At the Global Polymer Summit, industry experts highlight the importance of combining external market intelligence with internal metrics to navigate recent shifts in tire sizes, categories, and global demand, offering critical insights for tyre dealerships aiming for growth in a complex landscape.
At the recent Global Polymer Summit held in Cleveland, Miquel Quiros, Vice President of Retail Tire Market Insights at GfK-Neilsen IQ, highlighted a critical approach for tire dealerships aiming to succeed amid today’s dynamic market. He emphasized that businesses must look beyond internal metrics—such as sales figures, staffing decisions, or investment levels—and incorporate external market conditions into their strategic planning. Quiros explained that while key performance indicators (KPIs) primarily influence decisions, integrating insights from outside the industry provides a more comprehensive view. This broader perspective enables retailers to benchmark their performance against market trends, identify opportunities, and adapt proactively.
Currently, the U.S. aftermarket tire industry is experiencing some softness in unit sales, with a marginal 0.8% decline so far this year. Despite this, retail tire sales have increased by 1.3%, reaching approximately $14.7 billion, driven largely by a 2.1% rise in the average tire price from $176 to about $180. Quiros pointed out that tire sizes with rim diameters of 17 inches and smaller are showing declines. Specifically, tires with 16-inch and smaller diameters have seen a 7.5% drop in unit sales, representing nearly 29% of the tire units sold. Meanwhile, 17-inch tires have decreased by 2.8%, holding about 27% of unit sales. Conversely, larger tire sizes are gaining traction: 18-inch tires have experienced a 2.2% increase in sales and now account for approximately 22% of unit sales, while those 19 inches and larger surged by 9.3%, claiming the remaining share.
This shifting landscape means retailers must carefully manage inventory. The fact that 17-inch tires constitute 27% of sales but only generate about 24% of revenue indicates a need to adjust sales strategies for these segments. Moreover, 16-inch and smaller tires, which make up around 29% of units, contribute only 20% of revenue, highlighting their lower return and the necessity for strategic handling. Quiros underscores that understanding these market shifts—particularly the migration from smaller to larger diameters—is essential for optimizing inventory, production, and sales approaches.
In terms of tire types, nearly 60% of the market comes from mature categories such as touring, highway-terrain, and high-performance tires. However, these segments have experienced a 4% decrease in unit sales and a 1% decline in average price, now averaging around $175 per tire. He suggests that dealers adopt a precise, surgical pricing strategy in these categories to maintain profitability amid tighter price flexibility. While core segments face declines, growth is evident in categories like CUV, light truck (LT), and ultra-high-performance (UHP) tires. These have increased by approximately 4% in unit sales and 9% in average price, collectively representing about one-third of the market.
Emerging segments, including all-weather and electric vehicle (EV) tires, currently account for around 4% of the market but are experiencing steady growth in both units and prices. Additionally, niche markets—such as rally, mud terrain, winter, and cargo van tires—constitute about 3% and tend to be more stable, often with customers willing to pay a premium for specialized products.
Looking at the broader industry outlook, data from the U.S. Tire Manufacturers Association (USTMA) shows that tire demand in the U.S. increased across all categories in 2024. Medium truck and bus replacement tires grew by 12.5% to 23.4 million units, while light truck tire shipments increased by 7% to 36.7 million units. Passenger tire shipments saw a modest rise of 1.3%, reaching 222 million units. Additionally, imports are on the rise, with light truck tire imports jumping 26.1% to 39.6 million units. Notably, Cambodia has become a significant source, with passenger tire imports increasing by 67% to 8.9 million units. These trends highlight the importance for dealers and manufacturers to combine external market intelligence with internal data to anticipate changes, manage inventories efficiently, and refine their product offerings accordingly.
Supporting these insights, GfK data reveals that despite a slight decline in aftermarket unit sales across many categories, increased pricing strategies and improved product mix have boosted retail revenue. An estimated 94 million tires were sold through independent U.S. retailers in the first ten months of 2024—a 2% decrease compared to the previous year—but the 6% rise in average unit price, which reached about $185, resulted in a 4% increase in total revenue, totaling approximately $17.4 billion. This exemplifies how category management—monitoring product life cycles and segment performance—can help retailers navigate market fluctuations and seize growth opportunities.
Meanwhile, global tire manufacturer Michelin experienced a 1.9% revenue decline in the first quarter of 2024, largely due to decreased original equipment (OE) volumes in Europe and North America. Nonetheless, Michelin remains optimistic about the longer-term outlook, supported by strong sales in passenger and light truck tires, as well as growth in China driven by domestic demand and government subsidies. These contrasting trends between retail aftermarket performance and OEM fluctuations reinforce the importance of understanding both market segments for strategic decision-making.
All these industry signals, shared during the summit and other forums, affirm that success in today’s tire market depends on a dual approach: leveraging external market insights and meticulously analyzing internal performance data. By combining these perspectives, companies can make smarter decisions regarding inventory, pricing, and product development—ultimately remaining competitive in a marketplace that is increasingly complex and unpredictable.
Source: Noah Wire Services
