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GfK Data: Tire Sales Recovering For Independents

Tire sales are rebounding and the market share for lower-tiers shows signs of growth, according to statistics from Growth from Knowledge (GfK), a data and research firm that collects monthly and weekly tire sell-out data from thousands of POS systems of independent tire dealers across the country.

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GfK and the Tire Industry Association (TIA) teamed up this week to host a webinar to share how tire sell-out at the dealer level has been affected by the coronavirus. Neil Portnoy, managing director for GfK’s POS data, said tire sell-out began to decline the week ending Mar. 14, when the U.S. government declared a national state of emergency due to the coronavirus pandemic.

“We had the national emergency, and the bottom just fell out of the market. We saw the week ending Mar. 28, the market was down 45-50%,” Portnoy said, comparing this year’s sell-out data to last year’s during the same time period.

According to GfK data, that decline continued through the second week of April. Then, as people started receiving stimulus checks and the stock market bounced back, tire sell-out data climbed steadily through the end of April and into early May. Portnoy said states relaxing their shelter-in-place orders and more people driving also helped increase tire sales for the independent channel.

David Stevens, vice president of POS tracking in the U.S. for GfK, said since the start of May, passenger and light truck tire sell-out across the independent channel was down 11% compared to last year.

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“We’re seeing some improvement in the market and getting back to more ‘normal’ levels,” he said. “But even before that early in the year, we were showing some declines and that will probably continue into the coming months.”

Stevens said since GfK started tracking tire-sell out data in 2016, Q1 tire sales have typically been lower for dealers, yet they recover from the slump the rest of the year, with Q4 typically showing high numbers.

Discretionary vs. Essential Vehicles

Stevens also said while GfK data saw a decrease in tire sales for dealers starting in mid-March, the market share of the light truck sales slightly spiked from the end of March into mid-April.

That trend points to the difference between discretionary and essential vehicles. Portnoy said essential vehicles are classified as delivery trucks, cargo vans and pickup trucks. Discretionary vehicles are those that people use for their daily commutes.

Stevens said in the 18-in.+ rim diameter range, light truck tire unit sales were only down 4.7% compared to a year ago, while non-light truck tire sales experienced an 18% drop in units compared to a year ago.

Toward the end of April, total sales units began to start leveling off with the increase in miles driven, which suggests that the passenger car market is showing an increase in sales, Stevens said.

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Growth in Lower Tiers

According to GfK data, Tiers 2, 3 and 4 saw growth in units sold in Q1 of 2020, while Tier 1 tires decreased in units sold.

Stevens said in the past, GfK data has shown that Tier 4 tires typically rise in units sold in Q1 but as the year progresses, units sold typically levels off. He said 2020 patterns have been consistent with years past.

“What April looks like is what’s going to drive what Q2 might look like,” Stevens said, adding that GfK expects to see an increase in Tier 4 units sold in Q2 this year.

Stevens said GfK data also shows that tire selling prices across all tiers stayed relatively consistent from Q1 last year to Q1 this year, with a slight increase in price due to rising tire prices from manufacturers.

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