Tire Dealers
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Industry Structure, How Firms Opertate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Quarterly Insight, 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
Coronavirus Update
Apr 22, 2022 - Dealers Face Significant Labor Shortage
- Tire dealers are facing a persistent shortage of labor, with not enough technicians to meet customer demand, reports Modern Tire Dealer (MTD). The consensus among tire dealers surveyed by MTD is that a shortage of technicians is their biggest pain point. Finding and keeping technicians is a challenge and an impediment to growth, with some operators having to close locations on weekends or operate with reduced hours due to a lack of available labor. Tire dealers hoping to do more business in 2022 should have a plan to staff up and retain their talent.
- Discount Tire has invested in a developer of smart sensors designed to monitor vehicle tires in real-time as part of the company’s strategy to cater to fleet customers. Using proprietary sensors embedded inside tires, the platform developed by Revvo Technologies provides visibility and predictive analytics on a vehicle’s tire life and alerts in real-time any tire damage. Discount Tire’s VP of Fleets and Partnerships says the company has received very positive feedback from its fleet customers currently using Revvo, helping them reduce down time while enhancing vehicle and driver safety.
- Tire dealers are closely watching how the attack by Russia on Ukraine is affecting the production and distribution of tires coming out of the region. US and foreign manufacturers with operations in Russia or Ukraine are reacting to the conflict, regarding worker safety, output, and the resulting trade sanctions and bans on products made in Russia. Continental has suspended production at its facility in Russia. Michelin has halted some manufacturing in Europe due to issues with supplying its production facilities and getting finished products to customers.
- Vehicle miles traveled (VMT), an indicator of tire demand, increased 10.6% year over year in February 2022, according to the Federal Highway Administration. VMT has recovered from the decline posted in 2020.
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