The winter has been among the worst ones this year, however, not the coldest. While the environmental ministry has announced that following the stormy weather, about 1700 homes have already been flooded, most of the UK is experiencing high temperatures, albeit under 10°C. There has been a simultaneous boost in cold weather tyre fitments and accessories.
The Britain Winter So Far and Tyres
The cold weather this year has been tragic for some in Britain, while the opposite for some. But it’s definitely not the type of weather that would result in a boost in winter tyre sales. The stats on the latest GfK research report, however, suggest a significant increase in winter tyre sales in November 2013, both over the preceding month and last year.
GfK had earlier predicted that winter tyre sales figures for November would be a key factor in determining whether the overall winter tyre sales for 2013 were good or not. GfK market analysts have confirmed that the sales in the said month were up by 95% compared with October 2013, and approximately 20% higher than November 2012.
It will still be a few months before the final stats are out, but the winter season overall looks good this time around.
While this year’s sales figures for winter tyres clearly appear on the higher side, there is more to the market story than what meets the eye. The people in the trade have more interesting things to speak to you about than simple sales.
One of the theories that is doing rounds is that cold weather tyre sales have been just OK, the sale of mid-range and budget products have been dominating the sales scenario. Moreover, there are numerous imported tyres sold in such large numbers, that the market sentiment is almost obscure.
The Onset and Future of Winter Tyres
In reality, a considerable number of winter tyres were bought in the first rough winter, four years ago. This point is believed to have truly kick-started the cold weather fitment market. Further, a reasonable number of winter tyre fitments by pro-active and informed motorists, supported the sales in the following years. Moreover, tyre retailers also promoted this genre of products considering it a good profit-making and customer retention opportunity.
However, the real concern in certain regions still is the fact that cold weather tyres require a considerable capital investment, and incorrect projections could amount to cash flow issues for small businesses. Moreover, in UK, tyre depots face potentially highest risks in Europe due to heavy overhead costs associated with property, plus the repercussions of more temperate climates.
Both these aspects are less of a risk in other European mainland retail markets like Germany and France. Again, the argument about the increase in number of budget winter tyres holds. Any increase can be partly attributed to the lower cost risk in case these remain unsold.
However, we will still have to wait for more details to be available before reaching any final conclusions.
Source: Tyre Blog
Published: 21 Jan 2014