The 8% Problem: Why Dealerships Are Bleeding Tire Sales to Independent Shops
- S Thielamay
- Jul 31
- 3 min read
TL;DR
Franchise dealerships capture only 8% of tire sales, meaning 92% of the market is going to independent competitors. This massive leak doesn't just cost dealerships tire revenue; it costs them attached services like alignments and brakes, and ultimately leads to customer churn. Dealerships must optimize their digital tire shopping experience to recapture this revenue without necessarily abandoning their existing OEM tire programs.
Every dealer and successful sales rep knows the thrill of closing a sale, but it's not the showroom that sustains a store—it's service. Fixed ops remains the most profitable area of a dealership, yet a shocking amount of revenue is walking right out the service bay doors.
Let’s talk about a statistic that should be keeping every Fixed Ops Director and General Manager awake at night. According to the National Automobile Dealers Association (NADA), 75% of customers will buy tires from the first person who recommends them, but franchise dealerships are capturing a dismal 8% of tire sales.
Where is the other 92% going? Right down the street to the independent tire shop.
The real tragedy isn't just the lost margin on a set of tires. The tire itself may actually have a relatively small margin. The larger value comes from attached services, keeping the customer, and attracting new service customers online.
When a customer goes elsewhere for tires, the independent shop doesn't just sell them rubber. They capture:
The wheel alignment.
The brake job.
The suspension work.
The next oil change.
And eventually, they capture the customer relationship entirely. In fact, 86% of vehicles are out of warranty, and that same percentage of paid service work is done outside of a dealership.
The Solution: Visibility Without Overhaul
Many dealerships are reluctant to change because they believe they have to scrap their entire Dealer Tire or OEM tire program to get better results. That is a myth.
By implementing digital tools like a Tire Customer Value Calculator, you can estimate how many more tire opportunities your store may capture just by supplementing your current strategy. It’s time to stop asking, "How much profit do we make on a tire?" and start asking, "What is the customer relationship worth if we win the tire?"
Q&A: Dealership Tire Sales & Customer Retention
Q: Why do dealerships only sell 8% of tires?
A: Dealerships capture only 8% of tire sales because many customers perceive independent shops as faster or more affordable, and dealerships often lack a competitive, user-friendly digital tire shopping experience.
Q: Do dealerships make a lot of money on tires?
A: The margin on the tire itself is often small. The true profitability of tire sales comes from attached services like alignments and brakes, and the long-term customer retention value it generates.
Q: How can a dealership improve its tire sales without canceling its OEM program?
A: Dealerships can use supplemental software solutions to add digital tire shopping, enhanced visibility, and modern customer acquisition capabilities to their existing OEM or Dealer Tire programs without needing to replace them.
How Much Is the Tire Opportunity Worth at Your Dealership?
Most dealerships know they are losing tire sales.
Very few know what those lost opportunities may be costing them in tire revenue, service work, customer retention, and future repair orders.
The FREE Tire Customer Value Calculator helps you put a number behind the opportunity.
Simply enter your dealership’s actual numbers and see what even a small improvement in tire capture and customer retention could mean for your fixed operations business.
No guessing.
No generic industry averages presented as promises. Just your data—and a clearer picture of what may be possible: SHOW ME WHAT MY DEALERSHIP MAY BE LOSING ->
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