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) and Sumitomo Corporation of Americas (TBC Corporation - Tire Kingdom, Big O). Some large tire manufacturers are vertically-integrated and have retail operations.
                              Industry Forecast
                              Tire Dealers Industry Growth
                              Source: Vertical IQ and Inforum

                              Recent Developments

                              May 22, 2024 - Sales Down in Q1
                              • 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.
                              • The total number of vehicle miles traveled in the US was up 0.7% in March 2024 compared to the same period a year ago, according to the US Department of Transportation’s Federal Highway Administration. The estimated number of miles traveled during the month was 275.5 billion vehicle miles. Most regions of the US experienced a slight increase in vehicle miles in March 2024, except the South-Atlantic, which saw a decrease of 0.7% in total travel miles year over year. Meanwhile, the North-East region saw an increase of 1.3% in total estimated vehicle miles in March year over year, the North-Central saw an increase of 1.3%, the West saw an increase of 1.3%, and the South-Gulf was up 0.5%. For 2024 year to date, miles traveled increased by 0.6% over the same period in 2023.
                              • Consumer confidence levels fell in April 2024 from March 2024, marking a third consecutive month of weakness, according to data from The Conference Board. The Conference Board’s consumer confidence index was 97 in April 2024 from 103.1 in March 2024. According to Dana Peterson, Chief Economist at The Conference Board, “Confidence retreated further in April, reaching its lowest level since July 2022 as consumers became less positive about the current labor market situation, and more concerned about future business conditions, job availability, and income.” Peterson added that confidence declined among consumers of all age groups and for all income groups except those in the $25,000 to $49,999 range. Plans for vacations, home purchases, and large appliances decreased on a six-month basis.
                              • The US Tire Manufacturers Association (USTMA) has projected lower tire shipments in 2023, according to American Recycler News. Total tire shipments for 2023 are expected to total 327.7 million units, a reduction from the 332 million units predicted in March and lower than the 332 million tires shipped in 2022. The original equipment shipments are projected to have a total increase of 3 million units, with passenger tires expected to grow by 7.9% and light truck and truck tire shipments to fall by 4% and 1.3%, respectively. Replacement tire shipments are projected to have a total decline of 7.3 million units, with mixed results from replacement passenger (0.2%), light truck (-5.6), and truck (-21.3) shipments.
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