Our annual January Facts Issue is well named, and the 2014 version may be our best ever. Look at what it has to offer: six stories and 27 charts (four more than last year!) covering everything from consumer and commercial tire shipments to tire sizing.
The 13-page section focuses on the replacement and original equipment markets in the United States. However, the U.S. is not an island. Canada and Mexico have a significant affect on our domestic market. So do China and, to a lesser extent, other countries overseas.
Whatever affects the tire industry in the U.S. we cover in the Facts Section. And we put those numbers in historical perspective, which shows important trends. That is why we consider it the bible of the tire industry.
For 48 years, we have been dissecting the industry every January. How does this help you run your businesses more profitably? Glad you asked!
First, it highlights trends in the industry without you having to look at past issues. Need help with inventory? Check out the most popular OE tire sizes over the last three years. Wonder if you will be able to get product from China? Read about imports. Think car dealerships won’t be able to compete against you in the long-term? Think again.
Second — and this may be even more important than the trending — the Facts Section in its entirety creates a profile of the average independent tire dealer. This gives you a benchmark against which you can compare the results of your business. Peer review is always a good barometer of how you are performing.
For example, if you want to find out the average number of tires sold by a domestic, independently owned retail tire store, here are the steps.
1. Multiply the number of retail consumer tire shipments (229.9 million) by the market share owned by independent tire dealers (60.5%). You get 139.1 million tires.
2. Divide 139.1 million by the number of independent tire dealers (30,000). You get 4,636 tires per outlet.
3. Divide 4,636 tires by the average number of days an independent tire dealer is open (52 weeks x 6 days = 312 days). You get about 15 tires a day per store. If you believe the average shop is open an average of 5-1/2 days a week, divide 4,636 by 286 days, and you get about 16 tires a day per store.
Remember, it’s just an average. Reinalt-Thomas Corp., which does business as Discount Tire and America’s Tire in 28 states, sells close to 80 tires a day at each of its 882 stores. Hennelly Tire & Auto Inc., dba The Tire Choice & Total Car Care in Florida, averages 17 at each of its 35 stores.
Mountain View Tire & Service Inc., a 31-store chain based in Rancho Cucamonga, Calif., averages 12 per store. The numbers differ based on geography, demographics, economic climate and philosophy.
Third, the Facts Section allows you to profile your competition. Mass merchandisers , led by Wal-Mart Stores Inc., own 14% of the market. Warehouse clubs account for 8.5%.
Tire company-owned stores make up the fourth largest distribution channel with 7.5% of the market. However, they more directly compete with independent tire dealers because they also are set up to sell only tires and automotive service. They don’t need to retail light vehicles, do-it-yourself parts, toilet paper in bulk or, in the case of mass merchandisers, pretty much everything.
Auto dealerships also own 7.5% of the market. As a group, they go to market differently than you do because they have a different focus. Ford Motor Co. found a way around that by creating Quick Lane Tire & Auto Centers. With more than 600 locations nationwide, Quick Lane is a tire dealership within a car dealership.
If you read the entire section, you will find that the average independent tire dealer sells more than 4,600 passenger and light truck tires a year worth $603,000. The majority of dealers, 68%, are single-store owners.
The top tire dealers in the country, those with at least 11 stores, make up 18.6% of the market. There are 102 of them. The remaining dealers, 13.4%, have between two and 10 stores each.
I could go on, but I don’t have to. Check out our January issue for more, either in the printed version or online at www.moderntiredealer.com. ■
If you have any questions or comments, please email me at [email protected].
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