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

                              Nov 28, 2022 - Tires for All Seasons
                              • Motorists seeking to avoid the expense and inconvenience of switching to winter tires but who prioritize safety and performance are driving demand for all-season tires. “All-season tires continue to dominate the replacement market and more new vehicles are coming with higher performance all-season tires as OE (original equipment),” said Yokohama Tires’ Drew Dayton, adding that in the next five years, all-season and newer all-weather categories are expected to maintain their overall market share, with some all-weather tires replacing all-season. All-weather tires, developed in Europe to meet high winter safety standards there, are flexible and durable enough to be used year round. As all-season and all-weather tires gain in popularity, it’s important for dealers to understand the nuanced differences between them, as well as what’s most important to customers in this segment, according to Tire Review.
                              • Electric vehicles are expected to make up about 30% of new car sales in the United States by 2030, with EVs making up nearly 10% of the of cars and light trucks expected on US roads in 2030, according to the 2022 Joint EV Trends and Outlook Forecast commissioned by the Automotive Aftermarket Suppliers Association (AASA) and the Auto Care Association. Notably, the forecast shows that the battery electric vehicles (BEVs) share of vehicles in operation is growing faster than expected and the purchase price of BEVs is expected to reach parity with vehicles powered by internal combustion engines as soon as 2024. Tire makers are responding by offering tires that are specifically engineered to enhance the performance of EVs and support the growth of the market.
                              • The US Tire Manufacturers Association (USTMA) is projecting another record year for tire shipments, with shipments rising 2.1% over 2021. In 2022, USTMA is projecting total US tire shipments of 342.1 million units, compared to 335.2 million units in 2021, and 332.7 million units in 2019. Compared with 2021, original equipment (OE) shipments for passenger, light truck and truck tires this year are expected to increase respectively by 4.8%, 4.8%, and 7.8%, with a total increase of 2.5 million units. Replacement passenger, light truck and truck tire shipments are also projected to increase by 0.9%, 2.3%, and 6.5% respectively, with a total increase of 4.4 million units, USTMA reports.
                              • Tire dealers that handle tire replacement for commercial fleets can help these customers reduce operating costs by equipping their trucks with fuel-efficient truck, bus and radial tires – known as TBR tires in industry parlance. “Equipping a vehicle with a tire optimized for lower rolling resistance can reduce total fuel consumption by 3% to 3.6%,” Rob Williams, Hankook Tire America senior vice president of TBR sales, told Tire Review in August 2022. With research from the National Highway Traffic Safety Administration showing that fuel costs can be as much as 60% of a fleet’s operating budget, even single-digit reductions in fuel consumption can add up to big savings for commercial fleet operators struggling with rising diesel, labor, and other costs of doing business.
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