Continental: Truck Tyre Buyers Have Been Price Sensitive

From Continental’s perspective, sales across the EU in the truck tyre replacement market are up 29 per cent versus the same timeframe last year, with the UK figure said to be up 5.5 per cent, a few percentage points less than other estimates. Raw materials are still increasing, with the knock-on effect of pushing tyre prices up. Supply is also expected to be tight in the second half, as tyre manufacturers are struggling to meet the increase in demand (and cope with the shortage of raw materials). “We are also seeing a high level of hire vehicle utilisation which could lead to vehicle shortages towards the end of the year,” company representatives told Tyres & Accessories recently.

The pound has strengthened, which has offset some of the raw material price increases, but this brings with it an increased risk [to the premium manufacturers at least] of imports. As a result, the premium sector is still under pressure but Continental reports there has been uplift in demand for premium tyres this year in comparison to last year. Continental’s advice to hauliers is that making the move to budget tyres may prove to be a false economy in many cases.  While the upfront purchase price is less, this does not take into account the tyres whole life cost and impact on fuel consumption, tyre life and casing value. This is where premium tyres will make significant savings. And apparently this has also led to an increase in demand Conti’s second generation products. 

In general terms Continental representatives report that 2009 was “an extremely difficult year for the commercial vehicle sector with truck registrations showing a drop of 38.9 per cent versus the same period in 2008.” However, the company is said to be in an “excellent position to ensure that operators make the most out of their tyres.” The firm plans to do this by encouraging the use of a whole life cost approach – ContiLifeCycle – which reduces driving costs. The concept encourages operators to “specify the right tyre on the vehicle from day one…” with regrooving and retreading and retreading recommended where appropriate.

The Goods segment continues to be by far the largest segment in the UK accounting in 2009 for 90.3 per cent of the tyre market, construction – the second largest – at 6.1 per cent with the people segment the smallest at just 3.6 per cent of volume.

The Original Equipment division is seeing a growing demand for tyres with a higher load capacity, thanks in part to the trend towards larger and more comfortable cabins with increased safety components. Another factor is that the Euro VI legislation increases engine power which means that between Euro IV and Euro VI, there has been a substantial weight increase (approximately 400 kilos), so for tyres to continue to be compatible with new vehicles, they must be capable of running under such loads. 

Continental says it is responding to this demand by providing tyres such as the new long distance HTL 2 Eco-Plus, which in certain sizes is available in two versions, one of which has a higher load rating than the other, allowing heavier loads on the front axles.

All the pressures facing fleet operators have led to a situation where they face “extreme cost pressure,” leading to an even greater sensitivity towards tyre costs. And in addition to these macro-economically driven trends, the market is also said to be experiencing something of a shift to cross-border to transportation in line with the EU extension as well as a growing number of fleets outsourcing their tyre management.

Related News:

• Pirelli Reports ‘Surge’ in Post-Recession Truck Tyre Demand

• Bridgestone: UK Truck Tyre Market is 6-8% up on Last Year

• Michelin: Political and Economic Instability Slowed UK CV Tyre Recovery