New UK tyre market report published

Market research publisher Bharat books has released a new report on the UK tyre market. Introducing the new product, the company contexualises the research against the backdrop of “anticipated growth in the UK automotive industry and expansion in the overall automotive fleet”, saying these markets are “expected to boost tyre demand in the United Kingdom”. Without giving any further details, the publisher suggest that there are “growing online sales of replacement tyres” and “rising demand for retreaded tyres, especially in commercial vehicles”.

As far as tyre manufacturers are concerned the report covers firms such as Michelin, Goodyear Dunlop, Pirelli, Bridgestone and Continental – pointing out that these have at some stage had manufacturing connections to the UK. However, while saying these companies “have plans to expand production capacity of existing plants” is not wrong in general, saying they are “keenly eyeing opportunities unfolding in the UK tyre market” is something of an exaggeration.

On the OE side of things Bharat Books points to car makers like Nissan and Honda as examples of future growth potential. However, one of Britain’s largest and globally most successful OEMs – Jaguar Landrover – is not mentioned in the publicity material and is therefore noticeable by its absence.

“United Kingdom Tyre Market Forecast & Opportunities, 2019”, loftily estimates UK tyre market demand at US$5 billion (£3.1 billion; 3.986 billion euros) in 2014 – beyond even the highest replacement market estimates T&A has heard. For this to be correct it would mean the average car tyre would be £88 (£3.1 billion/35 million tyres). If this figure refers to the combined car, truck, retreading, OTR, motorbike and speciality tyres segments it would surely be more.

The report continues by suggesting that 80 per cent of the total tyre demand in the country is passenger car orientated (which may be roughly true in unit volume, but is certainly not true in terms of value) followed by commercial vehicle, two-wheeler and off the road (OTR) tyre segments. Again a little more clarity would not go amiss.

The report goes on to suggest that demand for replacement tyres in the UK is substantially higher than OEM tyre demand, with the latter segment accounting for merely 20 per cent volume share of the total market, which is interesting to note. As is the suggestion that “tyre demand in the UK is mainly concentrated in England, which accounts for more than 85 per cent of the overall tyre demand in the region”. Similarly, saying “Greater London, owing to its expanding population and large vehicle fleet size, is the epicentre of tyre demand in the UK” is also intriguing, if unqualified.

However, the fact that the “companies covered” list is dominated by premium and high-mid-range competitors is a significant oversight. A market such as the UK requires good coverage from across the board owing to fact that anywhere between 50 and 56 per cent of unit volumes (depending on who you ask) are made up of budget tyre sales. With this in mind, the lack of coverage of large-scale upper budget and mid-range players (such as Giti and Nexen, who could easily claim 15 per cent market share between) is another significant oversight.