Tire rack retailers such as Wal-Mart Stores Inc., Costco Wholesale Corp., and Target Corp. are moving into the fast-food industry as consumers increasingly rely on their vehicles to commute, according to analysts.
Tire rack manufacturers are making a play for consumers who have already used their cars and need a new way to access their goods, according the analysts at IHS Automotive Research.
Tire racks have become a popular alternative for those who use their cars to commute to work, shop, and get around.
“The consumer demand for more convenience in the form of a retail space to use their vehicle is going to be huge in the next few years,” said Greg Loeffler, a managing director at I.
Loefflers Retail Group.
Tire sales in the U.S. jumped 7.6 percent in the first quarter to $1.8 billion, driven by growth in the sale of sport utility vehicles and vans, according on Tuesday.
Tire rack sales increased more than 5 percent in China, where the industry is expanding rapidly.
The retail sector is a growing area for automotive companies, according a report by research firm Euromonitor.
U.K.-based retailer Marks & Spencer has about 4,000 outlets in Britain and Europe, and has more than 1,500 outlets worldwide.
LoeFFLER said he expects the sector to expand by 25 percent to 30 percent over the next decade, which will help drive growth in retail and help the economy.
IHS Automobiles research analyst David Cawthon said the industry’s growth is driven by an increasing demand for fuel-efficient vehicles.
“It’s a big part of the industry growth, and it’s just really a good time to be in the industry,” Cawhthon told Reuters.
In the U., where auto sales are still declining, the average cost of a new car is $22,900 in the third quarter, up from $20,600 in the fourth quarter.
That’s the highest level in nearly two years, according with the U-K’s Ministry of Economy and Energy.
For consumers, that means many people have fewer disposable income to spend on new cars.
That’s also hurting sales of other vehicles, according IHS.
And that’s putting pressure on the U, where auto prices have fallen, as well.
U.S.-based Ford Motor Co. has said its 2017 sales were down 8.4 percent from the same year a year earlier.
The company said its sales in Europe were down 4.6 million units, or 13 percent, compared to the same period last year.
On the other hand, sales of the Nissan Motor Co., which is in the middle of a massive restructuring, were up 19.5 percent in Europe compared to last year, according Bloomberg data.