Mobile tire installation services are having a moment, propelled by a powerful one-two punch: consumers' Amazon-ified expectations for convenience and COVID-19, which has further whetted their appetite for more at-home services.
"People value their time more than ever before, and they don't want to take two to three hours out of a day to get their tires changed," says Derek Naidoo, co-founder and CEO of GoMobile Tires, a franchise-based mobile tire installation service. "So why go to a shop when we can bring the tires to you and install them at home, where you work or even while you're on a golf course?"
The growth of mobile tire installation services poses a dilemma for fixed ops directors: Do they cede the market to a growing number of already established mobile tire installers or make expensive investments in vehicles, staff and equipment to compete in a low-margin service sector?
It's an important issue because tires will become an even more crucial revenue generator for fixed ops departments, thanks to the growing popularity of electric vehicles, which will require fewer repairs and less maintenance. EVs also wear out tires faster, industry experts say.
A growing market
There is plenty of competition in this arena. While statistics about the size of the market and how much it has grown during the last several years aren't readily available, anecdotal evidence abounds.
Several national franchisers, such as GoMobile, Tread Connection and In-Motion Tires, offer mobile tire service. So do many small independents and medium-size regional operators. Brick-and-mortar tire sellers are following suit, as evidenced by Goodyear's Roll and Bridgestone's Firestone Direct mobile programs.
Online tire retailers such as Tire Rack, Tire Agent and Tirebuyer.com also offer mobile service.
In fact, GoMobile also has forged partnerships with four online retailers, Naidoo says.
Mike Bush, owner of Bush Specialty Vehicles, which outfits vehicles for mobile services, says orders for tire installation trucks — which cost about $100,000 fully outfitted — skyrocketed about 500 percent from 2019 to 2021.
"In the last five years, we've gone from maybe a couple orders a month from independent installers to a backlog of more than 200 orders from a broad range of customers," Bush says. "It's all changing … COVID is pushing [at-home services] ahead about 10 years."
Have truck, will service
Ed Roberts, COO at Bozard Ford-Lincoln, a single-point store in St. Augustine, Fla., is all-in on mobile services. The store runs four mobile service trucks and has ordered six more, he says.
Bozard's mobile technicians offer a variety of services. By the end of 2022, they'll also install tires — a natural extension of existing services, Roberts says.
"We already install tires three days a week for fleets," he says. "We take wheels and tires that already are balanced and swap them out, like at a pit stop during a NASCAR race.
"I think it's extremely important for dealers to enter this space," he adds. "It's all about convenience for customers. As a society, we're conditioned to have things brought right to our fingertips, so from my standpoint our customers will want more mobile services."
But Roberts doesn't feel threatened by mobile installers.
"I have zero fears about what they'll do to our fixed ops department," he says.
"Anytime someone brings a new service to market, there's skepticism," he says. "But when many people provide that service, opportunities open up because people become more open to embracing it."
Insufficient ROI
On the other end of the spectrum, fixed ops veteran Rob Gehring isn't feeling it. The owner of consulting firm Fixed Performance Inc. says profit margins on mobile tire installations aren't high enough to justify the significant startup costs.
Furthermore, good technicians already are difficult to find. How will dealerships find even more?
"I don't believe it's a good business model," Gehring says. "I may be totally wrong, but I'm not buying into mobile services. The initial cost of a vehicle is about $70,000, plus you need a tire changer, a balancing machine, wheel weights and other residual components."
In addition, the profit margins on tire sales also are slim, hovering around 12 percent, he notes.
"So you're taking one of the lowest profit-margin operations, then adding the expense of a vehicle, staff and equipment and believing it will be a profitable business model," he continues. "I just can't connect all those dots."
Moreover, mobile technicians can't add on recommended service items as they could if a vehicle was in a shop, he adds.
Roberts agrees with Gehring. But over time, he believes dealerships will be able to charge more for tires instead of treating them as loss-leaders, along with batteries and brakes, to attract customers to service departments.
"Margins on tires will get better because in order to make those trucks profit centers, that's where it'll need to go," he asserts. "Remember that before the iPhone, cellphone service providers gave you a phone to get you to buy their service.
"Now we pay $1,000 for an iPhone and still pay for the service," he adds. "That's what I think will happen in the tire business."
Naidoo says margins on tire installations are better for GoMobile's franchisees compared with dealerships because they don't have the high overhead costs associated with large brick-and-mortar facilities. GoMobile charges $175 to balance and mount tires as well as take away old tires for recycling. It takes a technician about 45 minutes to install tires, he says.
Established in 2018, GoMobile now has 17 franchises in 14 states and plans to double that figure in 2022. Its annual gross revenue has increased an average of 18 to 20 percent, including a pandemic-driven 45 percent jump in 2020, Naidoo says.
Is Naidoo concerned about competition from dealerships?
"Not at all," he says. "If anything, we're looking to partner with them on installations. We already do work for some car dealerships."
In the end, however, Roberts says dealerships still have an advantage because they offer a full slate of services that mobile tire installers can't provide.
"When our mobile customers need additional work, we can pick up their vehicle, service it and deliver it back to the customer," he says. "We bring them the best of both worlds."
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