A remarkable thing happened during the first quarter of 2024: no tire manufacturer publicly announced a price increase — at least to my knowledge.
After living through several years of rapid-fire hikes, MTD readers are reporting that consumer tire pricing has stabilized — one of a few trends bringing much-needed relief to their businesses.
John Wood, sales manager at Warren Tire Service Center Inc.’s location in Queensbury, N.Y., recently told me that tire prices have reached a reasonable equilibrium.
“I wouldn’t say I’ve seen prices drop, but I’ve seen them hold pretty steady,” he said. “For a while, they were jumping up every month. It was getting out of control.
“I’ve heard talks of some (tiremakers) doing small increases again, but not the way it was a couple of years ago.”
Price stabilization has benefited Warren Tire Service Center at the retail counter, he noted.
Improved tire supply has helped the 16-store dealership, too. Product availability “doesn’t seem to be an issue anymore.”
Another trend playing into Warren Tire Service Center’s hands is the fact that people are keeping their cars longer.
Auto service “has been extremely good for us,” said Wood. “Interest rates are so high, (people) can’t afford to buy cars, so they’re fixing what they have.”
Rich Rogenski, co-owner of Westside Tire & Service, a three-store dealership based in Youngstown, Ohio, told me that tire pricing “has remained pretty stable within the last eight to 10 months.”
This has helped his dealership, which is enjoying a very profitable year.
“Customers appreciate stability,” he said. And more customers are bringing cars to his dealership for service work.
“We’re seeing (customers) keep their vehicles longer, running at higher mileages. We’re seeing cars with as many as 300,000 miles on them,” which has resulted in a nice uptick in maintenance work for Rogenski’s business.
“Fluid exchanges — transmission, antifreeze, power steering — all of those components need to be serviced. It’s much easier to explain to the customer how those services will (positively) affect their investment” when keeping cars running for as long as possible is the goal.
“Over the last 12 months, we’ve seen a dramatically different landscape” when it comes to tire pricing “compared to the timeframe after COVID-19, when (increases) were one after the other,” Brett Matschke, owner of Muskego, Wis.-based Richlonn’s Tire & Service Centers, recently told me.
One of his dealerships’ tire suppliers even implemented “a slight (price) readjustment” near the end of 2023.
Matschke said that when tire prices began to climb a few years ago, some of his retail customers were taken aback.
“They had bought tires three years before and were (now) coming in for replacement.”
In some cases, they saw “a 30% price change and it was like, ‘Holy cow!’”
This didn’t necessarily surprise Matschke, who noted that prices on other consumer goods “were going up, too. Tires were just in line with that.”
Like its tire sales, Richlonn’s Tire & Service Centers’ auto repair business is on the upswing, according to Matschke.
“It was already trending upward before COVID-19 kicked in,” he explained.
Then the knock-on effect of the pandemic “caused the cost of cars to go off the charts, which convinced a lot of people to keep what they had. That’s definitely been a positive thing for our business.”
Will pricing remain stable throughout 2024? Matschke is optimistic that it will.
“Unless something weird happens globally to cause a problem with those resources (that) tire manufacturers are using, I don’t think there will be a drastic change,” he said.
Westside Tire & Service’s Rogenski says he has some concerns about how the war in the Middle East, which is causing shipping issues, will shake out.
“If the war escalates, what will happen to the price of oil? I could be 100% wrong and I sure hope I am, but I think costs are going to escalate and naturally, the price of tires will go up with it.”
That could very well happen. But for now, things seem to be heading in the right direction for tire dealers.
What are you experiencing at your business? We’d love to hear from you.
If you have any questions or comments, please email me at [email protected].
