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Over 5.5 million car tires sold in India’s replacement market in first nine months of the year: GfK
Delhi is biggest contributing city in sales while Mumbai reflected strongest growth among large cities
5 December, 2013, NEW DELHI – Although demand for passenger cars in India has somewhat fallen short of expectations this year, the replacement passenger car tire market is thriving with robust sales reported for car and SUV tires in the last three quarters. Car owners in the top 43 cities in India bought more than 5.5 million tires in first nine months of the year; with the third quarter sales volume having surged by a substantial 11 percent 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 tires in the first three quarters of the year to more than USD 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 tires in India since January 2013. The latest universe count revealed that there are around 3,000 tire specialist shops selling passenger car tires in these 43 cities.
Delhi, the national capital is the largest contributor to the sector with 12 percent share in the market; followed by Mumbai, Hyderabad and Bangalore with 9 percent, 6 percent and 5 percent respectively. Other major markets are Kolkata, Chandigarh, Ahmedabad and Pune. Among the top four cities, Mumbai showed the greatest growth potential in last quarter with 17 percent increased sales. The city also reported the highest average selling price for tires, which in quarter three reached USD66, compared to the national average of USD61 during this same period.
13” tires 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 tire fitment of this size. The other growing segment is 14”—one in five tires (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 tires 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 tires cost almost twice as much as normal passenger car tires, 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 tires sold are SUV tires and more than 20 percent of the turnover comes from this segment. Three-quarter of SUV tires sold is of 15” size and the remaining are 16” or more.
“The automotive industry in India presents vast possibilities for car tire 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 tire replacement industry shall continue to expand at steady rate, which holds an opportunity for the industry players to drive their growth story,” he concluded.
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