GfK: Indian replacement tyre market 5.5 million units

GfK has been carrying out research on car tyres in India since January 2013 and says that, although demand for passenger cars in India has fallen somewhat short of expectations this year, the replacement passenger car tyre market is thriving with robust sales reported for car and SUV tyres in the last three quarters. Car owners in the top 43 cities in India bought more than 5.5 million tyres in first nine months of the year; with the third quarter sales volume having surged by a substantial 11 per cent over the previous quarter.

According to GfK findings, more than 700,000 units were sold in September alone, taking the total market value of replacement car tyres in the first three quarters of the year to more than US$360 million.

Delhi is biggest contributing city in sales while Mumbai reflected strongest growth among large cities. The latest universe count revealed that there are around 3,000 tyre specialist shops selling passenger car tyres in these 43 cities.

Delhi, the national capital is the largest contributor to the sector with 12 per cent share in the market; followed by Mumbai, Hyderabad and Bangalore with 9 per cent, 6 per cent and 5 per cent respectively. Other major markets are Kolkata, Chandigarh, Ahmedabad and Pune. Among the top four cities, Mumbai showed the greatest growth potential in last quarter with 17 per cent increased sales. The city also reported the highest average selling price for tyres, which in quarter three reached US$ 66, compared to the national average of US$ 61 during this same period.

“The replacement market for car tyres has been growing this year, thanks to the buzz created by new product launches, consumer promotions amidst turbulent prices of domestic natural rubber, the weakening local currency and volatile economy,” highlighted Anant Jain, Account Director, GfK India.

Small tyre sizes dominant in surprisingly small market

13” tyres form the largest segment occupying more than one-third of the overall replacement tyre sales volume share due to the fact that larger selling compact hatchback vehicles commonly have tyre fitment of this size. The other growing segment is 14”—one in five tyres (20 per cent) sold this year are of this size, making it the second largest segment.

“With the increasing launch and sales of crossovers and SUVs in India, we anticipate the market to move towards larger sized tyres of 16” or more, and this is expected to drive the replacement market for the SUV category at a much higher pace in future,” said Jain. “As SUV tyres cost almost twice as much as normal passenger car tyres, this presents the potential to generate much higher revenue for manufacturers.”

Segment analysis from GfK revealed that in these top cities, one out of eight tyres sold are SUV tyres and more than 20 per cent of the turnover comes from this segment. Three-quarter of SUV tyres sold is of 15” size and the remaining are 16” or more.

“The automotive industry in India presents vast possibilities for car tyre manufacturers, as evident from the set up or expansion of manufacturing plants by the different players in the country,” commented Jain. “Looking ahead it is expected that the car tyre replacement industry shall continue to expand at steady rate, which holds an opportunity for the industry players to drive their growth story,” he concluded.