Dealers rank No. 2 in the tire business, but they’re trying harder

Donna Harris covers automotive retailing for Automotive News.
Consumer Reports just came out with its first study of how and where consumers shop for tires. This is especially relevant to car dealers, since many of them sell tires to boost their customer-pay business.

The auto manufacturers also started launching tire programs for dealers a little over a decade ago to help build their maintenance and light-repair business. At the time, many quoted research showing that as many as 75 percent of consumers maintain and repair their vehicles where they bought their tires.

The good news from this new research is that new-car dealerships are the second-most popular place to buy tires, behind tire outlets. The bad news is that they are a very distant second. The study shows 51 percent of respondents who purchased new tires bought them at dedicated tire outlets, 11 percent purchased them at dealerships, 9 percent bought them at warehouse stores, and 8 percent bought them at department stores.

I wish Consumer Reports had historical figures on this, but I was told this study was the first of its kind. The response has been good, though, and the research may be repeated next year. If so, maybe dealers will narrow the tire outlets’ lead. I’ve observed some dealers are aggressively going after the tire business -- especially among the larger dealership groups.

Some dealers gripe that tires can be a low-margin, inventory-intensive business. But, hey, that sounds a lot like the new-car department. Maybe dealers who dive into the tire business will find that the incremental business from selling tires, the opportunity to sell other work and the chance to build customer loyalty will make it worth their while.