All Change in UK Commercial Vehicle Tyre Market 2009

In 2009 Bridgestone and Michelin remained relatively stable market leaders in the UK commercial vehicle tyre market. However a real turnaround has taken place in the rest of the top five. According to Tyres & Accessories’ research, the recession has resulted in traditional truck and bus tyre market stalwarts Goodyear Dunlop and Continental being leapfrogged by relative newcomers Hankook, which now resides in third place with a 20 per cent market share.

While Continental didn’t explicitly confirm all the details of T&A/tyrepress.com’s research at its annual market trends briefing in London on 11 December, a spokesperson did concede that the company had slipped to fourth place in 2009 (holding 15 per cent of the market), after its group brands occupied third position in 2008: “We reached third position in 2008, but the challenging economic conditions mean that we are currently fourth in the market with an aim to regain ground in the next three years.”

T&A/tyrepress.com’s figures put Bridgestone in first place with up to 26 per cent, a hair’s breadth ahead of Michelin (25 per cent). As we have already seen, Hankook now have a secure footing in third place with sales equating to a fifth of the new truck and bus tyre market. Following Continental in fourth place, 2009’s fastest decline saw Goodyear Dunlop drop to fifth place with a 9 per cent market share. A Goodyear Dunlop spokesperson simply confirmed that the company does not hold the third place and 20 per cent share it did in 2007: “After our separation of the TruckForce and HiQ businesses in 2007, we took steps to exit unprofitable accounts to focus on sustainable, long-term growth with partners where we could deliver our full service package.”

At Conti’s briefing, the premium tyre manufacturer confirmed that a significant de-segmentation effect and an overall drop in new tyre volumes was responsible for the truck tyre market turbulence, with purchasers switching to lower value and often lower performing products. “The premium sector has been under a lot of pressure in 2009 and has lost ground to quality and budget brands. In the UK this year, Continental estimates that the premium segment will account for 45 per cent of the market; the quality segment the next biggest group at 30 per cent, the budget segment 21 per cent and the sub-budget segment 4 per cent,” commercial product marketing manager Jill Rodgers told journalists.

Conti’s market data shows the UK new replacement tyre market totalled 871,300 units in October, compared with 1,051,800 units at the same point in 2008, a drop of 17.2 per cent.  However, Continental projected 2009 year end figures would rise to approximately 990,000 units.

Turning to budget tyres ‘false economy’

So how are the leading tyre makers that have obviously lost share to cheaper products going to fight back? Continental representatives warned that turning to budget tyres will prove to be false economy for many operators, arguing that while the upfront purchase price might be less, it doesn’t take into account the tyre’s whole life cost and the impact premium tyres have on fuel consumption.

For its part Continental is releasing another raft of “second generation” sizes, with what it says are market leading rolling resistance characteristics. One notable example is the HSW2 295/80R22.5, the company’s first dedicated coach tyre.

While it’s difficult to predict how the market will look in 2010, with such a significant switch in volume and value taking place in the market, it is clear those that gained in 2009 will be fighting to hold onto their position, while those that lost will be desperate to get what they need back again. Continental believes the premium segment will grow by two percentage points to 47 per cent; quality will drop two more points to 28 per cent, with budget and sub-budget remaining the same, at 21 and 4 per cent respectively.

Size matters

Size wise, although 295/80 tyres still dominate the UK market, there is continuing growth in 315/80 tyres. This is said to be due both to changes in vehicle design and the increase in the number of European hauliers operating in the UK. Continental is also experiencing a growing demand for tyres with a higher load capacity, as the trend continues towards larger and more comfortable cabins with increased safety components. The substantial weight increase (approximately 400kgs), between Euro IV and Euro VI for the inclusion of adblue tanks has also had an impact.

Another developing trend in the OE market is the use of double-deck high volume trailers using low profile 17.5 and 19.5-inch tyre sizes, such as 215/75R17.5 and 445/45R19.5. These trailers help improve supply chain efficiencies, by reducing the number of vehicles in operation.

Speaking of efficiency, Continental’s data puts the combined UK and Irish retread market accounts at 960,000 units in 2009. For more truck tyre market data search for this article at tyrepress.com.

Highlights from Continental’s 2009 Market Trends Briefing: