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 10,900 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 10,900 firms that employ about 187,000 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

                              Jan 15, 2024 - Tire Shipments Expected to Fall in 2023
                              • 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.
                              • Consumer confidence levels rose in December 2023 for the second month in a row, following three consecutive months of declines, according to data from The Conference Board. The Conference Board’s consumer confidence index increased to 110.7 in December 2023 from 101 in November 2023. According to Dana Peterson, Chief Economist at The Conference Board, “December’s write-in responses revealed the top issue affecting consumers remains rising prices in general, while politics, interest rates, and global conflicts all saw downticks as top concerns.” Peterson added that the gains in consumer confidence were largest in householders aged 35-54 and households with income levels of $125,000 and above. Plans to purchase homes, autos, and large appliances rose moderately on a month-to-month basis as interest rates moderated.
                              • Nearly 20% of office space in major US cities was not leased as of Q4 2023, with the continuing popularity of remote work and a long-standing oversupply contributing to higher vacancy rates, according to Moody’s Analytics data in the Wall Street Journal. The 19.6% vacancy in the fourth quarter of 2023 was slightly higher than the 18.8% a year ago and is the highest vacancy rate since 1979. The top three US cities with the highest office vacancy rates in Q4 were all in Texas: Houston, Dallas, and Austin. Some industry analysts think the higher vacancy rate could linger due to the continuing popularity of working from home. Tire replacement is tied to driving habits, and remote workers are driving less than those who commute daily.
                              • Weaker consumer spending, lingering supply challenges, and inflation are expected to limit growth in the US tire dealers industry, which is projected to grow at a nearly 2% CAGR from 2022 to 2027, according to a recent Inforum forecast. This rate is slower than the projected growth of the overall economy. The slowdown follows industry growth during the pandemic in 2020 (1.3%), 2021 (12.6%), and 2022 (10.1%).
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