Budget tier tyres continue to gain ground in UK car tyre market – GfK

Overall number of tyres sold continues to flatline, though sell-out ‘panelmarket’ data also shows that higher rim sizes and all-season tyres remain areas of growth

The UK is nearing half a decade removed from general economic conditions resembling normality, four years since Brexit was (arguably) completed, nearly the same amount of time since the start of the Covid-19 novel coronavirus pandemic, heralding the world’s descent into an age of militarisation, and the continual flux of UK politics. Tyres & Accessories’ regular February Car Tyre feature has presented an overview charting the progress of the car tyre market over these years – readers can now access the preceding years’ issues in the T&A digital archive, hosted by Tyrepress. While change has remained reassuringly slow compared to the economic and political context, the latest panelmarket data from market analyst GfK – which uses point of sales tracking of sell-out tyres to produce an overall picture of the whole replacement market in the calendar year 2023 – demonstrates the ship-like progress of various trends since the relatively major disruption of 2020.

In year-on-year data measured against 2022, overall tyre units remained flat at -0.3 per cent, which is the same result as 2022 versus 2021. Meanwhile, the value of the market continued to rise at +7.0 per cent, an inevitable result that is partly due to price increases and also due to the UK car parc’s long-established trend towards larger rim sizes and higher value products, such as all-season tyres. The graphic on these pages, supplied by GfK demonstrates the proportional sizes of various segments within the UK market, as well as the latest growth in each of these segments (presented in parentheses).

Budget tier continues to march forwards

The Budget replacement tyre tier continues to strengthen in 2023 versus 2022, with the overall proportion of Budget tier tyres growing 2 per cent, as it had done in 2022. As T&A noted last year, annual changes are often in the order of a single percentage point either way, so this +2 per cent increase in units sold by Budget tier brands represents a strong indicator that the segment continues to rise. This pace of change can be attributed to a few different factors. Budget tyres imported from various sources across Asia became highly cost-effective versus products sourced from European factories. Twin factors were at play in making this happen: the cost of shipping containers remained very low for much of 2023 – a trend that is currently seeing some headwinds due to the attacks on commercial shipping by Houthi rebels from Yemen; and the Ukraine war causing elevated energy costs in Europe – another trend that appears to be in reverse in 2024 as energy markets stabilise at a lower rate.

There is another reason to think that the trend towards car tyre imports in Europe may be in reverse: the establishment of new manufacturing footprints within the continent, usually in the east or in central Europe, by some of China’s largest tyre-makers, such as Linglong’s Serbia plant. This trend may actually lead to continuing strong growth in GfK’s Budget segment, where these tyre brands are categorised, since they will become even more accessible. The technology and globalisation of these manufacturers is also improving, meaning they are increasingly likely to affect the higher-value segments like higher rim diameter tyres and all-season tyres.

Again in terms of units sold, the 2023 brand tier split in the UK replacement tyre market is 33:22:45 (Premium:Mid Range:Budget) according to GfK data, with both the Mid Range and Premium tiers receding by -1 per cent. If we look back to 2019, this ratio was 35:25:40, demonstrating that the UK has become much more partial to Budget tyres in the post-Brexit, post-Covid era. The value of all car tyres in the same period has continued to rise, +7 per cent in 2023 v 2022, indicating rising prices across the brand segments.

High rim diameter tyres

Continental SportContact 7’s size range typifies trending demand for HRD, performance tyres in the UK (Photo: Continental)

Separating the higher rim diameter (HRD) tyres from the rest of the market reveals the extent to which Budget products are also eating into the advantage enjoyed by the premium tiers. The Budget segment was up +1 per cent year-on-year in 2023, with the premium segment -1 per cent and the Mid Range flat. This made the ratio 47:19:34, showing that Premium tyres continue to hold a strong position in higher value products. Motorists driving premium cars and SUVs are much more likely to be brand conscious (or at least able to indulge that brand-consciousness through retail purchases). As well as the size of these drivers’ wallets, Premium tyre manufacturers have dominated the availability of these dimensions, especially in more bespoke sizes used by original equipment manufacturers and their OE tyre supply partners. The replacement market is becoming better stocked with a variety of brands offering an increasing number of HRD sizes.

The longer-term gains of the Budget segment in HRD tyres can be demonstrated via the ratios in 2019. 50 per cent of 17”-plus sized tyres were Premium, 22 per cent Mid Range, and 28 per cent Budget. In 2023 v 2022 figures, the value of this segment is +12 per cent, with units up +4 per cent. This indicates that the segment is getting larger – more cars are running on rims of 17”-plus. In fact, this segment represented a 53 per cent share of the market in 2023, up +2 per cent versus 2022. It also shows that there is continued growth in the upper end of the segment, where the tyres are of the highest value, since value growth continues to outstrip units growth.

In the overall replacement market the Budget tier dominated with 43 per cent, against 23 per cent (-1 per cent) Value/Mid Range and 34 per cent (-1 per cent) Premium tyre unit sales. (GfK says it bases its categorisation of tyre brands on ETRMA lists, meaning the Premium tier comprises six players well established in this segment.) Meanwhile, further signs of Budget tier brands increasing their toe-hold in the UK replacement tyre market are evidenced by similar growth figures in the faster-growing 17”-plus segment. Budget accounted for 33 per cent of units sold versus 19 per cent and 48 per cent for Value/Mid Range and Premium tiers respectively – the rates of change were the same as the overall market picture.

Applications: all-season remains strong

Demand for all-season tyres has remained strong throughout this period of strong economic headwinds. In 2023 unit sales grew +4 per cent, a long way ahead of the small -0.3 per cent contraction in the UK market as a whole, while the value of the market also beat the overall picture, +12 per cent ahead of 2022. The segment has seen plenty of innovation over the past decade or so , since the mini-revolution in all-season technology heralded by Michelin’s CrossClimate line, the original of which was recently superseded by a second-generation that demonstrated further impressive performance gains. Premium and sub-premium brands have also innovated to supply a vibrant top-end in the all-season tyre sector. Acceptance of the product category, previously derided as a halfway house that offered too many compromises in performance, has grown quickly and independent tyre testers have been increasingly impressed with the standard. OEMs frequently offer an all-season fitment on new models, demonstrating their acceptance of the product.

The growth of SUVs, now a double-digit proportion of the UK market, has also helped to sustain increased interest in all-season tyres, with drivers demanding cold-weather grip from this segment, especially in four-wheel-drive models. SUV tyres are regularly produced as all-season options to ensure this is delivered in the colder months of the year.

The UK’s mild, inclement, island climate offers a particularly strong argument for all-season tyres, especially versus a winter tyre market that has flatlined, other than a few niches in particular mountainous regions – we can see from GfK’s data that the value and units growth in the UK winter tyre market have continued to decline in 2023.  With more manufacturers investing in the technology required to produce tyres with a higher window of optimal operating temperatures, the all-season tyre segment looks set to continue growing in the UK.

The Prinx brand is bringing a complete range of products for the current and future European car parc, demonstrating the arrival of increasingly quality tyres from Asian brands (Photo: Prinx)