Report: Leading UK Tyre Companies Face Tough Times

A new report has found that the UK’s largest 50 tyre companies now control 94 per cent of the market, an increase from 90 per cent 2 years ago. As a result, these major companies are said to be “fighting each other headlong in a battle for market share.”

The report, produced by Plimsoll Publishing, found that these levels of competitiveness are having an effect on the financial stability of some businesses. Of the 50 Tyre Manufacturers & Distributors companies surveyed: 15 of the companies are showing no sales increases at all; 13 are selling less than they were 2 years ago; 26 companies have failed to increase sales at the same rate as their investment; and 26 companies increased their debts simply to hold their place in the market.

David Pattison, senior analyst with Plimsoll, comments: “The recent slow down in the UK economy will only accelerate a long standing problem in the market. Following the last few years which have been largely profitable, business leaders have been keen to invest heavily, and in turn have borrowed heavily. Yet due to the turbulent economic climate of 2008 they are seeing very little by way of return. This ambitious investment strategy has left some companies in severe financial danger, and as a result 13 companies have been awarded a danger rating in this study as result of their failing business strategy.”

Pattison continues “It’s likely that the management at some of these companies could be changed to accelerate the cutback process, as it’s a lot easier for new managers to come in with a clear remit and instigate these tough decisions. The other obvious option is that some of these businesses will be sold off.”

Supporting the opinion for a sell off, the full 136 paged analyses suggests that the value of these 50 companies has fallen by around 40 per cent in the last 12 months. Plimsoll’s report identifies the companies who are prime potential acquisition targets.

The complete analysis is available for £500 by calling Clair Sherwood on 01642 626422 or emailing c.sherwood@plimsoll.co.uk. Tyres & Accessories readers can get a £100 discount when quoting PR05.