Regardless of whether your car runs on gasoline, diesel, batteries, or even hydrogen, it’s probably going to need tires at some point. After all, they’re the only four things meant to touch the ground, providing the grip to keep you on the road. However, before you pop down to that local tire shop, just know that it might not be around in the same form forever. Like with many things in automotive, private equity is coming for local tire shops, and what comes next might get weird.
Tire shops are one of the hottest businesses for private equity to break into right now. In July, Percheron Capital-owned Big Brand Tire & Service Co. reached an agreement to acquire Belle Tire Distributors, a century-old chain of tire shops across the Midwest. Once this acquisition closes, Big Brand will own an additional 185 storefronts. On a similar note, Sun Auto Tire And Service, majority-owned by Leonard Green & Partners, has acquired enough small chains and independent tire shops to now boast more than 600 storefronts. As Automotive News put it, “It seems every week one of the handful of large private-equity-backed dealerships is buying an independent tire shop or a regional chain.” and there’s good reason for that.
Even in a recession, tires sell. More buyers might switch from something like a General to something like a Goodride, but in a labor-heavy industry, margin on physical products is almost tangential to margin on service. Tire shops also don’t require nearly as much equipment as full-service repair shops, they offer fast customer turnaround, and they’re relatively futureproof. Sure, new machines may eventually be needed to mount tires to some of the ridiculously large wheels certain modern SUVs roll on, but that’s a lot cheaper than upskilling technicians with EV training. What’s more, the tire business is extremely fragmented, featuring a heavy mix of independent owners, some of whom are looking for an exit. If the owner’s kids don’t want to take up the family business and none of their technicians are looking to make the investment to take over, they have a reason to want to sell to someone.
So what does that mean for drivers? Sometimes it’s just easier to buy tires at a shop, sometimes you need an emergency replacement tire, and even if you generally buy tires online and have them delivered, you probably don’t have mounting and balancing equipment in your home garage. Well, this rush of acquisitions comes with a whole load of potential pros and cons. Let’s start with possible upsides.
Lots of independent tire shops only have agreements with a small handful of distributors, effectively middlemen for tire companies. It’s often not cost-effective to carry huge inventory, so many sets end up being ordered in. Many smaller independent service centers that do tires in addition to other mechanical work may only have a supply agreement with one tire distributor, and as a result, pricing and availability aren’t particularly competitive. Think margin as little as 10 percent on a quote that may be more expensive than if a customer were to simply order from a big chain. Conglomeration can help here due to scale.
If a small shop sells 20 sets of tires a week, it’s often not big enough to warrant the expense of warehousing or the logistics of direct accounts with tire companies. However, if said shop suddenly joins another 20 shops each averaging 20 sets of tires a week, that’s 400 sets of tires per week across the group. That’s much better buying power, and it can translate into having the resources to make direct deals with tire companies, have a truck running tires around the region, and getting both better margins and better pricing for customers. At the same time, buying tires from a large group opens up opportunities for greater independent road hazard warranty support, better booking and scheduling tools, and cheaper storage options for seasonal tires, and other convenience perks for customers.
On the flipside, the whole model for private equity is to juice short-term profits or, if that fails, strip companies of their assets and parcel them out. Efficiencies might mean cutting staffing, or raising prices, or changing the selection of tires on offer. Speaking of selection, conglomeration makes it harder for consumers to accurately cross-shop because the name on the sign might not accurately reflect the corporate management. Two seemingly different tire shops might be owned by the same investors, have the same suppliers, the same sort of pricing, and similar overall standards.
Let’s look at quick-lube places as an example. Nowadays, there are only really a few major chains of fast-service oil change places. You have Jiffy Lube, Valvoline, and Take 5 all, with huge slices of the industry’s pie. Local options are comparatively few and far between, and the exact same thing is happening in the tire industry. Just look at Mavis Tires’ acquisitions of Pep Boys and Midas. The number of chain names in the telephone book remains the same, but that’s what private equity firms pay for. Meanwhile, the amount of actual consumer choice has dwindled.
Another big issue, albeit less to do with drivers and more to do with people looking to make a living in the trade, is the concept of pulling the ladder up. Historically, independent tire shops have been run by someone local in the community. You might’ve gone to school with them or met them while pursuing a shared hobby, and selling tires is a way to keep the lights on, pay the mortgage, and keep a little something for retirement. Someone with tire know-how, decent business sense, and good enough credit could get a bank loan and start a tire shop, and so long as they stayed in the black and took care of customers, it was a way for people like you and me to make a living. That’s getting harder to do in the face of rising commercial rents, and it gets even harder when you compare marketing budgets of a private-equity-owned chain versus an independent operator.
So, if you like to actually shop local or are thinking about opening up a tire shop, what’s the actual path forward? In some cases, it’s going mobile. Storefronts typically need to be in convenient locations, branded, permitted for automotive, and staffed both front-counter and back-end, no matter how busy or quiet things are. On the other hand, a commercial storage unit typically doesn’t require leasehold improvements, and it’s often cheaper to put a tire machine and a balancer in a van and have a tire technician show up at a customer’s home or office. It’s a more cost-effective way of getting into the industry, and it comes with a level of convenience the big brick-and-mortar chains can’t match.
I switched over to a local mobile tire shop years ago, and I don’t think I’ll ever go back. Cost is very competitive when viewed against the brick-and-mortar chains, service is excellent, and the guys there really know their tires. More than that, they’re good dudes making an honest living, and it’s nice to support a company that takes care of its people. Even though private equity acquisitions of tire shops are on the rise, it’s probably not worth panicking yet. Independent shops that are truly independently owned will still be around for a while yet, and that now includes an increasing number of mobile tire fitters. However, if you want to shop local, it’s worth doing a little research to find out if that seemingly independent tire shop is truly independent.
Top graphic image: Deposit Photos
It will be interesting to see how they screw this up…
I see what you did there. Nice pun. They make a blanket policy that screw punctures in tires cannot be plugged (when they easily can) and then they sell you a set of 4 new tires.
In my area (middle TN), tire pricing is pretty competitive regardless of where they’re coming from. The biggest issue over the last decade or two, is the rapid increase in accessory labor that comes along with it. Had to have a tire on my car replaced under road hazard warranty last month, so the tire was comped, but still had to pay to mount/balance the new tire. $52 after sales tax. Instantly add $200 to any 4-tire quote simply to mount/balance. The last remaining mom/pop tire shop in town gets $40 per tire, and they were $10/tire 20 years ago. Yeah, they gotta pay the tire tech for that hour or so (including removal/installation) and pay for the valve stems and/or TPMS seal kits, but that’s a healthy margin nonetheless.
Try ordering your tires online and having them shipped to the installer…
Most non-indy shops have an additional surcharge that screws over anyone in this situation. Mavis Tire charged me $75 per tire to M&B the last time I got my tires from Tire Rack and shipped to my door. That’s $300! To mount a set of tires I paid $600 for… This time around, they quoted me $640 to M&B. Unreal!
And no, this is not the same thing as ‘providing your own parts’ for a mechanical repair…
FWIW, Mavis Tire Express Services is owned by an investor group led by BayPine, partnered with TSG Consumer Partners and West First Management, with Golden Gate Capital retaining a minority stake.
PE wrecking EVERYTHING…
I’m aware. That’s how I know the local mom/pop place is now $40/tire. Last set of tires I bought came from Tire Rack already mounted to wheels, but had to go to Discount Tire (who owns Tire Rack) for the Road Hazard because they were the only shop in town who had that particular tire in stock and were glad to hit me for the $52.
And the PE group behind Mavis just completed the acquisition of Pep Boys from the Icahn group last month for $700M.
Here in my city we have (had) an excellent, multi-location and locally-owned car wash outfit, the huge acre-sized kind. I say had because private-equity bought them out and the enshittification soon began. Now, 1 in 3 vacuums don’t work, the cars come out dirty and the equipment and upkeep in general are now crap.
Of course, down the street they are building another one just like it but the building is painted a different color. It’s like a different color of pure magic.
You know it wasn’t a joke when Hollywood chose car washes to launder money!
When my Father had his Ford dealership I used the lift and tire mount and balance machine whenever I wanted. Those covered 90-95% of my automotive maintenance and repair needs. Every year I get closer to just buying my own lift and mount/ balance machines. I have 6 cars plus my wifes. Maintenance is a thing. PE might force me into business for myself.
Till then I support my locally owned and operated mom and pop shops.
A lot of younger generations complaining about “boomers” and starting to do the same about gen x. Well, they’re about to get a lesson because when the last boomers retire or die and the gen x men and women don’t take over the family business, crap is gonna get real expensive real fast and service will be out the window.
I did this for motorcycles. Bought a manual machine and a static balancer. No more $50 for a wheel-off-motorcycle tire change, on top of a $50-100 higher tire price than online.
The only way I can afford to have all the stuff I have is because I can work on it myself and have a lift and tire changer.
I have some used tire places around me that do a decent job at mounting and balancing. The guy I know that sells tires makes more on anything else. Now the PE shops are popping up all around him he his just selling specialty tires that he doesn’t really stock. While focusing on other jobs like suspensions, mufflers, alignments, lift kits. He also is going more into medium duty because the PE shops won’t touch them.
Walmart is so hit or miss but I will go to the everytime over a PE shop. The guys there have no interest in ripping people off. I’ve had them apologize because a tpms sensor was about $30 with free installation that they did in 10 minutes. Or it took close to and hour to mount and balance 4 wheels including moving a spare and I guess they like to do it in 20 to 30 minutes.
So far in my area, Wal-Mart has been pretty decent with tires. We have three vehicles with tires from there and have very few complaints.
Yep, they installed new tires on my 300TE and daughters Accent. They are hit or miss though depending on locations’ personnel.
I don’t think I’ve heard of actual issues coming from them just very slow. I’ve seen people scream about wheel studs. But Subaru issues. Most will put them on if you have one. Just not dealing with crazy screaming. Will tell them where to get it fixed.
I was at one 4 hours one time. I would casually check in about every hour and say I guess it takes as long as it takes. When I went to check out there was an angry mob yelling they had been there for 6 hours so I guess don’t bother them and they get you in faster then some. I wouldn’t ever go back there though.
I’ve heard of people having wheels fall off a few days after getting tires from PE shops and Sam’s club, Costco, BJ’s.
WalMart was the longest I’ve ever had to wait on a set of tires, but in fairness it was a “I need whatever you have that will fit my car ASAP” situation. I had a cord fail on a tire on a cross country drive just outside Laramie WY and they took care of me as soon as they could so I’m not complaining.
I did double-check the wheel torque on my next fuel stop and with my torque wrench when I got home because it was in the back of my mind the whole rest of the trip.
I think Walmart is safe enough. Especially one in Wyoming or similar place. Some of the more city locations seem to have longer waits. I think a large part of it is who they can employ in those locations and the nutjobs coming in. When there is a higher cluster of them more suburban or small towns closer together both with auto centers it’s not as bad.
I don’t know why the clubs are having so many problems. I would have thought Sam’s club and Costco were safe enough but too many stories. BJ’s and PE shops I have no assumptions of them being good at anything.
I know Costco leaves you a note instructing you to return to have your lug torque checked after (I think) 25 miles of driving. I assumed it was just a CYA move.
They need to have the guy checking the torque to do that before the vehicle goes out the door. 25 miles seems very low just enough people won’t do it. I’ve seen the Walmart guys take the car off the lift drive it around the parking lot and recheck torque.
I’m generally a proponent of Costco’s business practices (they generally seem to be the least bad option) but the cynic in me thinks this is probably by design. I can see it being something of an involuntary liability release if the recheck isn’t performed and there is an incident.
You have to be mechanically deaf to not hear an impending wheel falling off situation. I had some (non-tire related) work done on a Saab 9000 years ago. A week later, I was driving around town and heard an odd sound coming from the right front. I stopped, looked and saw a wheel bolt was backing out. I took a Crescent (I know, it’s trademarked) wrench out of the trunk and cinched it back into place and later used a torque wrench to get it back to spec. I called the owner of the independent shop that did the work to let them know. I wasn’t looking for a refund. I didn’t get one, but I also didn’t get even an apology. I found a better independent shop after that.
These were not people with any real sense. Heard a noise and wheel was loose. I’ve only had it happen one time on a short drive home for a dealer after they did a recall. Between that and other things I chose a further away dealer. But I don’t understand how people don’t hear it maybe they think it’s the road their music is up loud or they are just that checked out from society.
For sure, I think there are more good then bad. Bad really just means they are busy and / or slow. I’ve had to wait 3 or 4 hours once with an appointment. Other locations I’ve walked in and out in 15 minutes with no issues.
Plus the cheap all weather tires from Chinese or Taiwanese companies normally made in other Asian countries. Highly engineered and well made for a very reasonable price. I’ve had no issues with horizon tire / Linglong or tireco/ nanking and sub brands. I refuse to run Bridgestone / Firestone from constant trouble. I’ve had issues from good year and even michelin. The big brands tires Walmart stocks are unique to them I’m not sure it’s a bad thing. I’ve heard people on both sides. If you have the option of a cheaper superior tire I don’t see the point mucking around with a brand because it’s better known.
Apparently walmart+ members get free mounting with road hazzard now ? Idk if it it’s just a limited time. I’ve talked to a few guys working there that said they used to work at a place taken over by PE so went to work at Walmart. Don’t have to sell a thing and people come to them. Just can be honest
Depends on who is working that day and who is running it.
Walmart I used fell in line with the “can’t fix it, have to sell you new tires” scam.
Yeah can be hit or miss. Most of the time it’s pure laziness they have no financial incentives to rip you off. They just don’t want to put the tire in the tub and look for a leak.
I’ve had some crazy situation where they have been better then I thought possible.
Like I brought a set or nittos for a truck that didn’t ever have tire issues. So I guess I didn’t get road hazzard. Sidewall knocked out maybe 5 days after . Took it in they went yeah just $40 for the road hazzard and good to go with a new tire. Out in 30 minutes. Then it happened again few days later on w different tire . Guy looked at the record laughed and went you want a different kind of tire these aren’t working out too well for you. I ended up with a set of horizons and got money back. Never any issues out of them.
Unless Private Equity can also make a mean tamale, I’m not worried.
Yes, my local tire shop is also a Mexican restaurant. Yes, it’s as awesome as it sounds.
Llanterias usadas ftw – BMW and Stinger get fresh rubber from Tire Rack that I can have mounted for about $80, but for all my old clunkers an 80% discount for BFGs with 80% tread remaining is hard to pass up, even if it means I’m replacing tires slightly more often – and enjoying a homemade meal from my shop guy’s wife just makes the savings that much more delicious…
I had a similar shop that I went to in NM. And there was another tire shop that was also a barber shop.
You aren’t by chance referring to Victor’s Tires in SLC are you? I swear they have the best tamales I’ve ever had.
Yes, my favorite tamales are from a tire shop. The fact that a tire shop can sell tamales should tell you how amazing they are…
Wasn’t Les Schwab was bought by PE years ago?
Well that would explain why they’re rapidly expanding all over the midwest.
Our aftermarket performance shop gets PE pitches constantly – one or two per day. There’s a lot of money sloshing around. One of our biggest competitors got bought by PE last year and it’s been tough for the employees.
Luckily, when our founder retired, he sold the business to the employees and it’s now a coop. He would not allow the company to be shelled.
For many many years we had a locally owned tire shop that expanded into five locations. We also had a couple of independents, one which I frequented. Johnny was a nice guy, wife did the storefront, kids worked in the shop, and he had the open framing of the interior walls filled with Tonka and similar trucks. I brought my grandkid in to check them out, and he gave us some low quality ones, which the grandkid was thrilled about. Ah,the good old days (which was only about 3 years ago).
In the span of a couple of years, the local chain folks retired along with two independents. Now we have several of the Big Brand shops taking over along with a couple of Tire & Brake Centers. I had my suspicions about Big Brand (what a stupid name) and T&BC as well. We do have a Les Schwab and a Big O and one other local who took over a Firestone location.
I was about to investigate tires using Tire Rack and having them delivered to a shop here, when I was way out of town and felt some rumbling through the steering wheel. I asked my host (who worked at a body shop) for a local recommendation and ended up at Les Schwab and ended up needing tires. Well, at least there is a LS local to me, and I didn’t need to use one of the PE places. I did go to one for a patch, and I didn’t like how they treated me.
It has been years since I needed to buy tires as I bought my ’20 Prius new and work from home, and my spouse finally stopped leasing and bought a ’25 Rav4. I only put 32k miles on my Prius since new. When I commuted, I was putting 100 miles a day on my car.
Here in upstate NY, Adirondack Tire was bought by PE then shitified. Existing customers and Techs fled.
I need to start a local tire shop. Get some of that sweet sweet PE money.
That was always the struggle. I owned a small ish shop, comfortably a good half hour drive from any competition, but in a smaller rural area that kept us from really having growth opportunities other than taking business from the bigger shops in town. The only way to do that was with aggressive pricing, and making service lightning fast.
People rarely dropped off thier vehicles to have tires done, most everyone waited for the service to be done. So we basically traded on being super fast and super cheap.
We typically did around 15 sets a day in the slow season and up to 40 sets in the busy season. No matter what, profits were razor thin.
If a tech accidentally broke a tpms sensor (or God forbid scratched a wheel), I was making less than nothing on a set of new tires.
I soon found though that this was all simply at the mercy of bigger tire distributor owned stores.
If I paid $100 per tire (my cost)I typically charged 129-139 per mounted and balanced.
These suppliers (who all had thier own retail stores because of course they did, crazy not to)
Would have a cost more like 50-60 dollars per tire.
If they desired, they could undercut me by 15 bucks a tire, cutting out essentially any profit potential I had, and still make more profit than I ever could.
They also loved to play the game of “sign with us for all your Goodyear/Firestone/whatever brand tires for the year” and we’ll lock you in at this price on this line” only to just stop stocking the line halfway through the year.
Or some would just blatantly raise prices anyway, assuming that most small store owners don’t bother to even check them when placing orders.
I could write a book on the Sheisty crap these big companies pull on the little guys. I liken the tire business to the restaurant industry-intense competition, razor thin profits, very little customer loyalty, and infinite possibilities for employees to make a small mistake and cost you a lot of money and business.
This was actually a side plot on the Netflix Show “Tires”, with Shane Gillis. I had no idea how the tire industry worked with the deals and whatnot and learned it from the show. Them making deals with distributers and getting screwed over by the larger shops was an ongoing theme.
I really gotta check that show out
You’ll pry my local tire shop from my cold, dead hands!
It helps that they’re wildly popular and specialize in aftermarket setups. And they’re next to two municipal government buildings that employ a combined 2000+ people.
Telle Tire bought damn near everything up in my area. I’ve never used them but they bought the Goodyear store I worked at in high school and college.
I’m to the point where I think America needs a hard reset on the economy. I feel like “investors” just means lazy people who want to exploit the workforce even further. Vulture capitalists won’t be making tire buying better for you and me.
Unfortunate. I went to Belle Tire for the five years I had one two miles down the road. My Fiesta was in for new tires one day, and the shocks were leaking and pretty much gone. The guy acted like he was about to tell me a family member died when he informed me. Now, I knew it needed new shocks, but hadn’t realized they were as bad as they were, so I ponied up. Car rode better after that than it had when it was brand new, so I’d consider it money well spent, even if it did make bills kinda tight. They discounted the labor since they were already in there and had things apart. Never had a bad experience with them. Place was always super busy and it gave me family business kinda vibes because they seemed to know everyone by their first name.
I’m eventually going to make T shirts.
Private
Equity
Ruins
Everything
A good recent example is Fender guitars, and their attempts to box out the small guitar builders who build similar (but better) versions of these classic electric guitar designs.
At least Costco isn’t owned by PE (yet). I’m happy to get my tires at a decent place that pays their employees a living wage with good benefits.
Thanks for the warning about Big Brand. They took over a shop near me a couple years ago – I’ll be sure not to give them any money.
I work in the self storage industry. Good I think I would feel cleaner at a BHPH site. They are the largest private owned storage company. On one end they screw are beloved tenants by jacking up the price every 4 months. On the other end from what I hear they screw over the investors by taking their money not paying anything for 10 years and offering the profit from selling the group of storage facilities. No educated investors would invest in this. However owning one or two facilities is a profitable business and you don’t have to screw everyone over
Public Storage?
Simply Storage?
My mechanic has the equipment he will check prices and only charge for his cost of tires and mounting. Or I can purchase tires online and ship them to him and mounting only. Or find a local deal on FB and get mounting only. They are truly a great shop that appreciates a person who spends money and isn’t an ass. I’ve probably spent a couple hundred thousand over the years and they take care of me. Frankly with Walmart and the other companies that do other things hopefully we won’t get screwed like with housing
PE is going to destroy real local capitalism as we know it. The little guys will have no chance. As an example, my neighbor has properties, and she mentioned to me the other day that her excellent independent tree guy now works for a tree corporation
Can’t have a family owned business doing well enough to support that family, when that capital could go to the already filthy rich instead!
Sorry in my job I have to deal with contractors and other companies doing repairs and maintenance. They all fucking suck and they are all more expensive because they get paid and angis or some other companies get paid and the quality sucks.
Sigh. A good time for me to remember and appreciate All Tire in the Portreo Hill neighborhood in San Francisco. These guys mounted the alloy wheels/tires I bought in July 2007 for $24. Did it in the promised time. A few months later I ran over a screw on and went in to get my tire patched. They fixed it (within the promised time) and when the guy was ringing me up, he noticed that my car was in their system. Just to confirm he asked, “We’ve had your car before, right?” I answered, “Yes,” and upon hearing that, he crumpled up the bill and wished me a Happy New Year. ‘Told me to come back when I needed new rubber.
Nice.
Private Equity is a KGB operation to destroy American businesses from within and they will take all the money at the same time.
It claims to be good capitalism, but really just crushes the little guy
I use a mobile service for my bicycle.
I can book ahead, they’ll show up at my office and tune up the bicycle while I’m still at work. They do a decent job, and everyone from a window seat can see this guy working on my bike, so they ask me how good.
They have every incentive to do a decent job, and get new business by word of mouth that way.
I did a few bicycle restorations for people while I was between jobs. There was no money in it, not even at the ex-Lotus engineer doing retro 90’s niche MTBs end of the market.
I set up the 24 speed gear shift on an old GT that was owned by one of the guys who designed the gearbox of the Bugatti Veyron. I know he could have done it himself.
I hate the PE trend. The big locally owned HVAC company recently was sold to PE. The new policy? Every call you have to upsell an additional 500-1000 service. Plus the hoverboard bois invade the neighborhood everytime they come.
What is a hover board boi?
Idiots on two wheels hover board things that knock on doors trying to sell you services. Most of the time pest, solar, security, but PE HVAC is using them too. Some times communications. Now permanent lighting is another thing. I’ve heard PE landscapers use them to. They are very rude. I’ve been very close to ordering one to figure out a Bluetooth exploit to brick them. But they finally left me alone.
Spark gap generators or Edison ladders can disrupt wireless signals, but it won’t brick them. Actually it could, but at that point you are making lightning bolts.
I was thinking more flashing a modified firmware vs an physical hardware attack. Could probably ultrasonic desolder something but cost and effort too high.
They used to block terrorists by jamming local signals.
Now they ring every nearby mobile phone simultaneously! Hello!
Uhgg. This all sucks. I hate all the service industries being swallowed up by this unfettered PE machine that is sucking anything good. Support small business they claim as they buy them up.
A PE company bought a local donut shop in central Pennsylvania, you’d think a business like that would be below their radar, but, evidently not
Yeah. I am sure there are some PE’s out there that are not literally scavengers, but most of them seem to operate exactly like a scavenger.
Mortuaries as well.
Dignity is very sketchy I’ve heard all sorts of stories from an mortician buddy who was on a state review board. It pushed him to open his own place after seeing what they were up to.
It’s not like they’re spending any of their own money.
Look up Veterinarian Practices.
Be even more disturbed.
I am unfortunately aware of that gross practice as well. It only further fuels my abhorrence for anything related to PE’s.
Alas, our favorite local vet practice has been swallowed by such an entity. Which really sucks. Now they are open fewer hours and there’s only one vet left that we personally know and like. We’re searching for an alternative, but this is a big bummer.
Dentist offices too. They keep the name of the practice to make it seem independent and usually make the previous owner work there for 3-5 years as an employee.
Also opticians