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an overview of the tyre market

On the face of it you would imagine that tyre manufacturers, suppliers and retailers were having a tough time in the current market and economic climate. New bike sales are struggling to gain traction, annual motorcycle mileages are down, and the quality of the latest rubber means tyres last longer. Prices are also up and margins have to be cut to the bone to remain competitive. Perhaps the only encouraging statistic is the size of the bike parc, which in the third quarter of 2017 was 1.35 million, the highest since 1994. 

Traditionally the plus side of tyre sales has been that they are essential and subject to legally enforced replacement, be it a roadside spot check or as a result of an MOT. To be on the road legally a motorcycle needs a pair of legal tyres, so theoretically that’s 1.35 million pairs of tyres that will need replacing over time. As we shall see, how this actually pans out has everything to do with ownership and usage patterns.  

There is the European Rubber Manufacturers Consortium (ERMC), and it has all the figures for each vehicle type, split into what’s known as the brands, Goodyear, Dunlop, Pirelli, Metzeler, Maxxis, Continental and other imports which are predominantly from South-east Asia. So all the manufacturers know what each other is selling for the whole of Europe. However, some figures are published by ETRMA, the European Tyre and Rubber Manufacturers’ Association. The UK figures available to us were for comparative sales by tyre type year on year. Headline statistics for 2017 indicated that sales were up 2.41%, with scooter tyre sales being the main contributor. Contrary to anecdotal evidence, hyper sport was up 8.75% and the biggest seesaw was reflected in the off-road sector, where trail off-road was up by 14.95% and off-road (motocross) down by 7.0%. To put things into perspective, compare the totals for motorcycle and scooter tyre sales – 16,000,000 compared with 289,119,000 for cars and light trucks in 2016.

Precise figures for the overall number of tyres sold in the UK are virtually impossible to get hold of as that would require each manufacturer to divulge “sensitive” corporate information.

The route to market is the fairly standard one of manufacturer to distributor to dealer. 

 

Dunlop Goodyear
Dominic Clifford, manager

2017 hasn’t been too bad a year and there are a few reasons for that. Registrations dropped off a cliff; most motorcyclists now, because of their age and socio-economic position, have more than one motorcycle and somewhere to keep them so the mileage per machine is falling and tyres are lasting longer. 

As a business model you wouldn’t be encouraged to invest. However, overall we’ve seen some strong performance, especially in the sports sector for 2017 and in sport touring, which is by far the biggest sector now. From the heyday of 2008/09 the sport sector has dropped about 30%, whereas sport touring has stayed more level with only a 15%-20% drop. In 2017, however, Dunlop saw some growth in SportSmart2 Max and TT and Qualifiers despite sportsbike sales falling. This is down to “lag”, where replacement tyre sales will reflect the bikes sold over the previous two or three years. 

To illustrate the strength of sport touring, Dunlop supplies the Ron Haslam Race School with tyres, and most of the tyres used there are, to the surprise of some pupils, the SportSmart. In sports touring we have entry level, mid-level and premium.  

The off-road sector suffered in 2017 but that was on the back of a bumper year in 2016. This may be down to stock holding by wholesalers but again nobody actually knows for sure. We do like to get our tyres on the shelf during Q1 so we’re ready to go when our customers are.

As far as full road race product goes we’ve seen strong growth in 2017. We’ve extended our contract for Moto2 and Moto3 at GP level, then, as you scale down through the various championships, we’ve renewed our control tyre contract with the Thundersport series for the 500 Cup and that’s been a success for us with our Alpha 13 product. 

Of course I’m biased, but we have got some of the best performing tyres in that marketplace with our KRs and GPs. These tyres go out through service providers who are trackside and help with setup and everything else. Our motorsport and track day product has been phenomenal. 

As for the adventure market, Dunlop has the TrailSmart Max, but again our RoadSmart3, which we do in the same sizes, is generally speaking a much better choice because of more on-road usage.

As to the future, it’s going to be e-bikes and this is likely to proliferate in off-road initially.

Specialist tyre dealers like Wheelhouse and FWR sell 10-15 times as many tyres as the average motorcycle dealer. In the workshop, tyres are seen as a dirty product and there seems to be a reluctance to fit tyres at a dealership. While technicians are trained to plug in diagnostic tools to the latest whatever, they’re less keen to change tyres.

 

Michelin
James Dimmock, marketing manager motorcycle

It’s true that new registrations are struggling, but of course the pre-registering of Euro 3 bikes to clear the deadline will have had a big effect and there were some great deals across the market on all kind of bikes in late 2017.

It’s also true that tyres are lasting longer, but from Michelin’s point of view that’s fantastic news. We spend more than €600m a year on R&D to make our tyres better and better across a whole range of performance criteria. In the long run, you never lose out if you give the consumer what they want – and that includes making tyres that last longer.

Last year was a pretty strong one for us, even though the market was basically flat. There has been growth in certain areas such as trail bikes, and there are more multiple bike owners. These owners may not do huge mileage, but they are really passionate about their motorcycles and they are extremely knowledgeable and technically motivated. That actually helps a brand like Michelin because they do their research and they realise the difference between value and price.

That’s also relevant to sportsbike owners shifting to sports touring tyres. In our experience, people who ride sportsbikes are always better off using sportsbike tyres because of the feedback and the feel. Most of them are well-informed and know the advantages of using the right tyre for the bike – and that helps us protect and grow market share.

Other things we saw in 2017 in the market as a whole were the continued success of big on/off road bikes like the BMW GS and the rise in off-road in general. Motocross is really gaining momentum, and we’ve experienced that first hand with our involvement in the Michelin MX Nationals.

 So all in all, 2017 was fairly strong. One of the highlights was announcing the arrival of the Michelin Road 5. That’s been on the shelves since the start of this year, and all the signs are that it will be a fantastic product for us in 2018.

 

Pirelli Metzeler
Simon Carter, marketing manager

The tyre and scooter market has remained flat for the last three years. We have strength in depth across our range in both Pirelli and Metzeler through track, road, off-road and scooter segments.

The tyre industry mirrors the rest of the two-wheeled sector in that it is extremely competitive. It’s very important to keep ahead of the pack with product performance. Our multiple award-winning Roadtec 01 sport touring tyre has been a great success due to its versatility and public perception, and we have very confident expectations for the Diablo Rosso Corsa II for this year.

 

Maxxis International

Derek McMartin, managing director, Maxxis International UK

The tyre market is slightly down on the steady 700,000 level it held for quite some time – but not by much. Given the lower annual mileages and the fact that tyres are generally lasting longer, we’re seeing that as a positive sign of stability. Our share of sales continues to grow, being well into double-digit percentages and rising in line with our forecasts. We put this down to a number of recent product launches that have showcased the advanced performance of our products, and our dedication to giving dealers high quality tyres that offer good margin opportunities.

The creation of new products has been made possible by substantial investment into research and development and advanced manufacturing capabilities. A great example of this is our new facility, which has been specifically designed to make the next generation of motorcycle tyres.

“It’s worth noting that Maxxis is one of a very exclusive group of manufacturers making radials for two-wheel. Recent OE agreements with the likes of KTM, Yamaha and others mean we’re working closely with Japanese and European motorcycle makers to create and improve our products in much shorter time frames. We’ve done this with car manufacturers for a while now, and these joint projects are always hugely beneficial for dealers when it comes to selling the Maxxis range to consumers. The most recent example of success is our supply of original tyres for the new London Taxi, but there are many more two-wheel announcements that will be made to help invigorate the market through real innovation.

In terms of segmentation, the rise in popularity of Sports Tourers continues in line with their ever-improving performance. These tyres can now deliver levels of grip riders would have associated with Sports tyres a few years ago, while at the same time being more durable for increased mileage before replacement. In fact, they’re so good now that Sports tyres are becoming almost exclusively used for track days. The Maxxis Supermaxx ST made real waves when it was launched, and continues to be popular in this area of the market with supply fighting to keep up with demand.

Another key area of the market is off-road, and competition is fierce. We have invested heavily into technology that can perform away from the road, and have exciting developments on the horizon that we think will give us, and our riders, a real competitive edge. These are exciting times for all associated with Maxxis.

 

Avon Tyres
Gary Bretherton, motorcycle sales manager

Avon had a very successful year in 2017, with growth of 3.36% in the number of tyres sold compared with 2016. Substantial growth was achieved in the sport touring sector, where we increased sales by 29.52% with the introduction of the new Spirit ST in June 2017. This allowed us the opportunity to offer the comprehensive range of 3D X-M sport touring tyres as our tier-two offering, with great success.

This was reflected across the board with products such as the Avon 3D X-M, Bridgestone BT023, Dunlop Roadsmart, Michelin Pilot Road 3 and Metzeler Z8.

A flat, though optimistic, trading year can be partially put down to the euro exchange rate hovering around 1.10 to the pound. This makes it unattractive for end consumers to buy from Europe, which had a big impact on sales in 2015 and 2016 with lots of products being shipped from European wholesalers to end-consumers in the UK.

The distributor view

As for distributors, the claim by Cambrian Tyres to be “the UK’s largest” supplier is presumably not made lightly. It stocks all the brands you’ve ever heard of and a few you might not have. It will come as no surprise, given what others have said, that Cambrian experienced a fairly flat trading year in 2017. In fact, Cambrian marketing man Richard Hemingway was candid enough to call it dull. 

“As we don’t deal with the end user it’s hard to speculate on the effect that motorcycle ownership and rider behaviour has on the market,” says Hemingway. “But if the manufacturers have done their homework correctly we can see the results in new stock. We’ve definitely seen a wider range of tyres for the adventure market, where tyres are designed for 50/50 road and light trail use. 

“Tyres like the Conti TKC70 have done well for us and other manufacturers have followed suit – Metzeler with its Karoo Street is a good example, as are Avon’s TrekRider and the Anlas CapraR.”

Turkish brand Anlas is causing a bit of interest with its quality products, particularly in the speedway market, where it is involved in raising brand awareness with its sport promotion including, cheekily, title sponsor of the Czech Republic GP – Mitas’s home turf.

Cambrian has also seen the rise in sport touring products. “Last year we saw two manufacturers drop their street-racing radials because they were so confident in the performance of their hyper sports tyres. Likewise, sport touring tyres, with their wider performance range, are taking sales from the traditional hyper sports market.”

With the possibly confusing choice of premium performance tyres, Hemingway has seen the rise in third-tier tyre sales. “Often these can be people sticking to the OE tyres fitted to their new bike while the tyre manufacturer has moved on, and there will be a price advantage too.”

From the Cambrian perspective it would appear that in spite of the manufacturers’ hype, what dealers are actually shifting are the better value tyres from premium manufacturers rather than the latest super-silica, high-mileage, extra-grip, technical tyre.

 

Bickers

Rob Sheldon, national sales manager

There’s a lot of nervous people in the industry at the moment, concerned that it’s all doom and gloom, but we took great strides forward last year and are looking to do the same in 2018. You have to be agile in a market like this, and the recent initiatives we’ve launched around price and loyalty show we’re listening to what our dealers are saying and then acting.

In terms of how tyre manufacturers are shaping up, CST and Maxxis keep going from strength to strength. By having these two brands we are able to offer outstanding choice and value across all market sectors, including ATV, from what is potentially the biggest range in the UK. Both brands have secured great OE supply deals recently, resulting in increased profile and product awareness. With the subsequent rise in interest, our main challenge becomes ensuring dealers stay stocked. Overall global demand, especially for radials, MX and scooter tyres, limits the volume we can get hold of; and as soon as we do get these products, they tend to be straight back out of the door. This slightly contradicts the general opinion that the market is flat, but it is what we’re experiencing with these two manufacturers.

With more OE deals expected with both Japanese and European manufacturers, our view is that the brands that can balance quality, brand awareness, and margin opportunity, will continue to increase market share. When dealers are squeezed they look for what’s best for them as well as their customers, and we believe that both Maxxis and CST offer just that. Our recent, wide sweeping price restructure and Trade Club scheme satisfies both these demands.

 

Hoco Parts
Rob Morton, area sales manager

I think your comments about tyre prices going up, bikes doing fewer miles and tyres wearing better are valid points but the fact that new bike sales were significantly down while the bike parc remained static means that many riders needed to buy new tyres if they were not upgrading to a new bike.

It’s difficult to be very accurate after only two years in the UK market, but last year we experienced significant growth in the tyre market which was right across all sectors. As you’d expect, scooter tyre growth was much larger in the south than the north, but the rest was pretty even. The most significant thing I noticed was the fact that out-and-out race tyres and sports touring tyres were strong. It was less so in the sports road tyre, which to me indicates that the advances in sports touring tyres is making some riders switch from sports tyres. It also suggests there are riders who have given up altogether on the road and are using their bikes purely on the track. As you’d expect, the adventure bike market was strong both in road and off-road-biased tyres, with lots of riders looking to take these bikes off the beaten track.

Sadly, as has been the case for many years, the prices of tyres are constantly being driven down due to competition at home and from abroad, and manufacturers offering volume bonuses make it very difficult for the smaller dealers to make any profit. You’ll see just one dealer in an area getting the lion’s share of the business if they can afford to commit at the beginning of the season. Gone are the days when every dealer got a share of the market.

Off-road has been good for us, MX and enduro in equal measures to the point where some brands struggled to produce enough stock to satisfy demand.

I’m sorry if this is a bit vague, but with only two years of data the best I can say is we saw growth in every sector of just about all of our brands, which you’d expect when still getting established in the UK market.

 

Direct Distribution
Nigel Worthington

The DVLA figures might sound encouraging, but when you take into account multiple bike ownership and the fact that you can only ride one bike at a time, the number of bikes actually being used is much less. The official picture is very confusing. We’re told that the average age of motorcyclists is 51 and the only youth who are coming through are scooter riders, and that pretty much means London. At the younger ownership end, barriers for people coming into motorcycling include the high rate of theft and the complexity of the test regime. Legislation is not at all helpful to our industry.

As a distributor dealing with all the manufacturers, they seem to think it’s a never-ending market and our quotas go up every year. If the market shrinks and our targets go up, it does make you wonder where all the tyres go.

 

Bike It International

Bike It reports that sales of MX tyres and tubes have increased as it has focused more product into the off-road area. In road tyre sales Bike It has seen a drop in scooter product, mainly due to the big players carving up margins to win market share.

Sales of over-17-inch tyres have been steady as the older 1980s/90s bikes are now resurgent as classics, so the H-rated range is holding up. Bike It doesn’t stock anything further up the speed range.

We have seen margins that retailers and dealers are working on which are pitiful. Avon has offered us 5%-15% margins – a distributor can’t work on that. It seems to be that regional “distributors” are retailing premium-brand tyres themselves that are pushing down profits.

 

VE (UK)

Last year saw continued growth in tyre sales for VE (UK) in the scooter sector; up 8.5% for road tyre sales and 7.7% for race tyre sales when compared with 2016.

There has been a raft of new tyre patterns, compounds, and new sizes dedicated to the scooter market from all of the leading tyre manufacturers, as well as the less well known ones. Mitas (Sava), for example, introduced its new scooter line – the Touring Force-SC – at EICMA last November. Whitewall tyres made a big resurgence last year with offerings from Continental and Mitas proving to be the most popular. 

This continual development by the manufacturers has resulted in a wider choice for scooter riders which, in turn, has allowed them to tailor their tyre requirements to their riding style, as well as road conditions throughout the year.

With many scooter manufacturers fitting well-known brands and patterns to new scooters, VE (UK) has been able to take advantage of this market trend. Its stock reflects many of the OE-specification tyres which owners like to stick with when the time comes for replacement.

An increase of race-specific tyre sales has also been seen, with the promotion of affordable racing by the British Scooter Sport Organisation and, more specifically, VE (UK) sponsoring the Vespa production class championship.

 

WheelHouse Tyres 

Mick Cheneler, tyre manager

In 2017 sales were flat overall, reflecting the previous year, but tyre tastes were different. Off-road was strong, as was adventure. The loser was the sports tyre sector. 

There’s been a rise in popularity of the more aggressive, heavier-treaded adventure tyre like the Heidenau K37, Mitas EO7 and Michelin’s Anakee Wild and, apart from the BMW GSs, big KTMs and Africa Twins, these are going on some of the bigger single-cylinder bikes like the Yamaha XT660 too.

Part of the reason why sportsbike ownership has fallen is multiple bike ownership, and many previous sportsbike riders now have a dedicated track-day bike instead with tyres provided by special services companies affiliated to the event organisers. 

Some riders are going the other way, taking to off-road recreation [membership of the Trail Riders Fellowship has reached 5000 for the first time] and at this time of the year riders are looking for the soft compound tyres, and some manufacturers have latched on to this and some haven’t. As we don’t really get involved with smaller bikes or scooters, the mainstay of our business is sport touring tyres, which cover most of the remaining sportsbikes being used on the road and large capacity tourers and street bikes.

Being at the sharp end, we are aware of the stocking issues with the major brands. Having at least three tiers of tyres can lead to customer confusion and people walking out of the door having bought nothing. Obviously they’ll have to return before they run out of tread, but it does make the process more difficult. Then there’s the internet, where some of our naughty European manufacturers are quite happy to peddle their wares at impossibly low prices that UK retailers can’t hope to match. But because margins are so tight, if a customer walks into a dealership with a pair of tyres most dealers would be prepared to fit them, and if the customer is still getting a better deal than free-fit tyres supplied in the UK that makes turning a buck even harder.

So there are many factors influencing the tyre market at the moment. One of them is the lengths that manufacturers go to gain OE contracts (the first replacement customer choice is usually another set of OE tyres) – Mitas landing the contract for Gas Gas trial machines last year – and they pump a huge amount of technology into their two-wheel products when compared with the automotive counterparts.

With ever-increasing tyre ranges, distributors and wholesalers can struggle to get the right stock at the right time.

Motorcycle dealers, or more precisely workshop staff, are increasingly reluctant to do the “dirty” jobs like tyre changing, even though that can generate service and MoT work. That leaves customers to source their own tyres through specialist dealers or the internet. Have tyres become a necessary evil rather than an income stream? The answer may depend on whether you’re buying or selling.

 

 

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