The replacement car tyre market for the key capital cities of Malaysia, Indonesia, Thailand and the Philippines collectively registered a slight growth in volume demand by 2% in 2014 compared to the previous year. However, total sales dollar generated was lesser by five %—largely a result of lower pricings due to challenging market situation to win over the consumer dollar.
Among the markets tracked, Indonesia’s robust performance reflected 11 % surge in replacement car tyre volume consumption last year over the year before. During this same period, the other three markets sustained marginal growth of less than one %
“Around 16 new car tyre brands entered the four tracked ASEAN countries last year, bringing the total from 90 in 2013 to 106 in 2014,” highlighted Jasmine Lim, Account Director at GfK Asia. “The situation in the Philippines was most intense as the market saw the entrance of over 10 new brands competing for a piece of the pie that was not growing in size.”
An interesting observation was the rising focus and complexity within the 16 inch car tyre segment which was already occupied by 60 brands. GfK findings across these key cities reported seven new players in 2014, bringing with them more than 400 new model offerings for this particular diameter size alone.
“More than 6,000 automotive outlets across the tracked markets are facing the same challenging predicament stemming from this influx of contenders,” stated Lim. “At the end of the day, the beneficiaries are the consumers in these regions who got to purchase their 16 inch tyres for less since average selling prices fell from USD123 to USD115.”
Currently, the automotive retail outlets existing in the key capital cities of Thailand, Malaysia, Indonesia and Philippines include tyre specialists, car accessories shops, fast fitters and car garages. In addition, GfK also conducts retail audit tracking of replacement car tyres in key cities across other Asia Pacific markets including China, Japan, India, Taiwan and South Korea.
“The aggressive business condition in the car tyre sector means dealers have to be very vigilant and always prepared to cater to unexpected market demand such as selectively stocking up on brands and SKUs, allocating more storage space, expediting stock delivery times, etc. in order to avoid missing out on valuable opportunities,” Lim commented. “With such a competitive environment, it is essential for brands to monitor and understand consumer preferences when selecting car tyres; on top of effectively communicating their unique selling points (USP)—the key to maintaining and attracting new customers” concluded Lim.