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January 31, 2019 01:00 AM

OUR VIEW: Playing numbers game benefits tire dealers

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    Sales data that foreshadow future trends are available in just about every industry. For example, as soon as mobile phones became smaller, smarter and affordable, sales took off. It was easy to foresee the connected world we live in today.

    Those in the tire and automotive service industry are perhaps more fortunate than other industries in that regard. Sales figures not only illustrate what vehicles are on the road today, but also what will be in tire and auto service shops tomorrow.

    A big chunk of these data was presented earlier this month when our sister publication, Automotive News, released new vehicle sales for 2018.

    Here are two big takeaways from the report: a surge in U.S. auto sales in December capped a year that saw overall volume rise 0.6 percent to 17.3 million cars and light trucks, representing the fourth-biggest year on record; and sales of light trucks, including SUVs and CUVs, grew 7.7 percent to nearly 12 million units, accounting for a record 69 percent of U.S. light vehicle sales.

    That's great news for those who operate tire and automotive service shops. Despite all the talk of an impending economic downturn and the inevitability of ride-sharing and autonomous vehicles, consumers still bought vehicles in record numbers last year.

    Here's better news: 40,000 to 60,000 miles later, those 17.3 million vehicles will need tires ... and brakes ... and repair service ... and on and on.

    The data also provide a peek into tomorrow. According to data from the U.S. Department of Transportation, the average age of passenger and light-truck vehicles is 11.6 years, an increase of nearly 1.5 years over the last decade.

    So if the trend continues, the bulk of those 17.3 million vehicles sold in 2018 will need service at least until 2030. That's just the average.

    Not only do data show how many vehicles will need serviced, they detail what makes and models of those vehicles will need serviced.

    While U.S. sales for each of the five largest auto brands — Ford, Toyota, Chevrolet, Honda and Nissan — declined in 2018, sales of Jeep, the No. 6 brand, surged 18 percent, enough to keep the entire industry in the black for the year. Together auto makers sold about 96,000 more vehicles than in 2017, and Jeep gained nearly 145,000 alone.

    Ram trucks grew substantially, as did Subaru's lineup of all-wheel-drive wagons and crossovers.

    Meanwhile, sales of traditional passenger cars dropped 13 percent to 5.4 million units, the fewest sold since 1958. That fact affirms the decision of the Big 3 auto makers to all but eliminate production of sedans.

    One other notable datapoint: sales of Tesla vehicles nearly quadrupled to around 182,400. Electric vehicles seem to be gaining market share.

    Tire and automotive service dealers should study these data, particularly within their own region, as they plan for the future.

    Letter
    to the
    Editor

    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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