Tire Wholesalers

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 1,200 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 35-36 workers, and generates about $29 million annually.

    • The tire merchant wholesaling industry consists of about 1,200 companies which employ about 42,600 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

                                    Coronavirus Update

                                    Apr 22, 2022 - Tire Shortage Inflates Prices
                                    • A tire shortage in the US is putting pressure on tire dealers and inflating prices for consumers, with wholesalers caught in the middle. Supply chain issues, shipping delays, and a workforce shortage in the industry are depressing tire supplies. Freight costs for shipping tires also have risen dramatically, another pain point for wholesalers: The overall cost for a container of 1,000 tires has nearly doubled, from $46,000 to almost $80,000, according to Hamad Tire and Auto Service in Akron. Tire price sticker shock along with rising gas prices may cause motorists to drive less and put off replacing their tires.
                                    • The global market for winter tires – tires designed for use in colder weather, snow, and ice – is expected to reach $13.71 billion by 2026, up from $12.17 billion in 2020, a CAGR of 2%, according to market research firm 360 Research Reports. Increased use of winter tires in passenger cars, light trucks, and SUVs is driving market growth. Major markets include the Americas, Europe and Asia Pacific.
                                    • Tire wholesalers 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.
                                    • Tire wholesalers may face higher costs for and increasing shortages of imported tires due to supply chain issues created by response to the coronavirus pandemic and made worse by the Russian invasion. Intermodal congestion is stretching from Asian ports, across the Pacific to US ports, and on to railroads and their inland terminals. About half of imported tires (in terms of value) come from Asian countries including China, Japan, South Korea, Indonesia, India, and Taiwan.
                                    • Vehicle miles traveled (VMT), an indicator of tire wear, increased 10.6% year over year in February 2022, according to the Federal Highway Administration. VMT has recovered from the decline posted in 2020.
                                    • The agricultural tire market experienced high demand in both original equipment (OE) and replacement sales in 2021, and more of the same is expected for 2022, according to tire makers. "Most of this was driven by low input costs and high commodity prices that resulted in higher-than-normal net farm income, etc. In fact, the demand for OE exceeded supply and, therefore, drove replacement demand even higher," said David Graden, marketing manager for agriculture at Michelin North America.
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