UK replacement tyre market unchanged - Conti

The market for replacement tyres in the UK is likely to be unchanged from last year, according to data from Continental. Guy Frobisher, sales director for the company told journalists that Conti expects the total replacement market in the UK to be 30.5 million units in 2008, just half a percentage point above the 2007 figure. 

He said that the strength of the Euro against Sterling had strongly discouraged grey imports from other EU countries, and this had artificially increased the numbers tracked by the ETRMA, especially in the first half of the year. ETRMA members do not track premium brand tyres coming into the UK, unless they arrive through the brand-owner's official channels. Thus they all reported strong growth in sales for the first half.

Numbers in the second half were much weaker, however, and the UK will end up with total replacement demand at a simlar level to last year. 

David Smith, managing director of Conti UK said it was almost impossible to predict the sales figures for 2009, saying, “2009 will be a tough year, but I do not think it will be a disaster.”

He said people will continue to drive their cars. He noted that there is some discretionary travelling, but people still need to drive to work. 

He said that while some people will lose jobs and lose out financially, the vast majority will continue in work, and nothing much will change for them, except they wil see an increase in disposable income as a result of falling fuel prices, lower interest rates and lower prices in the shops.  

Smith said Conti, in common with other premium manufacturers focusses on cars and light trucks which are relatively recent - up to five or six years old. He said drivers of these relatively new vehicles tend to fit premium tyres. Drivers of older vehicles will fit  mid-trange yres, while for vehicles older then eight to ten years, the drivers tend to have less spare money and do not perceive such value on the vehicle, so they will often fit budget tyres. 

Smith said Conti has seen no evidence of any trend toward owners fitting mid-range tyres on newer vehicles, or other trends toward cost-cutting. He said Conti has a watching brief in case such developments should emerge in the coming year, but so far there is no evidence of such movements.

Frobisher noted that the trend toward larger tyre sizes is continuing. He said 18- and 19-inch tyres now hold a combined share of 19 percent of the UK market, while the 225/45/17 W tyre is now in 5th position in the UK popularity table, having only arrived in the top 10 in 2006, on the back of increased OE fitments.

Frobisher said that in the 4x4 segment, the top-10 most popular sizes now include a 20-inch rim, although the 16-inch sizes are still 50 percent of the market. 

He said sales of large 4x4 vehicles have declined, and this is likely to lead to a reduction in these larger diameter tyre sales over time. 

Frobisher went on to say that as legislation and cultural attitudes drive sales of eco-friendly cars, Conti expects sales of 13- and 14-inch rims in lower speed ratings to recover. 

Frobisher said the speed rating is more often used as a measure of the strength and robustness of the tyre, rather than an actual speed rating. So even though a heavy vehicle might never reach the rated maximum speed, it quite often has a higher speed rating that strictly necessary, because of the vehicle weight and the demands placed on the tyre when manouvering at speed and when heavily loaded. 

If eco-friendly cars become more popular, then they are likely to be less powerful and lighter in weight, which will reduce the requirement to have high speed-rated tyres. 

Smith said the market is likely to see an increase in tyres in 19- and 20-inch rim diameters as Chinese tyre makers realise that these are lucrative markets However, he added, the tyres wil not be as good as the tyres manufactured in cooperation with OE car makers. 

Any tyre maker which spends the time and investment to make tyres for OE will produce tyres more focussed on the needs of modern drivers, he added. 

Thus, even though historically, the 13- and 14-inch markets in T- and H-speed ratings have been dominated by low-cost imports, these still tend to be fitted to older vehicles. 

If, over the coming five years, the OE car makers switch to lower powered vehicles, they will demand outstanding fuel economy and excellent wet grip, low weight and other characteristics from their tyre suppliers. Conti he said, is committed to providing these technologies. Thus, even though Conti will begin competing in markets which have historically become commoditised, these tyres will not be commodity tyres, he suggested. 

He said UK consumers are smart enough to realise that premium branded tyres offer benefits in terms of safety, security and economy over their budget rivals. 'It is a question of ediucation,” he addded, saying that Coti has to get its message across.