Magazine for the professional tire industry
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MTD January 2016 Distribution channels Without wholesalers, no dealer can handle 600 sizes T here were 348 radial passenger tire sizes in the U.S. in 2015, according to the Tire & Rim As- sociation. Tat doesn't take into account all of the European metric sizes or speed ratings, or even the three-peak mountain snowfake symbol. So potential SKUs could be at least 10 times that. Add in 248 radial and bias LT sizes, and the need for wholesale tire dealers becomes clear. Te average independent tire dealer buys from fve wholesale dis- tributors. Te largest in North America is American Tire Distributors Inc., which has 138 servicing distribution centers (115 in the U.S. and 23 in Canada) and three mixing centers. Here is the breakdown of passenger tire sizes by rim diameter, ranging from P145/80R12 to P275/25R26: 12-inch: 1 13-inch:13 14-inch: 26 15-inch: 56 16-inch: 57 17-inch: 58 18-inch: 65 19-inch: 25 20-inch: 29 21-inch: 2 22-inch: 7 23-inch: 2 24-inch: 6 26-inch: 1 Te 15- through 18-inch sizes account for nearly 68% of all passenger tire sizes. Radial light truck tire sizes range from LT175/75R14 to LT335/35R26. Tere are also three 85-series sizes. Radials account for 95% of all LT sizes; that includes 68 fotation sizes. Tere was no size atrition in the industry last year, so the 15 new consumer sizes you might see in your dealership this year (see Chart 19) brings the total number of sizes to 611. Tire dealers dominate distribution Had Pep Boys-Manny, Moe & Jack been purchased by Bridgestone Americas Inc., tire company-owned stores would have increased their tire distribution market share by two percentage points at the expense of mass merchandisers. Instead, the percentages remained the same as last year. With 60.5% of the market, independent tire dealers sell more consumer tires to the end user than any other distribu- tion channel. It has been that way for a long time, although the gap between frst and second place wasn't as dramatic in 1975, when tire dealers accounted for 39% of market (see Chart 20). In 1922, when tire dealers were almost the only game in town, their market share was 98%! When you take wholesaling into account, independent tire dealers have an even greater share, because they are the main suppliers to franchised auto dealers (think Dealer Tire LLC), mufer shops and service stations. Consumer tire distribution channel market share Initial channel 2015 1995 Independent dealers 78.0% 68.5% Co.-owned stores 8.0% 9.5% Miscellaneous 14.0% 22.0% "Miscellaneous" for the chart above includes mass mer- chandisers, warehouse clubs, car dealers, auto parts chains, mufer shops and oil companies. ■ Facts section: distribution/inventory Chart 20 CONSUMER TIRE DISTRIBUTION CHANNEL MARKET SHARE (based on retail sales) Chart 19 NEW P-METRIC AND LT TIRE SIZES/SKUS IN 2016 P215/45R16 LL P225/55R19 XL P245/50R20 XL P305/35R20 SL P295/25R19 SL P235/40R19 SL 35x11.50R18LT LRE 35x11.50R20LT LRE 37x11.50R20LT LRE 38x13.50R22LT LRE LT215/80R16 LRD LT285/65R17 LRE LT225/65R17 LRD LT255/70R16 LRE LT305/40R22 LRE/F Source: Tire & Rim Association 0 10 20 30 40 50 60 70 80 2015 percentage 1976 percentage Miscellaneous outlets Tire company- owned stores Auto dealerships Warehouse clubs Mass merchandisers Independent tire dealers 39.0% 29.0% 0.0% 2.0% 10.0% 20.0% 60.5% 13.0% 9.0% 8.0% 7.5% 2.0% 66