Report: 2010’s new car sales helped repair puncture in tyre market
Higher new vehicle registrations in 2010 helped to repair a price deflation puncture in the UK tyre and tube market in 2009. According to a new report published by Key Note, the tough economic conditions in 2009 resulted in the UK market value for tyres and tubes deflating by 8.4 per cent at manufacturers’ selling prices (msp). Their view is that a boost in new vehicle registrations in 2010 and inflationary price increases helped the apparent market undo this, growing by 12.6 per cent in 2010.
Although passenger car tyres represented the largest proportion of UK manufacturers’ sales of rubber tyres and tubes, reportedly accounting for 64.5 per cent of the total market in 2010, new pneumatic tyres for light commercial vehicles were said to have been the biggest winners in 2010, with sales rising by 67.1 per cent. New registrations of light commercial vehicles grew by 19.6 per cent in 2010 and, combined with increased sales from UK manufacturers, the apparent UK market for new rubber tyres for light commercial vehicles grew by 64.9 per cent in 2010.
UK tyre market value down 8.4 per cent in 2009
The Key Note report observes that the UK tyre market is “dominated by imports, with the People’s Republic of China (PRC) increasing its share of imports to the UK in 2010.” The view is that the “PRC is the world’s largest tyre manufacturer and its dominance is only set to increase as major tyre manufacturers invest heavily in manufacturing facilities in the coming years.”
Looking forward to 2012, it seems clear that the UK market will be affected by a raft of new EU regulations concerning improved labelling on tyres, noise reduction and improved rolling resistance. It not clear exactly why this is, but Key Note reports that “these changes should help boost the sales of new tyres as old tyres become defunct.” However, other proposed changes (such as changes to the MOT regimen) could have a negative impact on the industry.
In its conclusion Key Note completely goes against the grain of industry opinion that Tyres & Accessories has canvassed and forecasts that the overall market for the UK tyre industry should grow modestly in the short term, a reflection of the forecast slowdown in car registrations but improved light commercial vehicle registrations. Most other sources predict that both sell-in and sell-out sales for 2011 will be down by between 9 and 16 per cent.
Finally, Key Note suggests that continued increases in the price of synthetic rubber and oil will result in price increases being passed to the customer.
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