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TPMS Hyundai Elantra – 2023

Randy O’Connor By

Rewind to the first quarter of 2022. There was an abundance of factors affecting the retail market. And the buzz was that we were most certainly in for a tough time as the price of most everything we could want or need was now at an eye-popping and almost excruciating level.

On top of that, new car sales were plummeting due to the chip shortage. Used car sales were on the fast track to hitting top pricing. The price of gas was a super-hot topic, too.

Then things started to change, Miles driven, both consumer and commercial, were on the rise. Consumers were spending more and opening more credit accounts, while allowing their balances to increase — in some cases, by 10% to 13%.

Meanwhile, the big wild card, international tension, had yet to fully play out yet. (Sadly, it still hasn’t played out and we should all keep our fingers crossed.)

So looking back on 2022 — and everything that could have, should have, and actually did transpire — how did we, the tire dealer community, do? Let’s look at some numbers.

The results I’m going to share with you come directly from an exclusive group of 56 tire dealership owners, representing more than 300 locations from across the United States. All sell tires and provide auto service and have anywhere from one store to 66 locations.

Most are longtime members of the Dealerto-Dealer Development Group. Some have been with the group for as many as 12 years. How did they perform?

Let’s start at the top by examining mix of business.

Generally, the healthier your mix of parts and service labor sales to tire sales, the healthier your gross profit line.

Why? No two dollars are created equal on the gross line.

One tire dollar at 24% isn’t quite as valuable as a part dollar at 52% and a service labor dollar at 100%. (The more service labor and parts dollars you have for every tire dollar, the healthier your gross dollars and percentages are.)

In 2022, we saw parts and service gain significant ground. Tires, as a percent of total sales, took a 2.5% dip. Parts picked up 0.5%, while service labor grabbed an impressive 2% more versus 2021.

From a mix perspective, this is a healthy indicator that owners had a greater share of each dollar at their disposal to distribute to either payroll, non-payroll operating expenses or the net line. This also is an indication that a greater share of attention went