Thinking of Buying a Tyre Shop Business in Australia? Here Are 3 Vital Questions to Ask
The Australian tyre retailing industry generated $7.9 billion in revenue in 2024–25, supported by demand from 27.1 million residents and a growing vehicle fleet. Despite this scale, the sector is under pressure from online tyre sales, cost-of-living constraints, and global rubber price volatility.
Industry profit margins currently average 5.5% and are forecast to remain stable as businesses pass higher costs on to consumers. Revenue is expected to grow moderately at 0.9% annually over the next five years, reaching $8.3 billion by 2029–30.
1. Is the Business Financially Resilient in a Competitive Market?
Why It Matters
Tyre shops face strong price competition, with online retailers like Tyresales.com.au and service centres eroding traditional retail margins. The closure of major chains such as Beaurepaires highlights the financial pressure on established operators.
What to Check
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Profit margins – Compare against the industry average of 5.5%.
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Revenue mix – Passenger tyres make up 52.3% of sales, with growing demand in commercial and fleet sectors.
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Supplier arrangements – Review sourcing strategies, especially given reliance on imports.
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Overheads – Assess rent, labour, and technology investments in digital booking or online sales.
2. Does the Location Provide a Competitive Edge?
Why It Matters
Victoria now accounts for 28.8% of tyre retailers, overtaking NSW and QLD, largely due to deteriorating road conditions that accelerate tyre wear. Shops in high-traffic, logistics, or mining regions typically outperform urban areas with strong public transport.
What to Check
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Catchment area – Analyse local vehicle registrations, transport corridors, and road conditions.
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Market saturation – Consider nearby competitors and online substitution.
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Customer mix – Determine whether trade comes primarily from households, commercial fleets, or mining clients.
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Growth drivers – Evaluate demand linked to ecommerce delivery, construction activity, and mining expansion.
3. Is the Business Positioned for Future Trends?
Why It Matters
Consumer behaviour is shifting towards online convenience and sustainable tyre products. Subscription services, eco-friendly materials, and mobile tyre fitting are expected to reshape the sector. Businesses that fail to adapt risk being left behind.
What to Check
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Digital readiness – Does the business have an online booking or ecommerce platform?
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Value-added services – Look for mechanical add-ons like alignments, balancing, and warranties.
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Sustainability – Assess tyre disposal practices and eco-friendly product offerings.
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Fleet relationships – Explore contracts with logistics, taxi, and rideshare operators.
Ready to Invest in a Thriving Tyre Shop Business?
With steady demand from Australia’s growing vehicle fleet and opportunities in commercial and fleet servicing, tyre retailing remains a resilient industry.
Success will depend on competitive positioning, strong supplier relationships, and the ability to innovate with online platforms and sustainable practices.
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