Original Content found on Modern Tire Dealer
For over a decade, the car dealer channel has been on the rise. Once barely an “also ran,” the channel has steadily increased retail market share in the U.S. from 1% in 1998 to a respectable 7% in 2012. That puts car dealers within closing distance of company-owned stores which stayed at 7.5% share in 2012 and within shouting distance of warehouse clubs that posted 8.5% (from Modern Tire Dealer’s Facts issues).
For those who can remember the lay of the land before the new millennium, this steady climb would have seemed unlikely if not impossible. Car dealerships generally had one response to tire inquiries back then — a finger pointed toward the tire dealer down the street.
Now that car dealer is turning into the bully on the block. And while car dealers may have been pick-pocketing market share under the noses of unsuspecting tire channels for a few years, they have accumulated enough now that it’s time to take notice.
Still, a dose of perspective is in order. The independent tire dealer channel has made up approximately 60% of the retail tire market since 1998, according to MTD research. It’s obvious that the traditional tire store concept continues to work well, but that doesn’t mean that there is nothing to be learned from other ways of going to market.
Let’s look at the things that drive car dealer tire business and determine how each can drive success at your locations.
The average car dealer service department writes 14,140 repair orders per year (NADA Data 2012). That is a lot of opportunity to sell tires and service. Warranty service is responsible for many of the customers who populate those service lanes.
And while a tire dealer doesn’t have the advantage of warranty service intervals for new customers or vehicles, they certainly can take advantage of current tire customers. Building loyal customers builds future traffic. So it is important to keep your customers coming back.
Offering free rotations or inspections to new customers can turn non-customers into future customers. Tire safety seminars for teen drivers, or for the general community near your store(s), can build awareness, customers and loyalty.
The car dealer is also blessed with the reputation for expertise. “No one knows your vehicle better,” the advertisements ring out to the receptive ears of your would-be customers.
While there is truth in the argument that the car dealer is the expert for the vehicles they sell and service, there is also opportunity for the tire dealer. Expertise is gained through education and repetition. Your family doctor is probably highly educated and very familiar with your personal health, but will still recommend you to an ophthalmologist when needed.