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 wholesalers 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 Rack, and Tire Group International.
    • Large firms that distribute industrial and specialty tires include Gallagher Tire 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

                                    Mar 22, 2024 - Wages Up, Prices Fall
                                    • Employment and wages for the industry increased in late 2023, while producer prices fell, according to data from the Bureau of Labor Statistics (BLS). Employment for motor vehicle and parts wholesalers, including tire wholesalers, grew 2.8%, and wages were up almost 4% in December 2023 compared to the previous year. Producer prices fell by 2.4% in December 2023 compared to the previous year, but were up 33.4% from 2019, per the BLS. Inventories for the industry climbed in the first nine months of the year and were 13.7% higher in September 2023 than the previous year, according to the Census Bureau.
                                    • According to the annual Warehouse/DC Outlook survey in Modern Materials Handling, more organizations are adopting a “wait and see” approach toward spending plans due to the current economic uncertainty. In 2024, 46% of respondents are taking a “wait and see” approach, up from 34% in 2023. The survey was conducted among managers and personnel involved in purchasing decisions for material handling solutions companies. For those planning to invest, 67% are interested in materials handling equipment, 55% in automation and related technologies, and 50% in storage equipment. The report highlighted bright spots for the industry, including stronger interest in labor management systems (LMS), increased interest in goods-to-person robotics, attention to maintenance services, and the use of advanced analytics to draw value from existing systems.
                                    • Tire wholesalers will have to monitor minimum wage changes, as 22 states increased their minimum wages in January 2024, according to USA Today. About half of the increases are automatic adjustments linked to inflation. States that raised their minimum wages in January 2024 include Hawaii ($14), Maryland ($15), Nebraska ($12), and Washington ($16.28). Several states are set to boost their minimum wage levels later this year, including Florida (up to $13 in September) and Nevada (up to $12 in July). According to the Economic Policy Institute, nearly 40 US cities and counties will increase their minimum wage rates above state levels at the start of the new year. The federal minimum wage is $7.25 an hour, and more than 20 states, primarily located in the South and the Midwest, use the federal minimum as their wage floor.
                                    • 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.
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