Tire dealer profi le

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Sales and pricing

Want to compare your dealership to the other 30,000 independents? Here are some benchmarks

Single-store owners make up two-thirds of the 30,000 independent retail, wholesale and commercial tire dealer Chart 14 2010 BRANDS LISTED BY OUTLETS Survey respondents purchased tires from an average of fi ve wholesale distributors each. locations in the U.S. Th e vast majority of (Total outlets: 5,018) Th e average age of the vehicles serviced locations off er consumer tires; close to 60% of the locations sell truck tires. Rank by number of dealer s Dealers/ outlets by tire dealers is 10.2 years. According to the latest applicable research data from

Wholesale distributors represent 13% of R.L. Polk & Co. (which takes into account the 30,000 dealers. 1. Michelin 83/4,200 scrappage rates, including the 2009 “Cash

Retail tire dealers dominate the automo2. Goodyear 71/3,877 for Clunkers” program), the average age of tive aft ermarket. Th ey account for 60% of 3. BFGoodrich 70/3,733 passenger cars is 10.6 years. For light trucks retail consumer tire sales (see page 36), which totaled $15.6 billion in 2010. Deal4. Bridgestone 62/2,928 (Class 1-3), the average is 9.6 years. On average, automotive service accounts ers also perform more than $20 million a 5. Continental 55/3,293 for 47% of an independent tire dealer’s sales, year in automotive services. 6. Dunlop 52/3,301 based on MTD’s 2009 Automotive Service Tire dealers specifi cally infl uence the tire brand purchase 70% of the time. Customers 6. Firestone 44/1,862 Survey. Average earnings are 44%. Th e average number of service bays per ask for a brand and buy that brand 30% of 8. General 48/2,786 location is six; the average number of techthe time; however, the dealer still infl uences 9. Uniroyal 47/2,811 nicians is fi ve. the type of tire purchased in half of those 10. Yokohama 46/3,130 Th e most popular service among indecases. When it’s all said and done, tire dealers directly infl uence the purchase of the tire 11. Cooper 40/1,823 pendent dealers is mounting and balancing (91%), followed by brake service (82%). by consumers 85% of the time. 12. Kelly 36/1,399 Tire pressure monitoring service and oil/

Th at, in a nutshell, is what the overall 13. Toyo 35/1,547 lube service work are performed by 80% independent tire dealer distribution channel looks like. Here’s a profi le of the average 14. Pirelli 34/3,007 of the dealers. Oil and lube service remains one of the tire dealer. 15. Hankook 32/3,023 most competitive automotive services in

Independent retailers average between 16. Falken 20/1,531 the aft ermarket. Whether it is promoted by $1.9 million and $2 million per outlet. A 17. Kumho 18/1,407 time saved (“quick lube”), cost (the most typical tire dealer handles 11.4 diff erent brands, which is in line with what dealers 18. Dayton 17/367 advertised retail price for an oil change is $19.99) or value (it oft en includes a “free” on the Modern Tire Dealer 100 list off er. (For a look at brand popularity among the Source: The Modern Tire Dealer 100, 2010 tire rotation and safety inspection), an oil change is used to bring people into a repair MTD 100, see Chart 14.) shop.

Th e average tire dealer has owned his or her company for 22 Th e advertised cost of a standard oil (synthetic blend), lube years, according to the latest MTD dealer profi le survey. Th irtyand fi lter remained steady over the course of the year (see Chart seven percent of the dealers have children in the business; of 15). Th e average advertised cost for an oil change was $20.16, those who do, 81% say they plan to keep the business in the compared to $19.83 in 2009 and $18.99 in 2008. family. Th irty-fi ve percent have spouses working with them. Th e average annual sales from oil and lube service per dealer

Among retailers, half of the dealers say they get some of their is $55,621. Th e average annual profi t is $17,799 (32%). product directly from tire manufacturers. Of those who say they Th e geographic breakdown of independent tire dealers in the do, the average is 3.8 manufacturers per dealer. U.S. favors the eastern and midwestern states: South Atlantic, 20.9%; East North Central, 14.9%; West South Central, 13.6%; Chart 15 Pacifi c, 13.0%; West North Central, 10.1%; Middle Atlantic,

AVERAGE ADVERTISED OIL CHANGE PRICING 8.6%; East South Central, 8.2%; Mountain, 7.3%; and New 1Q ‘10 2Q ‘10 3Q ‘10 4Q ‘10 F ull year England, 3.4%. Th e state with the most independent dealers is California. Texas has the second highest number of dealers, followed by Florida, $19.61 $19.74 $19.75 $20.97 $20.16 Ohio, Georgia, North Carolina and Pennsylvania. ■