Tire Dealers
Description
Companies in this industry operate physical retail establishments that sell new and used tires; some also provide automotive repair services. Major companies include Discount Tire, TBC Corporation, Monro Muffler Brake, Les Schwab Tire Centers and retail units of manufacturers Bridgestone and Goodyear (all based in the US), as well as Beaurepaires (Australia) and Kwik-Fit (UK).
Global demand for tires is projected to reach a compound annual growth rate (CAGR) of about 8% from 2024 to 2030, with a value of about $450 billion, according to TechSci Research. Demand is expected to be strongest in the Asia/Pacific, where per capita vehicle ownership is increasing. China is the world's largest consumer and producer of tires.
The US tire dealer industry includes about 20,000 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $33 billion.
COMPETITIVE LANDSCAPE
Demand for replacement tires is tied to vehicle use, which in turn depends on economic activity. The profitability of individual companies depends on marketing, since the product is largely a commodity. Large companies benefit from economies of scale in purchasing and advertising. Small firms can compete effectively by serving a particular region, by specializing (such as in tires for high-end cars) or by joining purchasing/distribution networks. The US industry is concentrated: the 50 largest companies generate about 50% of revenue.
Growth of the independent dealer channel has come at the expense of mass merchandise chains and stores owned by tire manufacturers. Both Amazon and growing direct-to-consumer sales by tire manufacturers threaten to take market share from independent tire dealers. Leading companies such as Bridgestone is also noticing the shift of customer demand on tires increasing through online platforms.
The Asia-Pacific region, particularly in China, led the strong growth for global tires, according to TechSci Research. The market is expected to reach about $450 billion by 2030. With a volume of 92.4 million tires, the sector is expecting a robust growth on the forecasted period. Due to the tariffs imposed by the US on tire imports from China, imports to the US decreased. Thailand is considered the largest importer to the US with about 32 million unit of tires in 2022, according to Statista.
PRODUCTS, OPERATIONS & TECHNOLOGY
Major products offered by tire dealers include new automotive and light passenger tires at about 45% of the industry's revenue, followed by automobile parts, new and rebuilt, as well as new medium and heavy-duty trucks and buses, both accounting for about 15%
Most tires are made predominantly from natural or synthetic rubber, and may also include steel, rubber-like elastomer polymers, carbon black and other compounds, and processing oils and waxes. An average sized steel-belted radial tire for passenger cars weighs approximately 20 pounds, 16 pounds of which is rubber. A semi-truck tire weighs about 110 pounds, 47 pounds of which is rubber. Increases in the cost of rubber triggers price increases throughout the tire supply chain, from manufacturers to wholesalers to retailers.
Dealers carry inventory, which most buy from wholesalers and distributors. The largest retailers, such as national chains, buy directly under contract from tire manufacturers. Large dealers have the resources to customize inventory for specific stores based on market research that identifies the quantity and types of cars registered in the respective regions. Tire dealers may sell national or private label brands, although some specialize in one or the other; private label tires often are cheaper. The average tire dealer in the US carries at least 13 brands, averages seven service bays and five technicians per store, and derives 46% or sales from automotive service. Consumers tend to be both loyal to brands and sensitive to prices.
Global demand for tires is projected to reach a compound annual growth rate (CAGR) of about 8% from 2024 to 2030, with a value of about $450 billion, according to TechSci Research. Demand is expected to be strongest in the Asia/Pacific, where per capita vehicle ownership is increasing. China is the world's largest consumer and producer of tires.
The US tire dealer industry includes about 20,000 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $33 billion.
COMPETITIVE LANDSCAPE
Demand for replacement tires is tied to vehicle use, which in turn depends on economic activity. The profitability of individual companies depends on marketing, since the product is largely a commodity. Large companies benefit from economies of scale in purchasing and advertising. Small firms can compete effectively by serving a particular region, by specializing (such as in tires for high-end cars) or by joining purchasing/distribution networks. The US industry is concentrated: the 50 largest companies generate about 50% of revenue.
Growth of the independent dealer channel has come at the expense of mass merchandise chains and stores owned by tire manufacturers. Both Amazon and growing direct-to-consumer sales by tire manufacturers threaten to take market share from independent tire dealers. Leading companies such as Bridgestone is also noticing the shift of customer demand on tires increasing through online platforms.
The Asia-Pacific region, particularly in China, led the strong growth for global tires, according to TechSci Research. The market is expected to reach about $450 billion by 2030. With a volume of 92.4 million tires, the sector is expecting a robust growth on the forecasted period. Due to the tariffs imposed by the US on tire imports from China, imports to the US decreased. Thailand is considered the largest importer to the US with about 32 million unit of tires in 2022, according to Statista.
PRODUCTS, OPERATIONS & TECHNOLOGY
Major products offered by tire dealers include new automotive and light passenger tires at about 45% of the industry's revenue, followed by automobile parts, new and rebuilt, as well as new medium and heavy-duty trucks and buses, both accounting for about 15%
Most tires are made predominantly from natural or synthetic rubber, and may also include steel, rubber-like elastomer polymers, carbon black and other compounds, and processing oils and waxes. An average sized steel-belted radial tire for passenger cars weighs approximately 20 pounds, 16 pounds of which is rubber. A semi-truck tire weighs about 110 pounds, 47 pounds of which is rubber. Increases in the cost of rubber triggers price increases throughout the tire supply chain, from manufacturers to wholesalers to retailers.
Dealers carry inventory, which most buy from wholesalers and distributors. The largest retailers, such as national chains, buy directly under contract from tire manufacturers. Large dealers have the resources to customize inventory for specific stores based on market research that identifies the quantity and types of cars registered in the respective regions. Tire dealers may sell national or private label brands, although some specialize in one or the other; private label tires often are cheaper. The average tire dealer in the US carries at least 13 brands, averages seven service bays and five technicians per store, and derives 46% or sales from automotive service. Consumers tend to be both loyal to brands and sensitive to prices.
Table of Contents
- Industry Overview
- Quarterly Industry Update
- Business Challenges
- Business Trends
- Industry Opportunities
- Call Preparation Questions
- Financial Information
- Industry Forecast
- Web Links and Acronyms
Pricing
Currency Rates
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