2016 has seen the UK tire market spring back to growth after a prolonged period of decline. Innovation has been a contributory factor to growth with new ranges from key manufacturers selling well from launch.
Falling prices, at the till, particularly prevalent in what the industry calls “tier 1” or “premium brands” (essentially the six brands that almost every person in the street could name if asked) have stimulated growth (units +2.2% Jan-Jun 2016) at the premium price end. This strong growth has come at a market volume share cost to the budget end (units -4.5% Jan-Jun 2016) of the market that had seen increasing share since 2009. Whether resellers will be able to discount premium products moving forward with the current weak pound following Brexit remains to be seen.
The future looks promising for the tyre market which is of course ultimately dependent on vehicle manufacturing. Data from the SMMT (Society of Motor Manufacturers & Traders), and the DFT (Department For Transport) shows that 2015 saw the highest number of new registrations in ten years.
While SMMT and DFT data vary slightly they both show month on month average 5% + unit growth since January 2016. All new cars will require replacement tyres at some point and with a growing UK PARC the forecast is for growth.
The light commercial vehicle market has shown steady month on month growth from the beginning of the year with five of the six months to June showing positive unit sales growth (units +8.8% Jan-Jun 2016). Again the forecast in this area can only be positive. Light commercial vehicles are burning rubber delivering an increasing volume of consumer goods purchased online.