For a dealer service department, increasing tire sales is good business, though not necessarily in direct profit from sale of the tires. “The upsell is the biggest reason why we do it. We probably make $20 on the tires. Basically, there are no profits,” except for the labor on related work, said Nestor Alvarez, service manager at Miami-based Land Rover North Dade.
As part of a “free multipoint inspection, customers visiting the dealer’s service department gets a tire tread inspection, where a technician measures and record tread depth. Customers are notified if the tires need replacing. Customers usually want to replace the tires, but the real profits come more from related jobs such as alignment, brakes, and shock absorbers. Virtually every customer who needed new tires also needed alignment, Alvarez said.
In 2012, tire sales increased 125% at the dealership to just over 1,000 tires. A companion Land Rover store, which is also part of the Warren Henry Auto Group, also more than doubled tire sales last year to around 900 units, he said. Public dealership groups have also discovered the advantages of selling more tires. They’re seeing it as a customer retention program – it’s not just about selling tires alone.