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

Nexen Tire to Increase Prices by Nov. 1

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Nexen Tire America, Inc. has announced it will be adjusting the pricing on all U.S. passenger and light truck tires sold in the U.S. starting Nov. 1.

The maximum increase will be 6% but will vary by SKU, the South Korean tiremaker said. Like other tire manufacturers, Nexen cited growing transportation and logistics costs as well as other rising business costs as the reason for the price increase.

Read the source article at Tire Review

Online Tire Market Business Growth Statistics and Key Players Insights: Michelin, Bridgestone, BF Goodrich, Goodyear, Hankook

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Online tire sale platform
The online retailing helps in reaching out too many consumers without launching stores and this results in cost benefits which are ultimately passed on to the customers. Moreover, increasing spending on e-commerce platform by OEM’s due to high internet penetration rate will drive the online tire market during the forecast period as well.

Read the source article at openPR.com

Kumho Tire announce tire price increase effective October 1st

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Kumho Tire announced it will increase tire prices effective October 1st for its passenger, light truck, and medium truck tires sold in the U.S. The percentage increase will be up to 6% and will vary by SKU.

The price adjustment reflects economic factors such as increased raw material costs. Kumho will continue to provide best-in-class products at competitive prices, with superior quality and innovative technology.

Read the source article at Traction News

GRI ag tires introduced at Farm Progress Show

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BOONE, Iowa—Specialty tire manufacturer Global Rubber Industries plans to launch its latest agricultural tires, the Green XLR 70 and 85, as well as its range of flotation, tractor and implement tires, during the Farm Progress Show, to be held Aug.

Read the source article at Rubber and Plastics News

Bridgestone, Cooper raising aftermarket P/LT tire prices Oct. 1 in U.S.

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AKRON — Bridgestone Americas Tire Operations and Cooper Tire & Rubber Co. plan to increase replacement market prices Oct. 1 on passenger and light truck tires sold in the U.S.

Read the source article at Tire Business

Ag super single tyres to gain ground from tracks – Titan International

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Will the agricultural market shift towards wheeled 4WD tractors over their tracked counterparts in the years to come? Titan International believes so. It bases this projection upon feedback from US agricultural equipment dealers and their customers, as well as from testing the tyre maker carried out in North America together with dealer group Van Wall Equipment. This showed that super single tyres offer comparable field performance and reduced soil compaction at a much lower cost than tracks.

Read the source article at Tyrepress

Apollo Tyres: European truck tyre production starting this quarter

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Truck tyre production at Apollo Tyres’ factory in Gyöngyöshalász, Hungary will begin before the end of September. According to Gaurav Kumar, chief financial officer of Apollo Tyres Ltd., production is scheduled to start during the July to September quarter and the ramp-up of truck tyre production will then continue and reach a maximum capacity of 1,200 pieces per day by the end of March next year.

Read the source article at Tyrepress

BKT underlines the evolution in agricultural tire market needs

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Italian farming company Nodari notes the continually evolving requirements in today’s farming world, as operators prepare for Agriculture 4.0

Farming company Nodari uses BKT tires on much of its equipment. The well-established company from Brescia in Italy provides services to local companies, operating mainly as a contractor, especially for biogas plants.

Read the source article at Tire Technology International

Yokohama posts “highest-ever” sales and operating profit

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Tokyo – Yokohama Rubber Co. Ltd has posted a 32.3% year-on-year rise in operating earnings to $242.6 million on first-half sales 1.8% higher at $2.85 billion, the company announced 10 Aug.

YRC cited raw materials, exchange rate differences and the price/mix factor as reasons for the earnings improvement. Combined, these offset negatives such as lower tire unit sales volume and higher fixed costs.

Read the source article at European Rubber Journal