Tire Dealers Industry Profile

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 rise 3.9% through 2023 to 2028, reaching a value of about $320 billion, according to MarkNtel Advisors. Demand is expected to be strongest in the Asia/Pacific region, where per capita vehicle ownership is increasing. China is the world's largest consumer and producer of tires, followed by the North American and Western European markets, where premium and high-performance tires help drive demand.

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 20 largest companies generate about 50% of revenue.

Growth of the independent ...