The increasingly all-season SUV tyre market: Budget share grows in premium-dominated segment

SUV and 4×4 tyres have stood out as a high growth, high margin sales opportunity for several years. Latterly, the growth of both all-season and EV-specific fitments has only served to strengthen the niche value of the segment. As we look forward into 2024, Tyres & Accessories takes a look at the latest data from market research specialists GfK in a bid to reflect on what has happened in the last year as well as to prepare for what might come in the next 12 months.

GfK’s UK 4×4 and SUV tyre panelmarket data compares the period from January 2022 to September 2022 with January to September 2023. At various points in our analysis, we also compare that data with findings from the roughly prior period (that is from January to December 2021 compared with January to December 2022).

Helpfully, the GfK data follows a similar format to previous years, which really helps with longer-term comparisons. The first column shows the percentage growth of the UK 4×4/SUV panelmarket in terms of both value and volume during the last 12 months, followed by the same measurement split out by “all sizes” and the greater-than-or-equal-to 19-inch rim diameters to illustrate movement in the higher performance end of the 4×4/SUV panelmarket.

This time round, the data shows that, while the volume of the market has shrunk by 1 per cent, the value of the market has grown 9 per cent. The only explanation for that disparity is price increases. Both the decline in overall volumes and the impact of price increases were very much expected. However, the trends are more surprising at the top end of the panelmarket.

In the greater-than-or-equal-to 19-inch rim diameter sub-section of the 4×4/SUV panelmarket, unit sales went up 4 per cent and values shot up 15 per cent – completely bucking the trend seen in the overall market. That, in turn, suggests two things. First, the continued growth of the high-performance end of the 4×4/SUV tyre market combined with overall price increases is supporting the 4×4 part of the UK tyre sell-out business. And secondly, the sale of 4×4 and SUV tyres continued to offer a high-value business opportunity during 2023.

Mid-range squeeze continues

When the overall 4×4/SUV panelmarket data is broken down by brand tier, the general shape looks familiar. However, while the premium share remains 49 per cent, there has been a faster-than-expected contraction of the mid-range brands. For most previous years, the mid-range sector has held firm or contracted by 1 percentage point. This year, mid-range share is down 2 percentage points to 26 per cent.

Budget brands were the beneficiaries with their share up two percentage points to 25 per cent. To put that into context, in the aforementioned 2022 to 2021 data, budget SUV and 4×4 tyres occupied 23 per cent. But that figure itself represented a 1 percentage point increase on the prior year. In other words, budget 4×4 and SUV share has been growing for the last two or three years and its current rate of growth is as fast as it has been for a while.

When brand tier share is restricted to 19-inch plus products, it is quite a different story. Firstly, premium share is down one percentage point rather than stable as it is in the mass-market, but still a dominant 68 per cent. Secondly, mid-range tyres are stable at 19 per cent. And finally, budget share is up one percentage point to 13 per cent. Nevertheless, while high-performance 4×4 and SUV tyres undeniably remain the bastion of premium brands and high-margin products, there’s no denying that the market share growth of budget brands seen in the overall 4×4 and SUV tyre segment is also evident at the top of the market. And that trend suggests that competition in this historically price-secure sector could be about to heat up in 2024.

An increasingly all-season segment

Previous years have seen growth in the all-season make-up of the premium end of the SUV and 4×4 tyre segment. The latest data suggests that trend is an across-the-board phenomenon.

Indeed, the value of SUV and 4×4 tyres in GfK’s UK panelmarket went up a huge 17 per cent in the period. Meanwhile, unit sales also grew 7 per cent in the period. Growth was even stronger still in the greater-than 19-inch sub-sector. Here, sales of all-season SUV and 4×4 tyres shot up 22 per cent in terms of value and also registered double-digit growth in terms of unit sales (+11 per cent).

And therefore, what we have seen hinted at in previous years is now an unavoidable trajectory – SUV and 4×4 tyres are fast becoming an all-season market.

225/55 R18 an increasingly important size

When you look at the segment through the prism of the top 5 4×4 and SUV tyre sizes, the role of the market-leading 235/60 R18 remains. During 2023 it commanded 6 per cent of the segment. But that figure is down 1 percentage point from the 7 per cent share it had the last time we looked at the market.

235/55 R19 remains stable in second-place on 5 per cent segment share.

In third place, 215/60 R16 grew in prominence with a 5 per cent segment share in the 2023 share compared, up 1 percentage point from 4 per cent the last time we looked at it.

Meanwhile, 215/55 R18, which was the fourth most popular size last year holding a 4 per cent share of the segment, has fallen out of the top five during the course of 2023. It has been replaced by 225/55 R18, which is a new entrant into the top five. Since 225/55 R18 already holds a 4 per cent share of the segment, it is technically the joint-third most popular 4×4 and SUV tyre size. And therefore, it is an increasingly important size in the segment.

For the second year in-a-row 235/50 R19 rounds off the list of the top five 4×4 and SUV tyre sizes, static on 3 per cent share of the segment.

Overall, the SUV and 4×4 tyre panelmarket data shows that many of the long-term trends remain same. Notably, the market is a dominantly high-performance and premium market, which means it is a comfortable home for high-value products. That position continues to be reinforced by the increasingly widespread adoption of all-season SUV and 4×4 tyres. However, at the same time, the mass-market mid-range brands continue to be the squeezed middle and the budget brands are beginning to win some segment share at the cost of the dominant premium brands.