Tire Wholesalers

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 1,100 tire merchant wholesaling firms in the US primarily sell new and used tires and tubes for passenger and commercial vehicles. Firms may also sell complementary products such as wheels and other automotive parts. Customers include independent tire dealers, auto repair shops, auto parts stores, big box retailers and wholesale clubs, hardware stores and other distributors. Tire wholesalers also supply replacement tires to dealers of motorcycles and ATVs, as well as agricultural, construction, and industrial vehicles. This profile excludes tire manufacturers’ sales branches.

Complex Inventory Management

The number of unique sizes and tiers of quality and price are expanding as manufacturers look to meet market demand.

Direct Sales by Tire Manufacturers

Tire manufacturers are opening distribution centers in efforts to supply automobile dealerships, auto parts stores, and other large customers of tire wholesalers.

Industry size & Structure

A typical tire merchant wholesaler operates out of 1-2 locations, employs fewer than 20 workers, and generates about $32 million annually.

    • The tire merchant wholesaling industry consists of about 1,100 companies which employ about 44,300 workers and generate about $35 billion annually.
    • Customer industries include auto repair shops, auto parts stores, big box stores and wholesale clubs, hardware stores, and dealers of agricultural, construction and commercial equipment dealers.
    • The industry is concentrated with the top 50 firms accounting for 80% of industry revenue.
    • Large companies that distribute passenger vehicle tires include American Tire Distributors (ATD), Tire Wholesalers Plus, Tire Rack, and Tire Group International.
    • Large firms that distribute industrial and specialty tires include Gallagher Tire, Commercial Tire Sales, and Monster Tires. The industry is predominately comprised of privately-owned companies.
                                    Industry Forecast
                                    Tire Wholesalers Industry Growth
                                    Source: Vertical IQ and Inforum

                                    Recent Developments

                                    May 23, 2023 - Average Vehicle Age Rises to New Record
                                    • The latest analysis from S&P Global Mobility found the average age of cars and light trucks in operation on US roads has reached a new record in 2023 of 12.5 years, up by more than three months over 2022, according to Auto Remarketing. There are more than 284 million vehicles currently in operation in the US. Constrained new vehicle sales have put pressure on the average vehicle age. 2023 marks the sixth straight year of increase in the average vehicle age of the US fleet. S&P Global Mobility noted that the increased pace of growth for the average light vehicle age benefits the vehicle service industry. “An older fleet means vehicles will continue to need repair work and service to perform correctly,” analysts said. “The aftermarket sector trajectory typically follows growth in average vehicle age, as consumers invest more to keep their aging vehicles running, barring some exceptions.”
                                    • Wards Intelligence data shows that car dealerships sold nearly five times as many electric vehicles (EVs) in 2022 as they had in 2020, according to the National Automobile Dealers Association. The EV sales for 2023 to date are also looking strong. Sales in the first three months of 2023 grew by 60% compared to the same time last year. Demand for EVs increased by 350% from 2020 to 2022, according to a recent analysis by Consumer Reports. Demand is expected to continue to rise as the cost of EVs falls, options increase, charging infrastructure improves, and more consumers have direct experiences with EVs.
                                    • According to Tire Review, the commercial van tire segment is proving to be a growth area driven in recent years by increased e-commerce sales during the pandemic. Consumer expectations of fast delivery times for online purchases continue to drive the segment along with expanded regional and local fleets with more demanding delivery routes. Load-carrying capacity and how the customer uses the van are factors when selecting van tires to maintain the safety and performance of the vehicle. Tire manufacturers are expecting continued growth from this segment. According to Doug Martin, product manager for specialty tires at Continental Tire, “The rise in e-commerce over the past few years has really pushed the usage and importance of commercial van tires. Coupled with the continued use from contractors, construction companies and other smaller fleets, the segment has grown in size and importance.”
                                    • US new car sales are expected to grow by 6% in the first quarter of 2023 year over year, as rising inventory levels are helping to meet pent-up demand, according to the Wall Street Journal. Manufacturers showing rising sales in the first quarter include GM (17.6% increase), Nissan Motor (17%), Hyundai (16%), and Honda Motor (6.8%). Inventory levels are finally recovering after supply chain issues put a dent in sales in 2022 when the auto industry experienced its worst annual performance in more than a decade. According to auto executives, supply problems have been easing, particularly on semiconductors, as factory production schedules become more stabilized. Wards Intelligence found that the available stock at dealerships and in transit was 1.85 million units at the end of March, up about 50% from the same period a year ago but still below the historical norm.
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