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October 22, 2001 02:00 AM

Snapshot of a `typical' major retail dealership: Auto service still king

Bruce Davis
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    AKRON-After gleaning data from companies across North America, Tire Business has come up with a snapshot of what the ``typical'' major retail tire dealership looks like.

    Based on the average number, the continent's largest dealerships operate 56 stores. When using the median, the typical major dealership has 29 stores.

    The average store rang up sales of $1.37 million during the past year, according to data from 46 companies that volunteered information. That number rose by 14 percent over the $1.2 million average of the past two years.

    Tires represented 56 percent of sales, on average, in a range of 26 to 100 percent; 15 dealerships reported tires contribute less than 50 percent.

    Automotive service was 35 percent, in a range of 0 to 66 percent of retail sales; on average, the leading dealerships derived 9 percent of their retail sales from other services, ranging from 0 to 65 percent.

    The average store of those dealerships that responded to the TB survey had 11 employees, and those dealerships that offer automotive service operated an average of 7.5 service bays per store.

    Several dealerships pointed out that they normally reserve as many as half their bays for tire mounting and related services only.

    Automotive service continues to outperform tires and related service.

    The average profit margin for auto service was 63.1 percent last year, twice the 31.5-percent margin for tires, according to the survey results. Profits from tires ranged from 20 to 49 percent, whereas the margin range for auto service stretched from 35 to 78 percent.

    Of the companies that responded to a question about the types of auto service offered, 100 percent said they perform alignments and brake service, while 97 percent offer shock and strut service, and 88 percent do some form of oil and lube service. Among other service work:

    * Air conditioning-72 percent;

    * Exhaust-63 percent;

    * Tune-ups-55 percent; and

    * Transmissions-40 percent.

    The dealerships profiled carried an average of 7.6 brands, in a range from one to 13. Of the brands carried, on average private brands made up only 1.4; imported ``offshore'' brands (Hankook, Kumho, or Toyo, for example) were less than one of the brands carried.

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    Do you have an opinion about this story? Do you have some thoughts you'd like to share with our readers? Tire Business would love to hear from you. Email your letter to Editor Don Detore at [email protected].

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