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 16 workers, and generates about $3 million annually.

    • The tire dealer industry consists of about 11,000 firms that employ about 181,500 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

                              Feb 24, 2023 - Growing Appeal of Online Tire Sales: Survey
                              • More US consumers are willing to buy tires online, climbing from 10% in 2017 to 29% in 2022, according to a survey titled “Smart Tire Retail: How US Drivers Take Care of Their Tires” conducted on behalf of Anyline by YouGov. The survey of 1,041 US consumers found that 43% of consumers said they would consider purchasing tires online if they had more knowledge about the tires they were buying. About 64% of consumers said the biggest indicator that it is time to buy a new set of tires is worn tire tread, and almost half relied on an in-person mechanic/salesperson to help them find the right set of tires. Top pain points during an in-store purchase include being bothered by an up-selling salesperson (37%), waiting too long in the store to get new tires (37%), and being unsure of what they were buying (30%).
                              • Consumer confidence levels declined in January 2023, following an increase in December 2022, according to data from The Conference Board. The Conference Board’s consumer confidence index fell to 107.1 in January 2023 from 109 in December 2022. According to Ataman Ozyildirim, a senior director of economics at The Conference Board, “Consumer confidence declined in January, but it remains above the level seen last July, lowest in 2022. Consumer confidence fell the most for households earning less than $15,000 and for households aged under 35.” While plans to purchase homes have cooled, plans to buy cars and appliances have held steady, per Ozyildirim.
                              • US replacement passenger and light truck tire shipments declined in 2022 as consumer demand waned, according to Modern Tire Dealer. Passenger tire shipments in the replacement channel decreased by 2.6% in 2022 compared to 2021, totaling 216.1 million units, while replacement light truck tire shipments fell nearly 3%, totaling 37 million units. Meanwhile, original equipment (OE) passenger tire and light truck tire shipments each increased by 10% in 2022 over 2021, totaling 41.5 million units and 6.2 million units, respectively.
                              • Electric vehicle sales in the US jumped by two-thirds in 2022 even as the broader auto market decreased, according to the WSJ. Fully electric vehicles accounted for nearly 6% of all cars sold in the US in 2022, totaling more than 807,000, up from a 3.2% share the previous year, according to Motor Intelligence data reported by the WSJ. Meanwhile, total US auto sales dropped 8% in 2022 from a year earlier. Tesla continues to command the US electric vehicle market, but its share fell to 65% in 2022 from 72% in 2021 as competition continued to grow in the EV space. The Ford Motor Company placed second for EV sales, accounting for 7.6% of the US market for fully electric vehicles, followed by Hyundai Motor Co. and Kia Corp. combined for third place for 7.1% of the market. Offering consumers more models and price points are a priority for EV makers. According to JD Power data cited in the article, 53 EV models are on the market or will go on sale this year, compared to 625 separate vehicle models sold in the US in 2022. Tire dealers will likely continue to see a growing share of EV customers as consumers increasingly go electric or hybrid. The high instant torque of EVs can cause tires to wear faster.
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