Higher and Higher
In last May’s feature on high and ultra high performance tyres, Tyres & Accessories noted the persistence of the rise in popularity for the market segment. In 2008, the trend continued apace, with some figures suggesting that the UK market share for UHP tyres was closing in on a fifth, rising from 16.9 per cent in 2007 to 19.5 per cent last year. It is fair to say that things are likely to be a little different following the financial crises experienced from the middle of 2008, though even if much of the market will be downgrading to lower performance vehicles with smaller rim sizes – as seems to be the general consensus – it is likely to be a couple of years before the market feels the changes. And while even perennially popular cars such as the Ford Focus and the Volkswagen Golf tend towards higher performance tyres, with rims not uncommonly topping 16”, perhaps there is a decent chance that the market will remain relatively stable.
In addition to the economic argument for forecasts focusing on a rise in smaller cars, ecological arguments could also play a role. At the annual Continental media brief in London in December 2008, Continental’s UK marketing director Guy Frobisher suggested that the twin pressures of the environment and the economy could lead to an increase in small cars within the car parc, creating an increase in tyres to fit 13-14” rims with speed ratings of T and H. The twin goals of lower costs and lower emissions seem sure to reduce speed ratings in the most popular tyres, at least until technology allows lower-emission vehicles to head north speed-wise. Additionally, these similar principles could be applied to the larger car market, suggested Frobisher, where there will be less need for W speed-rated tyres as SUVs dwindle in popularity, while demand for H and V tyres will experience an upward trend, when SUV drivers downgrade to regular people carriers.
Of course, all of this is based on projections well into the future, since at present few new cars of any variety are being sold. Perhaps Alistair Darling’s scrappage scheme (see page __ for more detail) will have the desired effect and boost new car sales significantly, but otherwise the original equipment market seems unlikely to see specific segment-based shifts until the financial crisis eases. Meanwhile in the replacement market, there is a chance that the increased availability of performance vehicles could allow the HP-UHP tyre market to remain high, though surely most people will be looking towards economics rather than performance.
Or will they? While it makes sense to many that the UHP market is heading south after an extended period on the rise, the latest figures on the UK market from GfK Retail and Technology comparing sales in quarter one in 2009 against quarter 1 in 2008 (pre-financial doom and gloom, remember) suggest that the market for V and WYZ speed-rated tyres is relatively stable in 16” with only a small decline shown (3.3 per cent down), while in 17” and 18” sizes, the market has actually grown by 10.6 and 17.3 per cent respectively. Confounding the popular image of drivers saying goodbye to their high performance vehicles and trading in for something smaller and more sensible, figures at present suggest that the overall market is strong.
Additionally, internal movement from WYZ to V speed ratings is more limited than one may think in the 16” category, where V-rated tyres account for 59 per cent of the segment, where last year it was 56.4 per cent. In the 17 and 18” markets, where the V rating is much less dominant, the figures display little difference; indeed in the 17” sector, V-rated tyres have sold fewer than in Q1 of 2008, accounting for 11.2 rather than 11.4 per cent of the segment. For 18” rims, V-rated tyre sales accounted for 11.8 per cent of the segment, over 8.3 per cent in 2008.
While there seems every reason, economically and environmentally, to forecast a decline in fortunes for HP and UHP tyres, the change has not happened yet, in terms of sales or market share. It is unlikely that the rise of the UHP segment will continue at the pace set in recent years, since money and climate worries are bound to persist for the foreseeable future. If a lasting change is going to come, it seems we will have to wait until new car sales stabilise to find out.
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