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 1,200 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

                                    Recent Developments

                                    Nov 28, 2022 - Tires for All Seasons
                                    • Motorists seeking to avoid the expense and inconvenience of switching to winter tires but who still 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, 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.
                                    • Bridgestone in November 2022 was awarded a $35 million climate-smart grant by the US Department of Agriculture to invest in the desert shrub guayule to expand natural rubber production in the US and provide growers in the Southwest with a more environmentally sustainable crop amid an ongoing water crisis. The investment in guayule production will allow the tiremaker to expand natural rubber production with lowered greenhouse gas emissions and to create jobs in the region for local farmers and Native American tribes to build a rubber bioeconomy based on climate-smart and sustainable practices, Rubber World reports. Bridgestone in 2015 produced the first tire made from guayule-derived natural rubber. More recently, the company announced it is expanding the number of local farmers it partners with in Central Arizona and is targeting 350 new acres of guayule to be planted in 2023.
                                    • Tires prices continued to climb in 2022, following more than 40 price increases by manufacturers last year, Modern Tire Dealer (MTD) reported in October 2022. Data collected by Fitment Group, a Minnesota-based company that tracks consumer pricing trends for passenger and light truck tire prices, showed that over the first seven months of 2022, the price of premium tires increased the most, up 9.3%, followed by opening price point (aka tier-four) tires, up 8.5%, and, lastly, mid-tier tires, which increased by 6.5% over the same period. By comparison, the consumer price index for all items in July increased 8.5%. Tire price hikes “are following along the lines of the other inflationary numbers we’re seeing,” said Fitment Group’s retail tire pricing expert JP Brooks, adding “They’re following a consistent trend line.”
                                    • The accelerating electrification of the automobile industry is driving double-digit growth in the market for electric vehicle (EV) tires. The global market for EV tires is expected to surpass $161.6 billion by 2030, up from $40 billion in 2021, a compound annual growth rate of 16.78% from 2022 to 2030, according to a forecast from Precedence Research. The landmark climate, health and tax bill signed into law by President Biden in August 2022 includes $14.2 billion for tax credits for new and used EV purchases intended to speed the shift from gas-powered to electric cars. Tire makers are responding by offering tires specifically engineered to enhance the performance of EVs and support the growth of the market.
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