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 1,150 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 $30 million annually.

    • The tire merchant wholesaling industry consists of about 1,150 companies which employ about 43,000 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

                                    May 22, 2024 - Sales Up in Q1
                                    • According to a new Modern Tire Dealer survey, 43% of tire wholesalers reported their tire unit sales were up by an average of 14.3% in Q1 2024, and 52% of tire wholesalers reported dollar sales increased by an average of 9.3%. The State-of-the-Industry Survey showed that 28% of tire wholesalers said tire unit sales were flat during the first quarter of 2024, and 15% said dollar sales were flat during the same period. About 29% of tire wholesalers reported tire unit sales were down an average of 8.2% in Q1 2024, and 33% reported their dollar sales were down 5.7% on average. When asked about the difference between bottom-line profitability between Q1 2023 and Q1 2024, 48% of tire wholesalers said their profitability increased by an average of 16.4% during the period.
                                    • Travel on US roads climbed by 0.7% in March 2024 year over year to an estimated 275.5 billion vehicle miles, according to the US Department of Transportation’s Federal Highway Administration. Most regions of the US experienced a slight increase in vehicle miles in March 2024, except the South-Atlantic, which saw a decrease of 0.7% in total travel miles year over year. Meanwhile, the North-East region saw an increase of 1.3% in total estimated vehicle miles in March year over year, the North-Central saw an increase of 1.3%, the West saw an increase of 1.3%, and the South-Gulf was up 0.5%. For 2024 year to date, miles traveled increased by 0.6% over the same period in 2023.
                                    • 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.
                                    • 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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