Magazine for the professional tire industry
Issue link: https://mtd.epubxp.com/i/244093
Facts section: Tire dealer profle includes tire rotation, a multi-point vehicle check and up to fve quarts of synthetic blend oil, the same "routine" oil change that is regularly used as a loss leader. For the year, based on newspaper, direct mail and Web advertising, the price of a synthetic blend oil change was $21.63, about the same as last year (see Chart 26). Tat takes into account car dealerships, mufer, shops, auto repair shops, tire dealers, mass merchandisers and company-owned stores. However, that total isn't an apples-to-apples comparison to Ford's price. Te average advertised oil change price with a multi-point inspection and tire rotation was $22.24. Te average price without them (meaning they were not listed in the advertisement) was $20.60. Again, those are advertised prices. MTD's most recent Tire Dealer Automotive Service Survey paints a diferent picture. Te average price per what the survey refers to as "oil and lubrication service work" was $37.51, much closer to Ford's advertised price (see Chart 25). Te proft margin per job is 34%. Advertised tire pricing Passenger tire pricing was down 5% last year compared to the year before. Te drop in advertised pricing was even greater. Pricing on two of the sizes in Chart 27 also were tracked last year. Te advertised price on a P185/65R14 was down 28.1% compared to $88.32 in 2012. Te comparative price on a P195/60R15 was down 26.4% from $102.07. In his analysis of consumer tire pricing over the course of 2013 and beyond, Nick Mitchell, senior vice president for Northcoast Research Partners LLC, was not surprised by the decrease in pricing. "Generally speaking, retail tire prices trended as one would have expected at the start of the year. Specifcally, prices declined gradually throughout the year refecting the expiration of Tarif 421 at the end of 2012 and the impact of lower raw materials prices moving through the supply chain. Chart 25 AVERAGE AUTOMOTIVE SERVICE JOBS PER MONTH Service No. of jobs "Te average retail price for a light passenger tire dropped a litle more than 4%... with prices sliding more in the value category relative to the pressure seen among Tier One brands. "I think retail tire prices will be down 2% to up 2% in 2014," he says. "Te key drivers will be the trend in raw material prices and the strength of demand at retail, as I think the impact from the increased supply from China is largely behind us." Even before sales picked up in the fnal quarter of 2013, more than 40% of the retail tire dealers and wholesale tire distributors predicted they would fnish the year with doubledigit increases in both unit and dollar sales. When asked in October how the year would end for them, 42.7% of the retail dealers and 43.7% of the wholesale dealers responding to MTD's Exclusive State-of-the-Industry Survey believed their tire unit sales would be up by an average of 12%. Another 16% of the retailers and 18.8% of the wholesalers predicted their unit sales would remain the same. A similar number of retailers and wholesalers were as optimistic about their dollar sales as they were about their unit sales. Once again, they projected their dollar sales would be up by close to 10%. However, the number of dealers who believed their dollar sales would be down was greater than the number of dealers who believed their unit sales would be down. Tis is in contrast to the results from MTD's fnal 2012 survey, when many more dealers said higher prices ofset fewer unit sales. ■ Chart 26 2013 AVERAGE ADVERTISED OIL CHANGE PRICING (In the U.S.) $25 $20 $15 Avg. ticket Air conditioning: 18 $353.55 Alignment: 67 $80.45 Batteries/electrical: 28 $134.28 Bearings/seals: 12 $242.96 Brakes: 45 $244.58 Chassis/suspension: 23 $309.33 Cooling systems: 19 $151.37 Engine diagnostics: 23 $123.77 Exhaust systems: 9 $246.30 Mounting/balancing: 250 $10 $5 0 2013 2012 2011 2010 2009 Chart 27 2013 AVERAGE ADVERTISED TIRE PRICES (In the U.S.) Size Price $53.79 P185/65R14 $63.48 $77.18 $75.06 Oil/lubrication: 135 $37.51 P185/65R15 Shocks/struts: 11 $360.78 P195/60R15 TPMS: 21 $85.88 P205/55R16 $95.59 P225/45R17 $117.28 Source: MTD 2012 Tire Dealer Automotive Service Survey. 50 2008 MTD January 2014