Total retail tire units started off 2007 ahead of last year. Sales peaked in March, with tire units up 3% vs. March 2006. Final April numbers show a softening in retail demand, with units up just 1.5% over the same month last year.
Click here for June 2007 charts
Preliminary numbers for May 2007 show a continuing flattening in consumer tire purchases. Broadline tire sales, after starting the year off strong, slowed again in May but remain up 2% over last year. High performance tire sales also show a similar trend – flat for May but up 2% year to date. Light truck/SUV tire sales also peaked in March and cooled off in April and May.
Service Sales
On the service side, overall service sales (in dollars) are running ahead of last year. Both May 2007 underhood and undercar sales remain strong, up more than 3% and 4%, respectively, over May 2006. Final figures for April 2007 service sales were down from March, and preliminary May numbers show a slight rebound.
Dealer Comments
Dealer comments lend some insight as to possible causes for recent sales trends. Many cite rising gasoline prices as the primary cause of current softening sales:
• “High fuel prices are causing people to look for economy tires instead of quality tires.”
• “Gas prices are hurting the older drivers, who are most of my customer base.”
Some dealers see a general softening of demand in their region and other reasons for flat retail tire sales:
• “Car count is down in our shop and all of Orlando.”
• “Weak new-product availability.”
• “We are losing tire sales due to lower prices online.”
General comments from dealers include:
• “Price increases are beginning to erode gross profits.”
• “Wholesalers seem to be able to increase prices more often than we can at retail.”
• “Auto dealers do a lot of advertising and spend more money promoting tires than the small tire dealers can.”
• “I am very concerned about all of the ‘free’ maintenance and ‘tires for life’ programs car dealers are offering.”
• “We are aggressively marketing and advertising our regular scheduled maintenance work to compete with the car dealers.”
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