Growth in the tire industry: Pivoting to services and charting the next frontier
As tire dealerships navigate an evolving landscape, growth remains a top priority for business owners, with consolidation and strategic expansions driving the sector forward.
Leading the pack is Mavis Tire Express Services Corp., with an impressive 3,500+ outlets across brands like Tire Kingdom and Town Fair Tire bolstered by its recent acquisition of 1,200 Midas locations. Close behind are Monro Inc. and Reinalt-Thomas Corp. (dba Discount Tire/America’s Tire), followed by Les Schwab Tire Centers and Sun Auto Tire & Service.
These top players are not just holding steady; they’re aggressively expanding through acquisitions and new builds, signaling robust investor confidence in the industry.
For instance, Sun Auto recently entered Alabama and made multiple buys in states like Tennessee, Mississippi, Arkansas, North Carolina, and Texas. While Big Brand Tire & Service secured a $1.625 billion recapitalization from Percheron Capital to fuel further growth, Les Schwab continues its Midwest push, opening new centers in Minnesota Nebraska, Wyoming, Colorado, Idaho and beyond, with its blend of retail and commercial services.
Tire dealers still going strong:
Despite online pressures on pure tire sales, tire dealers and auto repair shops continue to grow, with buyer interest showing no signs of slowing. Independents tire dealers are increasingly deriving a significant portion of revenue from services, capitalizing on an aging vehicle parc where the average U.S. car is now over 12 years old. With tariffs and inflation, expect car prices to continue rising, further aging the existing parc.
As cars age, owners may skimp on premium tires but won’t delay essential maintenance like alignments, brakes, and diagnostics. This hybrid model of balanced tire and service offerings is key to sustaining growth, insulating businesses from e-commerce disruptions.
For business owners, the message is clear: diversification isn’t optional, it’s a necessity. Shops blending tires with full-service repair report higher customer retention and average order values, turning one-time tire buyers into lifelong patrons. Shore up your training, stay up to date on the latest innovations, and invest in your business to grab your share of the market.
Expansion into untapped markets:
Looking ahead, the next frontier for growth lies in regional expansion and multi-service models. Buyers, consolidators, and investors are focusing on fast-growing secondary markets. While metro areas remain attractive for their scale, regions such as the Mountain West (Idaho, Utah, Colorado) and the Heartland (Nebraska, Minnesota) are surging in appeal due to population influxes and underserved demand.
Les Schwab’s entry and expansion in the Midwest illustrate this trend, with new builds in Nebraska and Minnesota tapping further into rural-commercial opportunities.
In these lower-density areas, multi-service “one-stop-shops” will dominate. A tire-only model can succeed, but offering repairs alongside boosts AOV by 20% or more, as customers consolidate visits.
Les Schwab is pushing into deeper into commercial alongside retail positions for dual-stream growth in new geographies, while the tire giant Discount Tire/America’s Tire is piloting service and repair with some of its latest acquisitions, recognizing revenue leakage to competitors offering bundled solutions. Though a full-service dive remains to be seen, their strategic acquisitions signal they’re taking a hard look at the strategy, potentially unlocking billions in untapped synergy.
Big Brand Tire is leaning into tire-heavy acquisitions (though not exclusively, but tire units remain a key driver), snapping up high-performing centers like Reese’s Auto. Conversely, Sun Auto, is not afraid to invest in service-heavy mixes, such as their acquisitions of Fausak Tires & Service and Hindsman & Son, further emphasizing comprehensive car care and geographic expansion.
What’s particularly exciting is the ripple effect this activity has had on regional players. I’ve held more conversations than ever about raising capital to mimic consolidators’ strategies on a smaller scale. Savvy owners recognize that scale drives outsized valuations; they’re crafting growth plans, from tuck-in acquisitions to new-site builds, with an eye on lucrative exits down the line. This entrepreneurial spirit, fueled by industry momentum, could spark a wave of homegrown roll-ups.
The next generation: Tech-driven tires and smarter shops
The next iteration of tires and auto repair isn’t just geographic, it’s technological, especially with EVs and advancing auto tech reshaping the industry. We’ve already seen EV-specific tires emerge as a necessity; standard rubber compounds couldn’t withstand the instant torque, regenerative braking, and added weight, causing premature wear. I recall when Tesla’s were first introduced, tires were wearing out between 6,000 and 8,000 miles—much to the awe and frustration of their drivers. I expect more specialized options to enter the market, plus “universal” tires bridging EVs and ICE vehicles for broader appeal and SKU coverage.
Michelin and Pirelli are pioneering RFID-embedded tires, evolving from TPMS sensors into full “connected” ecosystems. Imagine tires that ping your shop for rotations, alignments, or low-tread alerts—driving repeat visits and turning maintenance into a habitual process, like dentist cleanings rather than waiting for a painful cavity.
In a not-so-distant future, AI could auto-schedule appointments and trigger orders via integrated POS systems (a leap that’s now feasible given current technology and the rapid pace of developments).
Embracing innovations means turning tires into revenue engines, not just commodities. The top performers are proving it: adapt, expand, and thrive. For business owners eyeing the next move, the opportunities are as vast as the open road.
