I’m going to state the obvious: There’s a lot of data out there. What’s not always so obvious is how that data relates to your tire business. Like, consider data surrounding how is the supply chain recovering from pandemic-fueled disruptions. Does recovery mean more tires are on the way to your showrooms? And what about this electric vehicle craze we keep hearing about? Despite the talk, we’re not seeing too many out there – are consumers actually buying them? And if so, do you need to be ready from them?
In the latest episode of Rolling with the Numbers, we break down some of the latest statistics based on industry surveys to try to find the answers.
Some of the stats we dive into on this episode include:
- Data from Smithers regarding disruptions associated with COVID-19
- Data from S&P Global Mobility, on vehicle miles traveled (we go more in-depth on VMT in our last episode if you’re interested)
- Data from J.D. Power’s 2022 U.S. Electric Vehicle Consideration Study
- And more!
Looking for more data to help drive your tires/service business decisions? Click here to watch the full Rolling with the Numbers series.
Here’s the transcript of the show:
David Sickels: Hello, and welcome back to Rolling with the Numbers. Where we present you with data that gives tire dealers information to keep their tire businesses rolling. My name is David, I am the senior editor of Tire Review.
Christian Hinton: I’m Christian Hinton, the associate editor at Tire Review.
David Sickels: Christian, I’ve got a real treat for you today. All right, so I stayed up all night creating the props we need to play a game. The game originates from The Price is Right. I’m sure you’re familiar with it. In this game, there are two prizes and you have to put the right price for the prize, and if you get it, then you win the prize.
David Sickels: You don’t win any prizes today, but I did prepare for you the crown of tire tenacity. That’s right. It’s all yours. If you can get my questions correct.
Christian Hinton: Let’s get started.
David Sickels: All right, let’s do it. Christian, here’s the first one, represented by our tire here: According to our friends from Smithers, the global tire market is expected to rebound from the disruptions associated with COVID-19 at an average annual growth rate of what percent by volume through 2026. Now keep that in mind because our next one is represented by the car: According to a recent study by S&P Global Mobility, vehicle miles traveled also known as VMT has returned to pre-pandemic levels increasing by more than what percent in 2021. Now, here are your options. 3.6 and 10. What do you think?
Christian Hinton: I’ll say for the first one 3.6%. I think a lot of people are starting to get back after COVID and although levels won’t be the same right away 3.6% seems like a decent growth rate and then for the other one I would say average vehicle miles traveled. I would say that’s 10%. It’s increased 10% just because you’re seeing more people on the road, right? So I think that number would be a little higher than the other one. So, those are my answers.
David Sickels: You are right! Despite supply chain disruptions and rising shipping and materials costs, the tire market is steadily experiencing a sustained recovery period here. The fleet channel for light vehicle and truck and bus tires in particular is expected to really move to outpace the overall tire market in its recovery from the COVID-19 downturn growing 8.7% per year through 2026.
David Sickels: Now in relation to VMT, the analysis shows that light vehicles in the U.S. traveled an average of over 12,300 miles in 2021 and are expected to achieve a similar result in 2022. Now obviously, we want as much VMT as possible here. But staying put is better than declining, right? So we’re getting out of that pandemic kind of rut but if you want more information on VMT, you’re going to have to watch our last episode.
David Sickels: Alright. Ready for game two?
Christian Hinton: I’m ready.
David Sickels: Alright. Our first one, represented by the Amazon basics battery, not a sponsor by the way: According to the J.D Powers 2022 US Electric Vehicle Consideration Study released in May. The percentage of shoppers who say they are very likely to consider an EV for their next purchase or lease is what percent.
David Sickels: Our next one, represented by the old man: According to new research from S&P Global Mobility the average age of light vehicles in operation in the US rose to how many years this year, increasing by nearly two months over the prior year. Here are your options, 24 or 12.2. How many people are very likely to consider an EV and what is the average age of light vehicles this year?
Christian Hinton: I think it starts with 12.2. I think there’s a lot of interest for EVs. So I would be surprised if it wasn’t a little higher, but I do think 12.2 is a fair percentage for the amount of people interested in Ev’s next. Because there still are a lot of people interested in internal combustion vehicles as well.
Christian Hinton: Then I’m going to go with 24 for the average age of light vehicles for the next one. I mean, I’ve got a car that’s almost 10 years old now. I know a lot of people are driving around light vehicles that are much older than that, so I would say 24.
David Sickels: You are… incorrect. I’m sorry you got it wrong. But that’s okay. There aren’t real rules to this game, you’re still in it for the crown. Don’t even worry about it. Twenty-four percent said they were very likely to consider an EV for their next purchase or lease and the average age of light vehicles in operation in the U.S. rose a 12.2 years this year.
David Sickels: I mean, that’s still a very high number for light vehicle age. Myself, I’m driving a 2008 Pontiac G6, needs a little bit of work. So I’m really feeling that age right now. So let me just give this context to the EV. The percentage of shoppers who say they’re very likely to consider an EV for their next purchase or at lease climbs to 24%, four percentage points higher than a year ago, this study says. So several factors are at work promoting this increase. The introduction of new electric models, some of which are an important and largely untapped segment like pickup trucks.
David Sickels: That’s a big reason for it. So what does this mean for tire dealers? Right? Obviously Ev’s, all the rage you hear about them a lot now because interest is high. It just means it’s something you got to keep your eye on. It’s something you need to be worried about possibly having to work on these vehicles. Having these vehicles come in, having the correct tires stocked for these vehicles right?
David Sickels: In regard to the average vehicle age here’s my note on this. This is the fifth straight year the average vehicle age in the US has risen. The global microchip shortage combined with associated supply chain and inventory shortages are the primary factors pushing US average vehicle age higher according to the analysis.
Christian Hinton: Makes sense. Makes a lot of sense. I knew that it would be a higher number the amount of people interested in EVs. So I’m mad I got that one wrong. It was tough.
David Sickels: That was a tough one. You’re still in the game – now let’s go on to our next game. Here’s your first one, represented by this obnoxiously large gas canister: According to the latest data from Hankook Tire as, driving frequency approaches pre-pandemic norms, what percent of participants surveyed say rising gas prices are now impacting daily driving.
David Sickels: The next question, as represented by my own personal cell phone: In a recent Babcox Media survey reported in Shop Owner Magazine, when checking the availability of pricing of parts what percent of respondents working in automotive shops say they pick up the phone as opposed to logging in online. Here are your numbers, 78 and 22. What percent of participants surveyed say rising gas prices are impacting daily driving. This percent of respondents working in automotive shops say they pick up the phone as opposed to logging in online. Seventy-eight and 22.
Christian Hinton: I’m going to go with 78% of people say that gas prices are affecting is how they drive, correct?
David Sickels: Yes. Impacting daily driving.
Christian Hinton: Daily driving, yeah. I mean, it’s impacting everybody. You can’t ask one person on the road if gas prices impacted them and they say, no. Right? So everyone’s dealing with it. So I’m going to say 78% and I’m going to say 22% of shops pick up the phone. I mean, online is so popular right now. So it’s not a lot of people are picking up the phone but I would say 22% still do that.
David Sickels: Great guesses: You are correct!
David Sickels: Seventy-eight percent of participants surveyed say rising gas prices are now impacting daily driving. Also, 22% of respondents working in automotive shops say they still pick up the phone as opposed to logging in online when they’re checking the availability of pricing for parts. Some context to the gas prices here, rising costs are not just impacting gas prices and how often people are driving. Over a quarter of Americans, 26%, say inflation is causing them to perform more basic maintenance tasks at home too. So gas prices are also proving a powerful incentive for those considering an electric vehicle, we talked about that. About one in four or 26% say because of current prices they plan to purchase an electric vehicle in the future. Maybe another reason to keep your eye on EVs. Also, it’s interesting that more basic maintenance tasks – like changing your oil, things like that – are being done at home, just due to the rise of inflation.
David Sickels: People are less likely to just get in their car and go out and do anything. So, that’s something to just kind of keep your eye on. Also, in our 2019 survey in regard to the pricing for parts. The percentage who said they used the phone was 36%, that was in 2019. So shops had been hanging up the phone, had been booting up the computer as phone use has dropped to 22%. This isn’t anything new, it does tell us that having fast internet obviously is going to go a long way for your shop. Well, well done, Christian.
Christian Hinton: Thank you so much, David. Oh my gosh, thanks for having me. This is so fun.
David Sickels: Well, I’m glad you thought it was fun because now the prize.
Christian Hinton: Oh!
David Sickels: Well done, Christian the tire crown has been passed down to you. Don it with pride sir. Don it with pride. That crown looks really good on you.
Christian Hinton: Thank you.
David Sickels: So for more business intelligence data to help boost tire dealer profitability be sure to watch out for our next episode of Rolling with the Numbers. If you subscribe to our newsletter, it’s in there, look out for it. Until next time.
Together: Keep on rolling!