Market research data to support independent tyre dealers

Posted on 16th November 2016

Research by Micheldever Tyre Services has revealed a raft of motoring trends, which can now be used to help independent tyre dealers grow their businesses through the provision of detailed car parc and demographics for their catchment areas. 

The wholesaler has compiled a study using a variety of data stretching back to 2005 and plans to share this with its tyre dealer customers in order to help them better understand their local market and consumer behaviour. 

This includes a profile of each dealer’s local area, as defined by postcode, to understand the age and size of the cars and wheels within that area, as well as motorist demographics. This information is shared with independent dealers so they can make informed decisions about things like what sizes and brands to stock, as well as how and where to target their marketing. This in turn will allow dealers to attract more motorists to their forecourts.

The data covers:

 - Motorist behaviour, such as when they replace tyres and average annual mileage

 - Cars, such as new car registrations and age of vehicles in the UK

 - Tyres, including price fluctuations and volume sales by segments (budget, mid-range and premium)

The data has also allowed Micheldever to make forecasts up to 2020, which will help shape business opportunities for independent tyre dealers.

Micheldever’s sales director, Alan Baldwin, said: “Micheldever is the only wholesaler and distributor that is able to, and actual does, provide market insight to customers as part of the partnership approach we take with them. Ultimately, we are equipping independent dealers with national market intelligence and local profiling data, which ordinarily only the largest national companies have access to.

“We do this because the UK tyre market is very difficult for independent dealers, so we’re working hard to provide them with as much insight as possible to create a more level playing field.”

The research shows that every year since 2011 the market has been getting tougher as motorists are keeping their tyres for longer. Over the past five years, more than 50% of motorists consistently waited till tyre tread depth fell below the 1.6mm legal limit before replacing, compared to 15% in 2008. Additionally, the average mileage for private motorists has dropped to just over 7,000 miles per annum, compared to a high of 9,500 miles in 2005.

Meanwhile, total unit volume of sales between 2010 and 2015 declined by 10% (36.7 million in 2010 to 33 million in 2015). However, Micheldever predicts total unit volume of sales to grow by 6% by 2020.

Micheldever’s analysis reveals how the car parc in the UK has had impact on the sales of tyres influencing the trends and movements of the different sectors. The drop in new car sales after 2008 caused a decrease in 1-4 year-old cars and a significant increase in 10-year-old cars. By 2012 this impact had flowed through the car parc decreasing the numbers of 4-10 year-old vehicles, reducing the demand for premium and mid-range and increasing the market for budget.

When broken down by segment, the share of budget sales in 2010 stood at just under a third, with mid-range at a similar level, while premium tyres accounted for more than a third of the market. Since then, budget sales have grown to account for almost half of the market, while mid-range sales declined to less than a quarter. Sales of premium tyres have remained at a similar level.

Looking forward, Micheldever forecasts that due to the rise in new car sales from 2012 onward increasing the number of 1-4 year-old cars over the last four years, there will be a growth in the premium tyre and mid-range. This will occur due to the natural growth in 4-10 year-olds and a flattening in vehicles aged more than 10 years-old.

Alan Baldwin added: “The recession meant people were looking for the cheapest option rather than value for money, which mid-range and premium tyres offer over budget tyres in terms of quality and pence per mile of tread. But post-recession, rather than revert back to mid-range, many motorists have stuck with budget tyres, even though they cost more per millimetre of tread. However, we forecast this trend to improve over the next five years as motorist value the cost effectiveness and quality of mid-range tyres.”

Greg Wood, who runs John Wood Tyres in Hereford, said: “This sort of information from Micheldever is really useful for me because it allows me to better inform and educate my customers. For example, I know that there are more four to 10-year-old vehicles on the road and people are keeping their vehicles longer, which allows me to talk to them about the benefits of buying mid-range, because my margin is better protected in view of the geographical exclusivity that I get unlike with budget tyres. This means that my customers get a much better quality tyre, which will last them longer.”

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