Tires - US - November 2016

OVERVIEW
What you need to know
Definition
EXECUTIVE SUMMARY 
The issues
Deflated sales on the road ahead
Figure 1: Total US sales and fan chart forecast of total replacement tire sales, 2011-21
Most consumers don’t think about their tires until there is an issue
Figure 2: Attitudes toward tires, by gender, August 2016
Online tire sales minimal compared to brick and mortar retail
Figure 3: Tire purchase location, August 2016
The opportunities
Consumers see value in professional tire installation
Figure 4: Attitudes toward tires, by household income, August 2016
Few consumers opt for the cheapest option available
Figure 5: Tire maintenance behavior, August 2016
Women are more open to multiple brands for their next tire purchase
Figure 6: Tire brand consideration, by gender, August 2016
What it means
THE MARKET – WHAT YOU NEED TO KNOW
Tire marketplace is extremely crowded and competitive
Independent tire retailers dominate US market
Passenger replacement tire sales forecasted to drop
MARKET SIZE AND FORECAST
Sales revenue expected to deflate down the road
Figure 7: Total US sales and fan chart forecast of total replacement tire sales, at current prices, 2011-21
Figure 8: Total US retail sales and forecast of replacement tires, at current prices, 2011-21
MARKET BREAKDOWN
Passenger car tire sales drop while light truck tire sales stagnate
Figure 9: Sales of replacement tire sales, by segment, at current prices, 2011-21
Independent dealers remain main location for tire purchases
Figure 10: Total US retail sales of replacement tires, by channel, 2015
MARKET FACTORS 
Low gas prices spur sales
Figure 11: All grades all formulations retail gasoline prices, dollars per gallon, January 2007-September 2016
Rise in miles driven increases tire usage
Figure 12: US miles traveled, all roads and streets, 1990-2015
KEY PLAYERS – WHAT YOU NEED TO KNOW 
Goodyear is the leading brand in US
Bridgestone Corporation leads US in tire sales
MANUFACTURER SALES OF REPLACEMENT TIRES
Manufacturer sales of replacement tires
Figure 13: Unit sales of U.S. replacement passenger and truck tires, by manufacturer brand, 2015
WHAT’S WORKING?
Flagship tire brands sustain strong brand recognition
Figure 14: Goodyear online advertisement, October 2016
Figure 15: Michelin online advertisement, March 2016
Figure 16: Firestone online advertisement, May 2016
WHAT’S STRUGGLING?
Smaller, lesser-known brands struggle in a crowded marketplace
WHAT’S NEXT?
Airless tires may find their way into commercial markets soon
Figure 17: Bridgestone air free concept tire, November 2013
THE CONSUMER – WHAT YOU NEED TO KNOW 
Online tire sales minimal
Discount Tire attracts older consumers, Walmart attracts Millennials
Consumers don’t think about their tires
Consumers find value in professional installation
MOST RECENT TIRE PURCHASE
Majority of consumers purchased tires within two years ago
Figure 18: Most recent tire purchase, august 2016
Women less likely to make tire purchases then men
Figure 19: Most recent tire purchase, by gender, august 2016
TIRE PURCHASE LOCATION
Discount Tire attracts a solid following
Figure 20: Tire purchase location, august 2016
Figure 21: Tire purchase location, by age, august 2016
Online tire retailing lags behind brick and mortar sales
Figure 22: Tire purchase location, august 2016
Figure 23: Discount Tire email campaign, April 2016
Millennials more likely to purchase tires at Walmart
Figure 24: Tire purchase location, by generation, august 2016
TIRE MAINTENANCE BEHAVIOR
General tire maintenance behavior is reactive not proactive
Figure 25: tire maintenance behavior, august 2016
Millennials most likely to change their own tires
Figure 26: tire maintenance behavior, by generation, august 2016
Northeast main consumers of seasonal tires
Figure 27: tire maintenance behavior, by geographic area, august 2016
Online researchers more proactive and willing to pay more
Figure 28: Tire maintenance behavior – CHAID – Tree output, August 2016
Figure 29: Tire maintenance behavior, by online tire researchers, August 2016
TIRE BRANDS
Over a quarter of consumers know tire brand for next purchase
Figure 30: Tire brands, August 2016
Men more sure what tire brand they will purchase
Figure 31: Tire brands, by gender, August 2016
Hispanics most likely to have specific tire brand in mind
Figure 32: Tire brands, by race and hispanic origin, August 2016
PRICE SENSITIVITY ANALYSIS
Tires price sensitivity analysis
Figure 33: Complete set of tires and installation – optimal price, July 2016
ATTITUDES TOWARD TIRES
Consumers find value in professional tire installation
Figure 34: Attitudes toward tires, august 2016
Women more likely than men to ignore tires until an issue arises
Figure 35: Attitudes toward tires, by gender, august 2016
Younger age groups less reliant on mainstream brands
Figure 36: Attitudes toward tires, by gender and age, august 2016
Run-flat tires appealing to younger demographics
Figure 37: Attitudes toward tires, by age, august 2016
Lesser known brands should target parents
Figure 38: Attitudes toward tires, by parental status, august 2016
APPENDIX – DATA SOURCES AND ABBREVIATIONS
Data sources
Sales data
Fan chart forecast
Consumer survey data
Direct marketing creative
Abbreviations and terms
Terms
APPENDIX – MARKET 
Figure 39: Total US retail sales and forecast of replacement tires, at inflation-adjusted prices, 2011-21
Figure 40: Unit sales of US replacement passenger and truck tires, by manufacturer brand, 2015
Figure 41: Total US retail sales of replacement tires, by segment, at current prices, 2014 and 2016
Figure 42: Total US retail sales of replacement tires, by channel at current prices, 2013 and 2015
APPENDIX – CONSUMER
CHAID Analysis Methodology
Figure 43: Tire maintenance behavior – CHAID – Table output, August 2016