Tire Dealers Industry Overview

Excerpt from Tire Dealers Report

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, Les Schwab Tire Centers, TBC Corporation, and retail units of manufacturers Bridgestone and Goodyear.

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 industry is concentrated: the 50 largest companies generate about 50 percent of revenue.

Products, Operations & Technology

Dealers sell replacement tires for passenger cars (about 50 percent of industry revenue) and commercial vehicles (20 percent). Other sources of revenue include service and parts sales. The industry includes tire-specific stores, automotive parts stores, tire departments of mass retailers, and a variety of automobile service centers. The majority of dealerships are independently owned, though many are franchises or owned by tire manufacturers.