Tire Dealers
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 11,000 tire dealers in the US sell tires and related services. Companies also sell retreaded or used tires, automotive supplies, and accessories. Tire-related services include mounting, balancing, alignment, tire pressure monitoring, rim reconditioning, wheel refurbishing, and scrap tire disposal. Companies may also perform general automotive maintenance and repair, such as oil changes and brake jobs, or offer roadside assistance services. Some companies also handle tire replacement and related services for corporate fleets.
Competition From Alternative Sources
Tire dealers compete with a variety of alternative sources, including service departments of automobile dealers, auto supply chains and repair shops, manufacturer-owned retail stores, mass merchandisers, warehouse clubs, and Internet dealers.
Complex Inventory Management
To maximize product availability, tire dealers must maintain adequate inventory across numerous brands, sizes, and price points.
Industry size & Structure
The average tire dealer operates out of a single location, employs fewer than 10 workers, and generates about $3 million annually.
- The tire dealer industry consists of about 11,000 firms that employ about 193,000 workers and generate about $33 billion annually.
- The industry is concentrated at the top and fragmented at the bottom. The top four firms account for 33% of industry revenue, while the top 50 firms account for 52% of industry revenue.
- The industry includes national and regional chains, franchises, and independent operators.
- Large companies include Reinalt-Thomas Corporation (Discount Tire), Sumitomo Corporation of Americas (Big O), and Mavis (NTB and Tire Kingdom). Some large tire manufacturers are vertically-integrated and have retail operations.
Industry Forecast
Tire Dealers Industry Growth
Recent Developments
Sep 26, 2024 - Lower Sales, Inflation
- Sales for auto parts, accessories, and tire stores fell 0.2% in June 2024 compared to a year ago and were down 3.3% from a month ago, according to the US Census Bureau. Producer inflation for tire dealers declined 5.2% in July 2024 compared to a year ago, according to producer price data released by the US Bureau of Labor Statistics (BLS). Employment and labor costs both increased in July 2024 compared to a year ago. Employment grew almost 2% in July, and average wages for nonsupervisory employees were up 7.5%, reaching $21.53 per hour, per the BLS.
- Consumer confidence levels increased in August 2024, according to data from The Conference Board. The Conference Board’s consumer confidence index was 103.3 in August 2024 from 101.9 in July 2024. Dana Peterson, chief economist at The Conference Board, noted that confidence was the highest among those over age 35 and those in the income category of over $100,000. Plans for large appliances and smart phone purchases rose on a six-month average basis. Plans to buy a home dropped to a 12-year low while plans for car purchases improved on a six-month average basis.
- The US Tire Manufacturers Association has projected an increase in replacement truck tire shipments in 2024, according to FleetOwner.com. Total replacement truck tires are expected to total 22 million units, a 6.9% increase over 2023. More construction projects, anticipated active truck utilization, and improved spot rates during the second half of the year are expected to support tire sales growth after a sluggish 2023.
- According to a new Modern Tire Dealer survey, 53% of tire retailers reported their tire unit sales were down by an average of 10.9% in Q1 2024, and 56% of tire retailers reported dollar sales were down by an average of 12.2%. About 24% of tire retailers reported flat tire unit sales in Q1 2024, and 19% reported their dollar sales were also flat, per the State-of-the-Industry Survey. On a positive note, nearly a quarter of tire retailers reported their tire unit sales were up 10.8% during the first quarter of 2024, and 25% of tire retailers said their dollar sales increased by an average of 9.6% during the same period. When asked about the difference between bottom-line profitability between Q1 2023 and Q1 2024, 23% of tire retailers said their profitability increased by an average of 9.4% during the period.
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