Tire Factory Inc., dba Point S USA, is based in Portland, Ore.
"Toyo arrived in our warehouse last week," said Tire Factory CEO Walter Lybeck.
Toyo participated in the trade show and sales leaders hosted group meetings with dealers throughout the Point S meeting to familiarize them with the company’s products and services, such as the 45 day/500-mile warranty available on most of its tires.
Gaetz said the change in relationship with Les Schwab has opened up other opportunities for Toyo in the region.
Gaetz said Toyo had “a very good year” and “substantial,” “excellent growth” with American Tire Distributors Inc. in 2018.
He said Toyo USA had its “best year ever” in 2018.
Gaetz does expect the changes with Les Schwab to ding the company’s sales in the region, yet, he sees potential. “It’s going to take time to build it back.”
How long? “Two to three years.”