How did the tire supply chain fare in 2017?
With 2017 now behind us let’s take a close look at how the tire distribution channels fared. The focus of our observation is the “consumer” tire segment, therefore we will analyze the sell-out results on tires designed for cars, SUVs and 4X4s as well as light commercial vehicles.
Let's start by saying that - unlike previous years - 2017 was a positive year in Sell-Out terms. Following a few negative years, the tire channel experienced a slight shift in sales performance (+ 0.3%) and a decidedly growing trend as far as the overall value generated (+ 3.6%). We are talking about a distribution channel that sold about 21 million tires and developed a value of almost 2 billion euro.
Such a positive trend was also favoured by a rather cold winter which sustained the Sell-Out of winter tires starting from November. In addition to the predictable excellent performance of All-Season tires + 28%, Winter products likewise recorded a solid growth of 4%.
The summer season, on the other hand, was characterized by rather negative results. From April to October, the trends were a far cry from 2016, with double-digit negative peaks. Fortunately, the positive contribution made by the two final months of the year, November-December, reversed the trend and brought the whole sector back on positive grounds.
Analyzing the macro-trends of the sector, as illustrated by the diagram, the slight growth recorded in 2017 was due mostly to sales of SUV / 4x4 and Light Transport tires. On the other hand, in terms of value, the car segment is enjoying a reasonably good health with a solid + 4%, quite in line with the other segments.
As far as rim diameters are concerned, the market witnessed a progressive increase for the larger diameters to the detriment of medium-small rims, both in terms of sales volumes and value. High performance tires or SUV / 4x4 products – ranging between 18 and 19 inches and above – recorded double-digit growth figures, growing faster even than the market itself.
In seasonal terms, the All-Season segment continues to grow significantly, albeit not as quickly as in the recent past. All-Season tires end the year with a share of just under 13%, both in terms of volume and value. The greater market share of All-season products was earned at the expense of summer tires, as highlighted in the diagrams.
By contrast – despite the rather mild whether in recent years - winter tires maintained their market share, and thanks to a more “normal” whether pattern for this time of year growth was guaranteed again. Another interesting signal is the growth in value of the winter market with a + 8%, proving to be an extremely useful product for the growth of the market as a whole.
During the past year, average price levels rose to 94 euro, compared to 91 in 2016. The chart also shows that, during peak winter periods, the average price rises and then levels out at more reasonable levels, though still higher than in the past.
Finally, closing this brief analysis with a look at the competitive arena, once again we see that the number of brands on the market has significantly exceeded the previous year, with 229 in 2017 against 206 in 2016. An increasingly aggressive competition with dozens of new brands entering the Italian market every year. Nowadays, the consumer has the possibility to choose between a very wide range of products, and in some cases with rather aggressive price levels. In this highly competitive context, the specialized tire distribution channel still managed to close the year with positive trends and is ready to face the challenges of 2018. Growth can be expected in a number of areas and with the right tools it will be easier to analyze and seize the opportunities reducing uncertainties at the same time.
How is the collection of data on tire Sell-Out in Italy carried out?
GfK Italia started recording tire sales back in 2009. Research is currently active with the most important network for the market: specialist tire retailers.
Thanks to agreements with specialized tire dealers who collaborate on this research, GfK receives their Sell-Out data every month. Following a complex process of coding and statistical processing, GfK transforms the data of each individual points of sale into strategic information related to the entire channel of Specialized Tire specialists.
All this is based on absolute confidentiality that GfK guarantees to all collaborating tire specialists. Every number, value or information that GfK Italia provides, is always referred to the specialized Tire channel as a whole. No information can be traced back to individual retailers who participate in the research.