Stay on Track With Tire Sales

Now’s the time for dealers to shift their thinking about tire sales from loss leaders to customer retention tools – and profit generators.

Those attending this month’s National Automobile Dealers Assn. Show in New Orleans can discover software to help their service departments sell more replacement tires, retain tire replacement customers and generate income.

“Only 8.5% of tire changes are done by franchised dealerships,” Brad Kokesh, chief revenue and operations officer at TraXtion, tells WardsAuto. “The rest are done by aftermarket providers.”

That’s a sizable loss of potential revenue, given that the U.S. replacement tire market in 2023 was valued at over $57 billion, according to Statistica.

At NADA, TraXtion, whose core product is TreadSpecX, a drive-over diagnostic tool, will showcase WheelSpec, which uses data gathered by TreadSpecX or a competing product to generate automatic tire replacement quotes as a vehicle enters the service lane or bay.

The quotes include the tire on the vehicle, an original equipment manufacturer tire and a discounted tire.

“WheelSpec is a comparison quote similar to what you see in the finance office,” says Kokesh.

That frees up service advisors to focus on other tasks, he says, while still providing the tire quote information to both the customer and the advisor.

WheelSpec is now on sale.

Catching Those Dings

Dealers can lose up to $15,000 a month from customer claims that a service department dinged or scratched a vehicle, says Kokesh. DamageSpeX, another TraXtion product to be shown at NADA, can help prevent those losses and drive body work revenue, he says.

“We take up area in the service drive with our drive-over system (TreadSpecX) and we wanted to address concerns dealers have brought to us,” says Kokesh. “(DamageSpeX) presents opportunities to make revenue on small body damage including dents and scrapes.”

When a vehicle enters the service lane and drives over the TreadSpecX system, DamageSpeX quickly detects body damage. That can create additional revenue if a dealership has a body shop. Or TraXtion partners with Dealer Tire, which owns Dent Wizard, says Kokesh.

Making It Mobile

Service professionals log a lot of steps and waste time walking back and forth from their desks to the service lane. TraXtionMobile, another TraXtion product on show at NADA, is a mobile-friendly version of TreadSpecX.

Making it easier to inspect tires leads to increased revenue from related services such as tire alignment, says Kokesh, but other issues are revealed, as well.

“Dealers are seeing our system bring revenue because in order to inspect almost anything you need to remove the tires,” he says. “The minute you take the tires off you can inspect brakes, tire rods, struts and other parts. The additional products around the wheel are additional revenue.”

Customer Retention Key in the EV Age

Keeping customers coming back to the dealership for replacement tires is going to be “massively important as more EVs are on the road,” says Kokesh.

He compares tires to an oil change; a service item dealerships initially gave ceded to the aftermarket, then began offering again for customer retention reasons.

Electric vehicles have fewer moving parts and don’t require the ubiquitous oil change service, but they do go through tires more quickly than gas-powered vehicles due to the EV’s weight and regenerative braking, says Kokesh.

Ed Lujan, service director at Santa Monica (CA) Toyota, agrees selling tires leads to selling other service needs including brakes, shocks, engine leaks and lower control arm bushings.

Tires are also a key customer retention factor, he says.

“That is why we can’t let (tire customers) go to our competitors,” says Lujan. “They may not ever come back!”

The growing number of electric vehicles enhances the importance of keeping the replacement tire business in-house, says Lujan. “It’s a fact that tires for EVs wear out faster,” he says.

His manufacturer is absorbing costs to keep tire sales at the dealership, says Lujan. Toyota has offers, including a “Buy four tires, get $100 off” special.

“Toyota eats this cost. That’s how important tire sales are,” says Lujan.