Table of Contents
Scope and Themes
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- What you need to know
- Definition
- Data sources
- Sales data
- Consumer survey data
- Advertising creative
- Abbreviations and terms
- Abbreviations
- Terms
Executive Summary
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- Passenger tire sales decrease 8% as consumers hold onto tires longer
- Five companies control 89% of all U.S. tire sales
- Respondent activity suggests rims market is a only a niche
- Independent tires dealers control 60% of retail distribution
- Yet these stores are threatened by mass merchandisers like Walmart
- Warehouse clubs increased number of stores by nearly 10%
- … yet sales, number of tire company-owned stores declining
- Chinese imports increased 116% from 2004 to 2009, threatening domestics
- Retread tires provide cheaper alternative for trucks
- Young consumers buying HP/UHP tires, now becoming standard
- Consumers most desire performance, safety, affordability in tires
- Light truck tire volume bears worst of recession
- Majority of consumers spend between $101-249 or $250-499 on new tires
- Consumers favor one-stop auto service
- Hispanic respondents value vehicle appearance, are buying rims
- Tire sales negatively affected by auto dealership closures
- Most consumers defer decisions about tire buying to professionals
- Rising costs of raw materials causing tire price increases
- Brand loyalty increases as consumers age
- Tire manufacturers turning to social media to motivate buying
- Internet plays larger role for Hispanics, more affluent buyers
Insights and Opportunities
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- Independent dealers can embrace the growth of big box retailers
- Independent dealers must sell their advantage
- Using big box retailers as a source of referrals
Inspire Insights
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- Trend: The Black Diamond Life
- What’s it about?
- From supermarkets to the TSA
- Why not tires?
Market Size and Forecast
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- Key points
- Passenger tire sales decreased by nearly 8% in 2009
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- Figure 1: Total retail sales of passenger tires in the U.S. and Canada, at current prices, 2005-09
- Figure 2: Total retail sales of passenger tires in the U.S. and Canada, at inflation-adjusted prices, 2005-09
Market Drivers
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- China tariff causes higher prices, constrained supply
- Raw materials cost increase causes price increases
- Recalls continue to be stain on industry
Competitive Context
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- Chinese tire imports account for nearly 20% of tire market…
- … although import opportunities slowed due to recent 35% tariff
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- Figure 3: Total units of Chinese tire imports, 2005-09
- Retread tires provide cheaper alternative for trucks
- Retread market controlled by major replacement tire players
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- Figure 4: U.S. sales of retread truck tires, by manufacturer, 2005-09
Segment Performance
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- Key points
- High performance tires becoming standard …
- … thus cannibalizing sales of All Season tires
- Light truck tire volume bears worst of recession
Segment Performance—Performance Rating
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- Key points
- High performance tires becoming standard, driving growth
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- Figure 5: Unit sales of HP/UHP tires, by volume, 2004-09
- Goodyear HP/UHP leader among major brands
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- Figure 6: Unit sales of HP/UHP tires, by manufacturer, 2009 *
Segment Performance—Seasonality Description
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- Key points
- Seasonal tires overview
- Mud/Snow tires sales steady
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- Figure 7: Unit sales of mud/snow tires, by volume, 2005-09
- All season tire sales decline 15.7% since 2005
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- Figure 8: Unit sales of all season tires, by volume, 2005-09
Segment Performance—Car and Light Truck
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- Key points
- Passenger tire volume down 11.2% over past two years
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- Figure 9: Total shipments and average price of replacement tires for passenger vehicles in the U.S. and Canada, 2005-09
- Light truck tire volume bears worst of recession
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- Figure 10: Total shipments and average price of replacement tires for light trucks in the U.S. and Canada, 2005-09
Retail Channels
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- Key points
- Independent tire dealers remain distribution leaders
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- Figure 11: U.S. sales of passenger tires, by retail channel, 2007 and 2009
Retail Channels—Independent Tire Dealers
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- Key points
- Independent tire dealers leverage auto service to supplement revenue
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- Figure 12: U.S. independent tire dealership sales of tires, at current prices, 2005-09
- Discount Tire largest independent dealer
Retail Channels—Mass Merchandisers
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- Key points
- Mass merchandisers present impressive threat to independent dealers
- Sears, offering private brands, trails Walmart
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- Figure 13: U.S. mass merchandiser sales of tires, at current prices, 2005-09
Retail Channels—Warehouse Clubs
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- Key points
- Warehouse clubs increase number of stores by nearly 10% between 2005-09
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- Figure 14: U.S. warehouse club number of stores, 2005-09
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- Figure 15: U.S. warehouse clubs sales of tires, at current prices, 2005-09
Retail Channels—Tire Company-Owned Stores
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- Key points
- Sales, number of tire company-owned stores declining
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- Figure 16: U.S. tire company store sales of tires, at current prices, 2005-09
Retail Channels—Auto Dealerships
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- Key points
- More than 1,000 auto dealers close doors
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- Figure 17: U.S. Auto dealership sales of tires, at current and inflation-adjusted prices, 2005-09
Retail Channels—Service Stations
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- Key points
- Service stations represent dying sales channel
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- Figure 18: U.S. service station sales of tires, at current prices, 2005-09
Retail Channels—Miscellaneous Outlets
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- Key points
- Overview
- Pep Boys
- Munro Muffler & Brake Service
- Online buying
Leading Companies
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- Key points
- Five companies control 89% of all U.S. tire sales
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- Figure 19: Retail sales of replacement tires, including passenger tires, light truck tires, truck tires, farm tires and OTR tires, in the U.S. and Canada, 2007 and 2009
- Goodyear still number one measured by volume
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- Figure 20: Market share of replacement car tires by volume, by manufacturer brand, 2007 and 2009
Brand Share—Bridgestone Americas Tire Operations LLC
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- Key points
- Bridgestone sales down 5.9% since 2007, well below industry average
- Investment in retreading operations pays off
- Bridgestone renews sports sponsorship agreements
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- Figure 21: BFS annual sales in the U.S. and Canada for passenger tires, light truck tires, truck tires, farm tires and OTR tires, at current prices, 2005-09
- Company facts
Brand Share—Goodyear Tire and Rubber Co.
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- Key points
- Goodyear sales decline nearly 20% in 2009, third straight annual decline
- Goodyear Assurance Fuel Max Tire proves company still innovation leader
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- Figure 22: Goodyear annual sales in the U.S. and Canada for passenger tires, light truck tires, truck tires, farm tires and OTR tires at current prices, 2005-09
- Company facts
Brand Share—Michelin North America Inc.
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- Key points
- Aimed at consumers willing to pay up, Michelin’s flagship brand secure
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- Figure 23: Michelin annual sales in the U.S. and Canada for passenger tires, light truck tires, truck tires, farm tires and OTR tires, at current prices, 2005-09
- Company facts
Brand Share—Cooper Tire
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- Key points
- Despite tariff, Cooper continues to import from China, raises prices
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- Figure 24: Cooper annual sales in the U.S. and Canada for passenger tires, light truck tires, truck tires, farm tires and OTR tires, at current prices, 2005-09
- Company facts
Brand Share—Continental Tire North America Inc.
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- Key points
- New products lead to sales growth
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- Figure 25: Continental annual sales in the U.S. and Canada for passenger tires, light truck tires, truck tires, farm tires and OTR tires, at current prices, 2005-09
- Company facts
Brand Share—Other
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- Key points
- Other brands falter overall, specific brands growing
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- Figure 26: “Other” brands annual sales in the U.S. and Canada for passenger car tires and light truck tires, at current prices, 2005-09
Innovation and Innovators
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- City offer residents free nitrogen refills
- 1-800EveryRim.com succeeds by supplying used rims online
- Goodyear, Continental introduce innovative fuel-saving tires
Marketing Strategies
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- Overview
- Digital media
- Major manufacturers get creative
- TCS and Social Butterfly bring social media to independent dealers
- Broadcast media
- Low budget production values prove fitting for local dealers, help viewers relate
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- Figure 27: American Tire, Goodyear Destination Savings, TV ad, 2010
- Bridgestone emphasizes cash back rewards
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- Figure 28: Bridgestone tires, $100 gift card, TV ad, 2010
- Bridgestone mixes nature and innovation to promote Ecopia tire
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- Figure 29: Bridgestone tires, Animated highways, TV ad, 2010
- Kuhmo highlights performance tire with video game-like action
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- Figure 30: Kuhmo tires, Car Jumps Bridge, TV ad, 2010
- Michelin creates narrative to tap into concerns over gas prices, promote mascot
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- Figure 31: Michelin tires, Evil Gas Pump, TV ad, 2010
Type of Tire Purchased
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- Key points
- Majority of households purchasing tires over past 12 months
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- Figure 32: Type of tire purchased, by gender, March 2010
- Young respondents buying specialty tires
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- Figure 33: Type of tire purchased, by age, March 2010
- Households earning $100K+ purchase most high performance tires
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- Figure 34: Type of tire purchased, by household income, March 2010
Tire and Rim Purchasing
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- Key points
- Rims purchasing only accompanied by tire purchasing
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- Figure 35: Tire and rim purchasing behavior, by gender, March 2010
- Young respondents aged 25-34 most active in rims purchasing
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- Figure 36: Tire and rim purchasing behavior, by age, March 2010
- One quarter of households earning $100K+ purchasing tires plus rims
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- Figure 37: Tire and rim purchasing behavior, by household income, March 2010
Tires and Rims: Consumer Spend
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- Key points
- Tires: Majority of consumers spend between $101 and $499
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- Figure 38: Consumer spend on tires, by gender, age and household income, March 2010
- Rims: Young respondents and more affluent respondents primary buyers
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- Figure 39: Consumer spend on rims, by gender, age and household income, March 2010
Tires and Rims: Qualities Consumers Value
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- Key points
- Performance, safety rate highest among tire consumers
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- Figure 40: Tire qualities consumers value, by gender, age and household income, March 2010
- Visual look is most important for consumers purchasing rims
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- Figure 41: Rim qualities consumers value, by gender, age and household income, March 2010
Tires and Rims: Consumer Maintenance and Use
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- Key points
- Respondents tend to maintain vehicle only when necessary
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- Figure 42: Attitudes to tire maintenance and use, by gender, March 2010
- Respondents aged 18-24 least likely to worry about tire wear
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- Figure 43: Attitudes to tire maintenance and use, by age, March 2010
- Less household income equals less maintenance, more quick-fix solutions
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- Figure 44: Attitudes to tire maintenance and use, by household income, March 2010
Tires: Brand Purchased
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- Key points
- One fifth of respondents purchase Goodyear tires
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- Figure 45: Tire brand purchased, by gender, March 2010
- Goodyear top choice among one third of those aged 18-24
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- Figure 46: Tire brand purchased, by age, March 2010
- Michelin leads among affluent households making $100K+
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- Figure 47: Tire brand purchased, by household income, March 2010
Rims: Brand Purchased
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- Key points
- Majority of respondents not active in purchasing rims
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- Figure 48: Rim brand purchased, by gender, March 2010
Tires and Rims: Where Consumers Purchase
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- Key points
- Tires: One quarter of respondents purchasing tires at branded tire outlet
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- Figure 49: Where consumers purchased tires, by age, March 2010
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- Figure 50: Where consumers purchased tires, by household income, March 2010
- Rims purchasing more or less evenly spread among retailer choices
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- Figure 51: Where consumers purchased rims, by age, March 2010
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- Figure 52: Where consumers purchased rims, by household income, March 2010
Tires and Rims: What Influences Purchasing?
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- Key points
- Majority of respondents defer decisions to professionals
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- Figure 53: Factors influencing tire purchase, by gender, March 2010
- Brand loyalty increases with age
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- Figure 54: Factors influencing tire purchase, by age, March 2010
- Internet plays larger role for more affluent households earning $75K+
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- Figure 55: Factors influencing tire purchase, by household income, March 2010
Race and Hispanic Origin
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- Key points
- Hispanic respondents purchasing specialty tires
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- Figure 56: Type of tire purchased, by race/Hispanic origin, March 2010
- Hispanics most likely buying tires in the $250-$499 range
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- Figure 57: Consumer spend on tires, by race/Hispanic origin, March 2010
- Black respondents value affordability, warranty over whites, Hispanics
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- Figure 58: Tire qualities consumers value, by race/Hispanic origin, March 2010
- Hispanic respondents value vehicle appearance, are buying rims
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- Figure 59: Attitudes to tire maintenance and use, by race/Hispanic origin, March 2010
- Firestone most popular with Hispanic respondents
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- Figure 60: Tire brand purchased, by race/Hispanic origin, March 2010
- Black respondents less likely to buy tires while getting other maintenance
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- Figure 61: Where consumers purchased tires, by race/Hispanic origin, March 2010
- Hispanic respondents most influenced by online media
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- Figure 62: Factors influencing tire purchase, by race/Hispanic origin, March 2010
Cluster Analysis
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- Performers
- Demographics
- Characteristics
- Opportunity
- Afforders
- Demographics
- Characteristics
- Opportunity
- Lookers
- Demographics
- Characteristics
- Opportunity
- Cluster characteristics
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- Figure 63: Tire clusters, March 2010
- Figure 64: Consumer spend on tires, by tire clusters, March 2010
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- Figure 65: Tire qualities consumers value, by tire clusters, March 2010
- Figure 66: Attitudes towards tire buying and maintenance, by tire clusters, March 2010
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- Figure 67: Where consumers purchase tires, by tire clusters, March 2010
- Figure 68: What influences tire purchasing, by tire clusters, March 2010
- Cluster demographics
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- Figure 69: Tire clusters, by gender, March 2010
- Figure 70: Tire clusters, by age group, March 2010
- Figure 71: Tire clusters, by household income group, March 2010
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- Figure 72: Tire clusters, by race, March 2010
- Figure 73: Tire clusters, by Hispanic origin, March 2010
- Cluster methodology
Appendix: Trade Associations
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