NTDA/Lanxess report: More budget tyres sold post labelling

Following on from the headline news that Lanxess/NTDA published at report detailing a UK retail perspective on 16 October, Tyres & Accessories is now publishing further details and discussion of the complete report . The initial findings were that the tyre labelling has so far been something of a “missed opportunity” for the tyre business at large. However, the Lanxess/NTDA data, which came a day after Goodyear Dunlop’s own “one year on” report, also contradicted earlier findings about the impact and influence of tyre labelling on consumers.

What does seem to be clear is that, while many suggested tyre labelling would make a difference to the proportion of premium tyres purchased, it doesn’t seem have been in the direction that some expected. Indeed, according the Lanxess/NTDA report, this survey suggests “the introduction of tyre labelling has had little impact on consumer purchasing behavior and few consumers have knowledge about the label or the benefits of higher category tyres” – words that stand in complete contrast to the earlier Goodyear report.

However, rather than improving sales of premium tyres GfK figures compiled for the NTDA and published in the Lanxess report suggest that budget tyre sales are the ones that have actually gone up and therefore could be said to have benefitted from labelling in the UK at least: “whilst budget tyres accounted for 41.1 per cent of market share in the July to September 2012 period when the label was introduced, their market share had risen to 45.4 per cent in the period April to June 2013, with total sales of both premium and value tyres falling.”

In the conclusions of its research, the Lanxess/NTDA report presents feedback from the survey highlighting several potential reasons for tyre labelling impact being less than expected. At the core of this is the suggestion that consumers themselves prioritise up-front costs highly, echoing the words of Hyundai executive Stephen Stacey in the earlier Goodyear Dunlop roundtable. However, 2012 research from the SMMT suggests this doesn’t mean consumers are averse to green motoring, rather that they are most interested when it helps their wallets. In order to illustrate the point consider this: in the five years before 2012 sales of low emission vehicles jumped from 10.6 per cent to 55 per cent.

The conclusion the Lanxess/NTDA report draws on this is that “the market share of premium and budget tyres would suggest that retailers are not advising customers to go for premium, higher-category tyres”. This is perhaps because there is some skepticism amongst retailers as to the extent to which labels accurately communicate benefits (or otherwise) to consumers. One respondent told researchers: “tyres need to be sent away for independent testing before industry takes it seriously”.

As interesting as it is to read the retail level research, again it is clear that this data doesn’t present the whole picture or indeed every perspective. What is missing this time round are answers to why consumers aren’t asking for information (are they as aware of the label as the Goodyear Dunlop data would seem to suggest?) or how many dealers are actually communicating label details during the sales process (initial research last year suggested compliance was very low). However, this can’t be read as a criticism of this research per se because it methodology was clear and it was only directed at the retailers themselves, which is unlikely to result in some dealers technically incriminating themselves when it comes to questions of compliance even if such questions were asked.

So, once again, we need another perspective this time coming from the consumer point of view.

 Lanxess/NTDA research key facts:

• 93 per cent or respondents said customers never or only occasionally require information on the EU label

• For 74 per cent of tyre customers price is the “most important factor”

• 80 per cent of respondents said customers mostly follow their advice.

• Only 5 per cent said customers never follow their advice

• Posters (32 per cent), internet site (25 per cent) and leaflets (19 per cent) were said to be the most popular suggestions for improving tyre labelling information at the point of sale

• 71 per cent of respondents said customers mostly purchase tyres after collecting the information they want