1 - What are the main tire trade trends in Europe?

Basic comments:
Compared with other automotive aftermarkets like parts, glass, body and parts the margin of the tire business is on a low level. That is primarily based on:
  • Intensive cutthroat competition with a strong entrance of new competitors (online, car dealers, IAM garages accompanied with decreasing target groups like mass merchandizers and gas stations.
  • branding policy of all tire manufacturers with a lot of brands from premium level to low budget level and private labels (is forcing cannibalization combined with lower margins)
  • one of the biggest negative influence factors is the conservative and passive wait and see attitude of most of the traditional tire dealers.
From these points of view – especially based on the low and decreasing margin development – the B2C business combined with online routing strategies and additional business fields like auto service will get more and more importance in the future.

Now and near future:
  • Increasing online business (B2C) web shops (car parts webshops in germany report).
  • Increased expansion of online customer routing to own chains/distribution partners.
  • Increased expansion of B2C business
    • Direct delivering in the supply chain from tire manufacturers to repairers/fitters. That means forcing the retail business.
    • Increased expansion in controlled chains of auto service business in fact of better margins.
    • the increased cutthroat competition is countered by appropriate marketing activities like permanent price screenings, permanent medium-term business plans etc. instead of price deductions
  • Rebuilding the controlled distribution of tire manufacturers from controlled distribution to hard franchised chains (cost savings and stronger identification of the entrepreneur).
  • Stronger building up auto service
Distant future:
  • Discovering niche target groups like IAM garages including the parts distributors with the high frequenced just in time delivery.
  • Partnership with garage online portals like Fairgarage, Ebay/autobutler, Bosch Drivelog (see garage online caomparison portals).
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