This week, we’re talking about industry trends that are going to affect your tire business. Things could be bad if you let them sneak up on you… or things could be great if you know how to leverage them.
NUMBER ONE is our old friend VMT – Vehicle Miles Travelled. High VMT means more reasons for customers to stop in for maintenance and repairs. Thus far, we only have 2022 data on this front through October, but when you hear what I’m about to say, it doesn’t matter:
VMT for the first 10 months of 2022 – at 3.04 trillion – has actually surpassed VMT for the entire year of 2020 – at 2.79 trillion. Consider this as well: When we compare the first 10 months of 2022 to the first 10 months of 2021, VMT is still up in 2022 as well, at 3.04 trillion compared to 2.99 trillion.
This bodes well for tire replacement and service, particularly given the regular intervals associated with maintenance and replacement. If your shop offers service, prepare to engage in a steady stream of it.
NUMBER TWO: Commercial vehicle tires and service.
According to the team at ACT Research, who study trucking market trends, it’s likely that we saw an all-time record for carrier profitability at the end of 2022, and when trucking fleets make money, they like to invest in their equipment –like tires.
Keep an eye on the world of commercial trucks this year, as new regulations, uses and behaviors will no doubt lead to more commercial service opportunities. Fleets have a heightened focus on employee safety, maximizing operational performance and reducing CO2 emissions, and all of these mean fleet services – including tires – are poised for sustained growth
NUMBER THREE: The cost of business.
Inflation isn’t just tackling consumers – you’re getting hit, too. The big issue here is that wage rates have not risen at the same rate as tires and materials. Since this industry has such a competitive technician employment market, that means some workers may begin demanding higher wages in response to inflation. If you find it becomes necessary to raise your prices to absorb additional costs, be sure to ask yourself if your customers will be willing to take that ride with you.
NUMBER FOUR: If you want to dive in strong on EVs, we just did a whole episode on EVs. Here’s the broad stroke:
While EV interest isn’t yet any kind of overwhelming force, it is growing. Automakers sold over 800,000 fully electric vehicles in the U.S. last year, equivalent to 5.8% of all vehicles sold, up from 3.2% a year earlier. All the while, total U.S. auto sales fell 8% in 2022 from a year earlier.
Here’s NUMBER FIVE: Legislation! Specifically, Right to Repair.
The tire industry has been talking about it for years, but 2023 is a big year for Right to Repair. First of all, there is over 60 state Right to Repair bills that were introduced for the year across the country. Now, those could be anything from agricultural to digital Right to Repair – think items like cell phones and tablets. Regardless of whether it focuses on automotive, we can see the momentum is growing.
John Deere, for example – a company that is notoriously anti-Right to Repair – recently signed a memorandum of understanding with the American Farm Bureau Federation promising to make it easier for farmers to access tools and software needed to repair their own equipment. Now, John Deere could certainly do more based on the wording of that agreement, but the fact that we’re talking about the issue and John Deere conceding anything on it in the same breath is a major step in the right direction.
