Replacement car tyres see increased demand in Southeast Asian markets

Increased demand for replacement car tyres is not new. The demand has been slowly rising and has seen a boost of 14% in markets of Indonesia, Malaysia, Philippines and Thailand in the first quarter of this year. During this quarter 2,557,600 car tyres were replaced. These figures were based on a latest survey conducted by GfK Asia. Growth was primarily seen in Bangkok while Malaysia Klang Valley too saw increase sales increase of 38% and 16% as compared to the last quarter of 2011.

This spurt in demand is usually seen during the Chinese New Year Period in January but this year increased demand was brought about due to the Thailand floods which took place towards the latter half of 2011. While Japanese tyre companies are seeing decreased demand they still hold a 40% market share in these four major countries. Local and international tyre brands are seeing an upsurge in demand basically due to improvement in the quality of their products.

Due to current economic downturn customers are opting for lower cost tyres. Customers are wary of overspending during these trying times and hence tyre companies who can match on both quality and price factor are the ones most likely to succeed in these markets.

News release: Local tire brands opens the year with robust growth

Demand for replacement car tire markets in the major cities of four emerging markets of Southeast Asia saw a surge of 14 percent in demand in the first quarter of this year over the previous quarter. GfK retail tracking of replacement car tires across bustling cities* in Indonesia, Malaysia, Philippines, and Thailand where vehicle ownership is highest reported some 2,557,600 car tires being replaced in the first three months of the year.

Findings from the global leading market research company revealed that growth in the opening quarter of the year was driven predominantly by demand boosts in Bangkok and vicinity as well as Malaysia’s Klang Valley, which registered incremental sales volume of 38 and 16 percent compared to the closing quarter of 2011.

“While the healthy sales performance of replacement car tire in Malaysia was driven by seasonal demand brought about by the festive Chinese New Year period in January, the sudden sales spike in Thailand was an exceptional occurrence that was a result of the flooding disaster which took place at the end of third quarter last year,” highlighted Ms. Jasmine Lim, Account Director at GfK Asia. “As a result, replacement car tire sales fell by 26 percent in quarter four last year, but pent up demand drove sales up considerably in the following quarter.”

Judging by all the brands present across all 4 markets, it is apparent that dominance of Japanese tire brands is being diluted in this region. Comparing first quarter results of this year versus the last, market share of major Japanese tire makers declined by nearly 3 percent. Nevertheless, they are still holding the lion’s share of about 40 percent across all four countries. On the other hand, performances of local and international brands are on the uptrend with their improving standings.

“Prudent consumers will tend to choose local car tire brands due to their lower cost, a factor that is especially crucial during the economic recovery phase,” said Ms. Lim. “With the prediction that consumer will continue to exercise caution in their spending in the upcoming months, we anticipate that tire brands which are best able to offer top value for consumers’ bucks to be the ones who will flourish and grow in 2012.”
GfK reports also showed that the average price of replacement car tires have remained relatively stable in the last year, increasing by only USD2 per tire across the four markets.
Besides Malaysia, Indonesia, Thailand and Philippines, GfK Asia also conducts retail audit for replacement car tires in the major cities of South Korea and China.

· Previous quarter comparison: Jan – Mar 2012 VS Oct – Dec 2011
· Cities covered in the countries surveyed:
– Malaysia: Klang Valley

– Indonesia: Jakarta, Bodetabek, Surabaya, Medan, Bandung, Makassar

– Philippines: National Capital Region

– Thailand: Bangkok and vicinity