CLEVELAND — Scott and Dean Mueller built Dealer Tire into a billion-dollar colossus by selling replacement tires to new-vehicle dealerships. Now the brothers are ramping up their efforts to teach dealers to be better tire retailers.
The stakes are high: Franchised new-vehicle dealers, the Muellers predict, can triple their share of the U.S. replacement tire market by 2032. To boost that share from today's 8.5 percent to 25 percent, they say, dealerships must do two things above all:
1. Treat tire sales as a business in itself, not merely a loss leader to keep service customers from defecting to aftermarket competitors.
2. Improve their service advisers' tire-selling skills.
"If dealers are going to dominate their market in service, maintenance and light repairs, tires have to be part of the equation," says Dean Mueller, 58, Dealer Tire's founder and president.
Adds Scott Mueller, 54, the CEO of the privately owned company: "You can [install] a set of tires in under an hour, and if you are doing them right, you can also sell an alignment. The profit is right up there with gravy warranty work."
Dean and Scott Mueller granted Fixed Ops Journal a rare joint interview at Dealer Tire's headquarters in a newly renovated historic building in midtown Cleveland. The Mueller family's roots in tire sales go back nearly a century.
The brothers formed Dealer Tire in 1999, and since 2002 — when they sold the family's retail tire business — have worked exclusively with dealership service departments.
Dealer Tire supplies tires for 24 automakers to 10,000 U.S. new-vehicle dealerships. It does not sell tires through a consumer channel, or to independent shops.
The company has several major initiatives designed to help dealerships improve their tire-selling retail skills, including a new program that embeds Dealer Tire sales consultants with dealerships.
The Mueller brothers keep these strategies close to the vest, to avoid alerting their competitors. General Motors and Ford Motor Co. operate their own tire distribution programs for their dealers. Companies such as Community Tire, Tire Rack and local tire chains also supply dealerships.