Auto dealers assess tire installation as demand for in-home services increases

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“So you take one of the lowest profit margin operations, then add the expense of a vehicle, personnel and equipment and you think it’s going to be a profitable business model,” he continues. . “I just can’t connect all these dots.”

Additionally, mobile technicians cannot add recommended service items like they would if a vehicle was in a store, he adds.

Roberts agrees with Gehring. But over time, he thinks dealerships will be able to charge more for tires instead of treating them as loss leaders, along with batteries and brakes, to lure customers to service departments.

“Margins on tires will improve because to turn these trucks into profit centers, that’s where you have to go,” he said. “Remember, before the iPhone, cell phone 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 is going to happen in the tire business.”

Naidoo says margins on tire installations are better for GoMobile franchisees than dealerships because they don’t have the high overhead costs associated with large physical installations. GoMobile charges $175 to balance and mount tires as well as take old tires away for recycling. It takes a technician about 45 minutes to install tires, he says.

Founded in 2018, GoMobile now has 17 franchises in 14 states and expects to double that number in 2022. Its annual gross revenue has increased an average of 18-20%, including a 45% jump due to the pandemic in 2020, according to Naidoo.

Is Naidoo concerned about dealer competition?

“Not at all,” he said. “If anything, we’re looking to partner with them for installations. We’re already working for some car dealerships.”

Ultimately, however, Roberts says dealerships still have an advantage because they offer a full range 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 bring it back to the customer,” he explains. “We bring them the best of both worlds.”

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