ETRMA on 1Q tyre demand – all sectors down

Following a slow year in 2012, the European Tyre and Rubber Manufacturers’ Association (ETRMA) has published first quarter 2013 figures showing that the decline has continued.

According to the association, which represents the European operations of some of the largest tyre manufacturers in the world, the market for consumer tyres fell 12 per cent (to 46.6 million units) in the first quarter. This is said to have been because of, amongst other factors, bad weather conditions, delay of the change from winter to summer tyres, and not least the current economic environment.

The truck tyre market remained on the low level of the previous year, reportedly a one per cent decline. However, considering that this sector has borne the brunt of falling decline in recent years, the fact that is now virtually stable is positive. In fact, without being unduly optimistic, it could suggest that this sector has ‘bottomed out’, as some leading manufacturers have reported.

Meanwhile agricultural tyre was down 8 per cent and motorcycle tyre sales fell 13 per cent. In the case of all these figures the percentages refer to totals that were already low and had showed evidence of softening for some time, making these marked declines all the more significant.

On a brighter note, ETRMA reports that the industry expects something of a summer tyre recovering in the coming months as this sector performs “slightly above last year”.

Source:ETRMA

While ETRMA offered its own general reasons for the decline it is clear that these factors do no cover all explanations and cannot be evenly transferred across all sectors. When compared with other third party market research what can clearly be seen is that sell out statistics such as ETRMA’s are markedly more in decline than sell-out data. So while, the market itself is not buying as many tyres, this does not conclusively demonstrate that fewer tyres are being bought by consumers and end users. Indeed this can be explained by de-stocking effects that see retailers opt to sell-out their inventories rather than order in new stock. This is further complicated by fact that, in the passenger car sector at least, consumers are running their tyres beyond legal limits. And, in addition, when it comes to purchase time consumers are continuing to de-segment, replacing existing products with less expensive ones. On top of all this, petrol sales and government data suggest that fewer miles are being driven. And this is further obscured by relatively high levels of part worn sales.