I have been working with retail panels for 14 years, but something I experienced recently marks a "first" in my career.
GfK is now tracking truck tire sales in southwest Europe. We started in the UK in 2012 and then with France and Italy. In June, we had a full year of data from the French truck tire panel and saw clearly the marked difference between "sales in" and "sales out" for truck tires.
In most industries, there's not a big difference between sales in and sales out, but in the automotive aftermarket - specifically tires - the gap is significant. It was a first for me to see this trend so starkly. By measuring and analyzing sales out, GfK provides a whole new way of looking at the market. Typically, tire manufacturers work with data about sales in, such as the amount Michelin sells to retailers. Sales out focuses on how many tires the end consumer actually buys and when, as opposed to how many tires retailers hold in stock.
One reason sales out is so important is that tire buying has a different seasonality than other industries, since purchases are linked to weather conditions. And retailers, depending on where they are located, sell at very different prices. This is very important for tire makers and we're the only market research firm that provides manufacturers with the ability to understand sales out - e.g. when the consumer buys what at which prices.
French truck tire trends
Of course, you're probably wondering about some of the trends we have uncovered in the new French truck tire sales out panel that I mentioned. Indeed, we see that a critical threshold was passed that marks a psychological change for the French truck tire market.
For the first time at the end of 2013, sales of remolded (retreated) tires represented more than half the market in France, due to strong sales at that time. Remolded tires gained 1.5 points of market share - moving from a 49 percent market share to 50.5. This is not a big change, but is important to highlight because the psychological barrier of 50% was crossed.
Since January 2014, the trend reverted back to stronger sales for new tires, putting us back to the former position in which new tire sales are higher than remolded tire sales. As a whole (for both new and remolded truck tires), the market had grown 7 percent at the end of June 2014, compared to the same month in 2013.
Our research showed clearly that the market in France differs from others in southwest Europe, such as Italy. In France, remolded tire sales are particularly strong due to the importance of French tire maker Michelin, which was the first worldwide to sell remolded tires.
A bit of history
If you'll allow, I'll diverge quickly for a bit of history. In 1946, Leon Laurent opened a small garage in Avallon, France and offered clients to buy tires and also repair tires. He developed a new technique for repairing tires that became known as remolding. In 1952, Michelin started a partnership with Laurent Tires and helped the small company grow and develop. By 1970, Michelin owned Laurent Tires, working to improve the technology for remolded tires, especially for truck tires.*
This is the reason why the culture for remolded tires remains so strong in France: That's where the concept was invented, and France's Number 1 tire manufacturer contributed to the development of remolding technology.
Therefore, it's not surprising that France has an entirely different market structure for tires than Italy, where only 22 percent of truck tires sold are remolded. This is a huge opportunity for the Italian market and we are looking into this market closely in our next blog post.
As the leader for automotive in southwest Europe, I'm excited to be able to uncover and share insights about the market with my clients, such as details about market structure and sales out. And, as I mentioned at the beginning regarding our ability to measure sales out, it's always exciting to discover something new and different about a market that really provides value to our clients.
Get more insights
Perrine Guyot is the leader for automotive in SouthWest Europe, GfK. To gain the full insights and benefits from our detailed study of the SouthWest Europe tire market, contact us.
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