Increased affluence and the rise of car ownership is creating demand for passenger car tyres in Malaysia’s booming central region. The latest GfK retail audit report shows that sales of passenger car tyres in the high traffic states of Kuala Lumpur and Selangor have been rising consecutively in the last two years, with the first quarter of this year reporting a surge of 14.6 per cent over the same period in 2012.
The UK tyre industry has been taking deliberate steps to develop its fledgling winter tyre market for more almost a decade. Over the years improvements have accelerated with the passing of time. Now, new research produced by market analysts GfK suggest sales are accelerating faster than ever.
Anyone aware of the continued economic fug across the continent might have expected the news that UK and Europe-wide 4×4/SUV tyre markets were depressed in 2012; what you may not have so readily expected was that the macro-trend of increasing sales of V, W, X and Y speed rated SUV tyres would have continued to grow. Yet the latest data from UK market researcher GfK, read in the context of Europool and ETRMA figures, shows that this is exactly what happened during the last year, with more powerful road oriented models continuing to prove popular.
However depressed the market feels to suppliers and despite the legitimate complaints of tough times from the retail sector, the overall UK tyre replacement sales situation in terms of unit sales is actually getting marginally better. According to the latest passenger car tyre sell-out sales data for the first nine months of 2012, compiled by leading international market research firm GfK, things are far from rosy, but there is light at the end of the tunnel.
Market research firm GfK Asia has released a report on the performance of four emerging Southeast Asian tyre markets in the first quarter of 2012; the company found that demand for replacement tyres in the countries investigated – Indonesia, Malaysia, Philippines and Thailand – increased 14 per cent between January and March in comparison with the October to December 2011 quarter. According to GfK’s retail tracking of replacement passenger car tyres across a number of cities within the four countries, some 2,557,600 tyres were replaced in the first three months of the year.
Many in the industry will be familiar with the work of GfK within the tyre market, producing regular reports on market size, market shares and trends, among other information. According to the old saying, "knowledge is power" and GfK (which stands for 'Growth from Knowledge') describes itself as 'a knowledge provider' and has been collecting, processing and analysing data on various markets since its foundation in 1937.
With South Korean replacement car tyre sales of over 8.6 million units worth US$800.9 billion last year, the replacement tyre business joins the rest of the automotive industry in being a major part of the entire local economy. According to GfK’s automotive retail audit sales in second half of the year climbed 15 per cent over first half and nearly 30 per cent compared to the same period in 2009.
New research suggests that Thailand is home to some 3,200 tyre shops. And what’s more roughly 50 per cent of fast fits are based in the Thai capital of Bangkok. According to research, which was conducted by well known market data analysts GfK, the automotive industry is on a roll, particularly in Thailand, which recorded a 47-month high of domestic automobile sales last November.
In response GfK recently launched its automotive business in Thailand, tracking sales of replacement passenger car tyres and batteries. According to GfK’s latest findings, while tyre specialists are “uniformly spread out across the country,” fast fit outlets make up a third of all shops and are more commonly found in Bangkok area where demand tends to be higher compared to the other regions.
The latest market data released by GfK suggests Malaysia's passenger car tyre business recorded sales of over US$78 million during the fourth quarter of 2010. The analysts also reported increased popularity of American and European tyres in the market.
"It is not unusual for quarter four to register stronger demands as major festivities like Hari Raya, Christmas and school holidays all take place during the last few months of the year," commented Jennifer Chan, general manager of GfK Malaysia. "In preparation for heavier usage of their cars for visitations and long drives, car owners tend to send their vehicles for their due servicing which includes replacing their worn out tyres, around this period of time."
As the Asian region’s car parc continues to swell in the wake of economic recovery, the demand for aftermarket products and services is also said to be increasing. GfK Asia, which conducts retail audits in the automotive aftermarket in major Asian cities like Bangkok, Kuala Lumpur, Jakarta, Manila and Seoul, recently looked into the relationship between car “populations” in these cities relative to the number tyre servicing garages and compared the saturation levels in differing economies. While each tyre servicing garage in developing cities such as Kuala Lumpur, Bangkok, Jakarta and Manila serviced an average of 2250 vehicles, this figure is almost halved, at 1172:1 in a “developed” city such as Seoul. The Malaysian figure is almost four times the 674:1 average ratio GfK published in April 2009.
A GfK Indonesia retail audit, covering the area of Jakarta and Surabaya, of passenger car tyres in July 2009 reported close to 110,000 units of car tyres traded in retail level, with sales worth more than $6.75 million. According to the retail census, there are currently a total of 435 shops retailing car tyres which consist of: 300 Car Tyre Specialists, 110 Car Garages and 25 Fast Fitters. Car Tyre Specialists made up the bulk of the passenger car tyre retail sales with 85 per cent of units sold through this core channel. These results clearly show consumers’ preference to “specialised” shops when replacing tyres.
With more vehicles per capita than our European counterparts, some people have romantically described the UK as a nation of car lovers. However, according to a survey carried out by GfK NOP in conjunction with Nationwide Autocentre, it appears that Britain’s love affair with cars is dwindling, with nearly 30 per cent of men and 20 per cent of women now actually resenting their vehicles.
Rising fuel costs and road tax (74 and 53% respectively) were cited as the main reason for the ill feeling. However, those in the tyre industry will be interested to hear learn that 39 per cent of motorists resent their car due to its environmental impact more than even the congestion charge. In addition to the growing trend towards smaller new car sizes, it seems that economical tyres are also likely to grow in popularity – 50 per cent of the country is spending money on essentials like food and clothing instead of maintaining their vehicles.
GfK data exclusively seen by Tyres & Accessories shows that sales of exclusive brands account for 10.4 per cent of the 2007 UK car tyre replacement market. Based on the results of GfK’s ongoing research, this means 2.62 million of these tyres were sold in the market last year. GfK defines exclusive brands from the retail perspective, meaning tyres that are only available from one clear retail network such as Kwik-Fit’s Arrowspeed brand or ATS’s Riken.
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