India’s replacement tyres market posts robust sales

replacement tiresTHE SLOW demand for passenger cars in India did not tip off the growth of replacement passenger car tyre market. Based on a recent study by GfK, there are over 5.5 million car tyres sold in India’s replacement market in first nine months of the year

Delhi is biggest contributing city in sales, with its 12% share in the market, followed by Mumbai, Hyderabad and Bangalore with 9%, 6% and 5%, respectively, says the research firm.

Robust sales are reported for car and SUV tyres in the last three quarters. Car owners in the top 43 cities in India bought more than 5.5 million tyres in first nine months of 2013; with the third quarter sales volume increasing by 11% over the previous quarter.

According to GfK findings, more than 700,000 units were sold in September alone, taking the total market value of replacement car tyres in the first three quarters of the year to more than US$ 360 million.

“The replacement market for car tires has been growing this year, thanks to the buzz created by new product launches, consumer promotions amidst turbulent prices of domestic natural rubber, the weakening local currency and volatile economy,” highlighted Anant Jain, Account Director, GfK India.

GfK has been carrying out research on car tyres in India since January 2013. The latest universe count revealed that there are around 3,000 tyre specialist shops selling passenger car tires in these 43 cities.

The 13” tyres form the largest segment occupying more than one-third of the overall replacement tire sales volume share due to the fact that larger selling compact hatchback vehicles commonly have tyre fitment of this size. The other growing segment is 14”—one in five tyres (20%) sold this year are of this size, making it the second largest segment.

“With the increasing launch and sales of crossovers and SUVs in India, we anticipate the market to move towards larger sized tyres of 16” or more, and this is expected to drive the replacement market for the SUV category at a much higher pace in future,” said Jain. “As SUV tyres cost almost twice as much as normal passenger car tyres, this presents the potential to generate much higher revenue for manufacturers.”

Segment analysis from GfK revealed that in these top cities, one out of eight tyres sold are SUV tyres and more than 20% of the turnover comes from this segment. Three-quarter of SUV tyres sold is of 15” size and the remaining are 16” or more.

“The automotive industry in India presents vast possibilities for car tyre manufacturers, as evident from the set up or expansion of manufacturing plants by the different players in the country,” commented Jain. “Looking ahead it is expected that the car tyre replacement industry shall continue to expand at steady rate, which holds an opportunity for the industry players to drive their growth story,” he concluded.