Consumer and retail trends driving growth of tire market e-commerce

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E-commerce has been a key business disruptor across all industries and is forcing change, innovation and growth in the tire market. Still relatively new to the business-to-consumer replacement tire market, online tire sales sites have become significant for consumer research into tire types, attributes, reviews, pricing and availability. This trend and the expansion of e-commerce in general are leading to growth in online sales of tires, according to a new Smithers Rapra report, The Future of E-commerce for Tire Markets to 2023. (TRAC Members receive 15 per cent discount).

Across major tire market segments and geographic regions, the number of B2C replacement tires purchased online is estimated by Smithers Rapra at nearly 100 million units in 2018, or about 6.5% of the global market. This is expected to rise by an average of almost 19% per year to over 236 million in 2023, when the share will be nearly 13%.

 

E-commerce tire sales channel market 2015-23, by volume (million units)

 

Source: Smithers Rapra

 

Value growth will be somewhat higher, at 19.7% per year CAGR, from $7.1 billion in 2018 to $17.3 billion in 2023, faster than unit growth and reflecting modest price increases. While a degree of price competition within the online channel and versus offline retail will continue, the convergence of online and offline channels and the increasing importance of user experience relative to price will support higher prices in the channel over time.

End-use applications

Reflecting the numbers of vehicles in use, rates of tire replacement and rates of e-commerce penetration, the passenger car and light truck (light vehicles) segment is by far the largest, at 81% of volume in 2018, followed by motorcycles (12%) and then medium and heavy trucks and buses (7%). Light vehicles have been and remain dominant in absolute value and volume terms. In unit terms, motorcycles are a distant second, but in value terms, medium- and heavy duty trucks and buses are the next most important, although a much smaller segment.

Trends driving e-commerce tire sales

 

Consumer behaviour

Consumer preferences are ultimately the main market drivers for tire e-commerce with technology and retail developments enabling the change. Consumer behaviour and retail trends behind the uptake of e-commerce in tires include price sensitivity, reduced brand loyalty, time sensitivity and, increasingly, a desire for an omni-channel, which blends features of online and offline channels (already the case to some extent due to tire installation requirements).

Fitment proliferation

Fitment proliferation, the increasing number of available tire sizes, is also contributing to the growth of tires sales via the internet. This has been driven in part by the increase in rim diameters and the greater use of high-performance tires as OEM fitments, which is putting a strain on physical showroom and inventory space. E-commerce options help retailers and customers alike with education and availability. 

Growing economies and emerging markets

General economic and demographic growth serve as top drivers for tire e-commerce. B2C replacement tire e-commerce was initially a phenomenon of developed markets, led by Western Europe, followed by the US, which still enjoy the highest penetration rates. However, Asia-Pacific has already become the largest in unit terms and is on track to pass Europe in value terms during the forecast period, due to its large population and rapidly growing tire market (mostly motorcycle tires). Greater internet penetration and e-commerce readiness in developing markets are fueling the expansion of online tire sales. Very rapid growth will come from Eastern European countries and emerging economies such as China, India and Brazil, where levels of e-commerce penetration and vehicle density are comparatively low and growing.

For more information on the Smithers Rapra market report The Future of E-commerce for Tire Markets, visit https://www.smithersrapra.com/market-reports/tire-industry-market-reports/the-future-of-e-commerce-for-tire-markets-to-2023

Bridgestone Americas Announces New Executive Hires for Procurement, Enterprise Project Management

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Bridgestone Americas, Inc. announced new senior hires to lead business functions and better enable the company’s growth, Bridgestone says.

Rebecca Vest has joined the company as senior vice president, procurement and strategic sourcing partnerships, and Andrea Arrowsmith joins the tiremaker as its vice president of transformation initiatives and enterprise project management office (EPMO).

Read the source article at Tire Review

Nexen Tires wins Good Design Award for Winguard Sport 2 tire

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Nexen Tire announced that the Winguard Sport 2 received an award at the ‘Good Design Awards 2018.’

The awarded Winguard Sport 2 is a premium ultra-high performance alpine/studless Passenger Car Radial (PCR) tire that provides the optimal driving experience in the snow with a winter reindeer and ski plate as its motif. It has been evaluated as a premium winter tire for its excellent grip and stable performance in the snow with its unique 3D winter kerf and zigzag groove.

Read the source article at Traction News

David Herro Comments on Continental

Continental (XTER:CON)’s stock price has fallen due to industry-wide concerns about auto production volumes and tariffs, but we believe the company has superior end-market exposures and a lower risk profile than many of its peers. Continental’s tire business accounts for about 45% of the company’s earnings, and we find that it generates solid margins and returns relative to industry peers. Replacement tires account for a large portion of segment earnings and …

Read the source article at Value Investing

Vietnam to promote value addition to NR

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Badly hit by prolonged drop in natural rubber (NR) prices, Vietnam, the world’s third largest NR producer, plans to boost domestic consumption by promoting the manufacturing of rubber products such as tyres, gloves, automobile spare parts etc for both domestic and export markets.

Globally, unprecedented price falls, adverse weather and growing usages of synthetic rubber are pushing traditional natural rubber growers to other agricultural commodities. The same trend is seen in Vietnam too. Rubber growers are increasingly switching to fruits trees, cashew and pepper. Some are doing inter-cropping and converting only a part of their rubber plantations.

Read the source article at Rubber Asia

Bridgestone tops 2018 global social media ranking

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Bridgestone has taken pole position in the 2018 Tyres & Accessories global social media ranking. The world’s largest tyre manufacturer’s @Bridgestone handle rose an impressive seven places to take first place from last year’s winner Michelin. Both @Bridgestone’s Klear and RightRelevance scores were of the highest order, with just three points separating them, resulting in a very high average of 87.7, which was ultimately three points clear of second place.

Read the source article at Tyrepress

Yokohama makes senior management changes

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Tokyo – Yokohama Rubber Co. Ltd has announced senior management changes effective as of 1 Oct.

Takashi Shirokawa has been given an additional role as head of the company’s Tire Materials Development department no.1.

This in addition to Shirokawa’s current roles as head of the Tire Materials Development division, head of R&D Center and head of R&D department.

Also, Osamu Mikami has gained an extra role as head of the company’s Hamatite and Electronic Materials division.

Read the source article at European Rubber Journal

Synthetic rubber prices likely to remain volatile

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AKRON—Prices for synthetic rubber and petrochemical feedstocks have been “incredibly volatile” and are likely to remain so for a while, according to a speaker at the International Tire Exhibition & Conference in Akron Sept. 11-13.

“Energy- and economy-related fundamentals in the synthetic rubber market are encouraging, but risks abound,” said Bill Hyde, executive director-olefins and elastomers at IHS Markit.

Read the source article at Global Rubber Markets News

Goodyear race tire plant earns manufacturing excellence award

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ROLLING MEADOWS, Ill. – Goodyear’s race tire plant in Akron is one of four manufacturing enterprises to have earned a 2018 Excellence Award from the Association for Manufacturing Excellence.

Read the source article at Rubber and Plastics News

Hankook Tire positions itself at 2018 IAA

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Presenting itself as a global, top-tier truck tire manufacturer, Hankook Tire has started preparations for this year’s 67th IAA Commercial Vehicles show, taking place in Hanover, Germany between September 20th and 27th.

Hankook will be premiering a new tire line-up for mild on- and off-road use. These tires are engineered for ultimate steering, driving, trailer axle. In an outdoor exhibition area, the company will be highlighting further brand activities.

Read the source article at Autosphere.ca