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Tires and Rims - US - March 2013

“For the first time since World War II, Americans are driving less. While the tire industry is currently benefiting from the release of pent-up demand, the aging population and the subsequent lack of enthusiasm from young people to drive could end up impacting tire sales if these two groups buy less frequently, or not at all. Incorporating more technologies into a tire that allows the product to withstand the elements longer, or informing consumers about “dry rot,” may become more important marketing tools for tire manufacturers over time.”

– Colin Bird, Automotive Analyst

Some questions answered in this report include:

  • How can tire makers cope with aging Baby Boomers and apathetic Millennials?
  • How will consumers, and the tire industry, react to the expiration of U.S. sanctioned tariffs against Chinese tires?

 

In this report, Mintel explores the tires and rims market in the U.S., and provides insight into the external and internal factors that influence tire and rim purchases, and trends within the tires and rims market. Mintel also will provide insight into what these various factors mean for future sales, marketing and advertisements, and industry innovations.

The report covers passenger (P-metric) and light truck (LT-metric) tires. Sales of passenger and light truck replacement tires in the U.S. declined slightly in 2012, to $29.8 billion, down from $30.1 billion in 2011. As the economy continues to improve, Mintel expects modest growth in the replacement tire industry.

Major themes throughout this report include: consumer awareness of name brand tires, the importance of origin of tires to consumers (as tariffs against Chinese-made tires are lifted), the importance of tire durability and tread wear warranties, and the importance of emerging features in premium brand tires, such as run-flat technology, tire pressure monitoring, and low-rolling resistance tires. Additionally, Mintel profiles major tire retailers and analyzes tire retail distribution and marketing, including sales of OE fitments, private label brand tires, and name brand tires. This report explores how tire makers and tire retailers can position themselves in a market where Millennials and Baby Boomers are driving less, which will ultimately impact volume growth.

For the purpose of this report, Mintel uses the following definitions:

As defined by this report, the replacement tire market are those sold for passenger cars and light trucks, including all subcompact , compact , midsized, or full-sized sedans, hatchbacks, or convertibles; compact, midsized, or full-sized truck-based SUVs; compact, midsized, or full-sized car-based crossovers; minivans or MPVs; compact, midsized, or full-sized pickup trucks or vans; any type of hybrid electric, electric, or alternatively fueled vehicle; any type of luxury vehicle; any type of classic car; or any variation above, so long as it’s for noncommercial usage. The rim market are rims that are sold as new rims for passenger motor vehicles, the same as defined and outlined for the replacement tire market. This report also excludes the following:

  • Used and retreaded tires
  • Tires sold for public service vehicles, motorcycles, bicycles, and nontravel-related vehicles including race cars, go-carts, buses, planes, trailers, race cars, golf carts, commercial hauling trucks and vans, and building construction vehicles.

 

 

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Table of contents

  1. Scope and Themes

    • What you need to know
      • Definition:
        • Data sources
          • Sales data
            • Consumer survey data
              • Advertising creative
                • Abbreviations and terms
                  • Abbreviations
                    • Terms
                    • Executive Summary

                        • The market
                          • Figure 1: Fan chart forecast of total retail sales of passenger tires in the U.S. and Canada, at current prices, 2007-17
                        • Market factors
                          • Miles driven critical to consumer replacement tire demand
                            • Figure 2: Miles driven on U.S. roads, all vehicles, 2001-12
                          • Aging vehicle fleet creates opportunity for consumer replacement tire market
                            • Figure 3: Average age of cars, light trucks, and total light vehicles, 1995-2011
                          • Higher taxes may impede short-term growth of consumer spending
                            • Low consumer confidence causes purchase deferment
                              • Figure 4: Consumer confidence vs. consumer replacement tire sales, 2007-12
                            • Key players
                              • Three tire makers control more than two-thirds of the market
                                • Figure 5: Share of value sales of new tire sales, including passenger tires, light-truck tires, truck tires, farm tires, and off-the-road (OTR) tires, in the U.S. and Canada, by manufacturer, 2011 and 2012
                              • Tire retailing dominated by independent tire dealers
                                • Figure 6: U.S. share of value sales of passenger tires, by retail channel, 2012
                              • The consumer
                                • Two years an average cycle for new tire purchase
                                  • Figure 7: When tires and rims were last purchased, December 2012
                                • Nearly two-thirds of tire buyers purchased four tires last year
                                  • Figure 8: Number of new passenger car and light truck tires purchased in the last year, August 2011-August 2012
                                • Millennials more likely to buy major name brands
                                  • Figure 9: Tire brand bought in past year, Millennials vs. non-Millennials, December 2012
                                • Low-rolling resistant and run-flat tires valued, but not by all
                                  • Figure 10: Tire buying habits and sentiments, by gender, December 2012
                                • What we think
                                • Issues in the Market

                                    • How can tire makers cope with aging Baby Boomers and apathetic Millennials?
                                      • How will consumers, and the tire industry, react to the expiration of U.S. sanctioned tariffs against Chinese tires?
                                      • Insights and Opportunities

                                        • Warmer winters creates opportunity for safety messaging and tire rentals
                                          • Tire makers need to simplify product branding through tiered product menus
                                            • Figure 11: Intel Processor configurator, February 2013
                                        • Trend Applications

                                            • Trend: Green and Lean
                                              • Trend: Return to the Experts
                                                • Mintel Futures: Brand Intervention
                                                • Market Size and Forecast

                                                  • Key points
                                                    • Consumer replacement tire sales decline 1% in 2012
                                                      • Figure 12: Total U.S. retail sales of passenger and light truck tires, at current prices, 2007-17
                                                      • Figure 13: Total U.S. retail sales of passenger and light truck tires, at inflation-adjusted prices, 2007-17
                                                    • Fan chart forecast
                                                        • Figure 14: Fan chart forecast of total retail sales of passenger tires in the United States and Canada, at current prices, 2007-17
                                                    • Market Segmentation

                                                      • Key points
                                                        • Passenger tires
                                                          • Figure 15: Total U.S. retail sales of passenger tires, at current prices, 2007-17
                                                          • Figure 16: Total U.S. retail sales of passenger tires, at inflation-adjusted prices, 2007-17
                                                        • Light truck tires
                                                          • Figure 17: Total U.S. retail sales of light truck tires, 2007-17
                                                          • Figure 18: Total U.S. retail sales of light truck tires, at inflation-adjusted prices, 2007-17
                                                      • Market Drivers

                                                        • Key points
                                                          • Aging U.S. vehicle fleet creates opportunity for replacement tire manufacturers
                                                            • Figure 19: Average age of cars, light trucks and total light vehicles in the U.S., 2000-11*
                                                          • American drivers continue to drive fewer miles than peak period, weakening consumer demand
                                                            • Figure 20: Miles driven on U.S. roads, all vehicles, 2001-12
                                                          • Popular vehicle introductions influence popularity of specific tire sizes
                                                              • Figure 21: Top 15 bestselling cars, 2011-12
                                                            • New car sales positively impact overall tire sales, has long term positive effect on replacement tire market
                                                              • Figure 22: New car sales vs. original equipment tire sales, 2007-12
                                                            • Higher taxes may impede short-term growth of consumer spending
                                                              • Low consumer confidence causes purchase deferment
                                                                • Figure 23: Consumer confidence vs. consumer replacement tire sales, 2007-12
                                                            • Retail Channels

                                                              • Key points
                                                                • Retailing overview
                                                                    • Figure 24: U.S. sales of passenger tires, by retail channel, 2007-12
                                                                    • Figure 25: Indexed growth of U.S. sales of passenger tires, by retail channel, 2007-12
                                                                    • Figure 26: U.S. share of sales of passenger tires, by retail channel, 2007-12
                                                                  • Retailer profiles
                                                                    • TBC Corporation
                                                                      • Discount Tire Co. Inc.
                                                                        • Walmart Stores, Inc.
                                                                          • Sears Automotive
                                                                            • Figure 27: Sears RoadHandler™ Tires, December 2012
                                                                          • Costco Wholesale Corporation
                                                                            • Sam's Club
                                                                              • Firestone Complete Auto Care
                                                                                • Goodyear Tire & Service
                                                                                  • Auto dealerships
                                                                                    • Pep Boys
                                                                                      • Figure 28: Pep Boys tire buying guide, 2012
                                                                                      • Figure 29: Pep Boys sales break down, 2010-12
                                                                                    • TireRack.com
                                                                                    • Leading Companies

                                                                                      • Key points
                                                                                        • Company overview
                                                                                          • Three tire makers control over two thirds of the U.S./Canadian market
                                                                                            • Figure 30: Value sales of new tire sales, including passenger tires, light truck tires, truck tires, farm tires, and OTR tires, in the U.S. and Canada, by manufacturer, 2011 and 2012
                                                                                            • Figure 31: Unit sales of U.S. replacement passenger and truck tires, by manufacturer brand, 2012
                                                                                          • Goodyear and Michelin continue to dominate HP/UHP sales
                                                                                            • Figure 32: Market share of HP/UHP tires, by manufacturer, 2012
                                                                                          • Company profiles
                                                                                            • Bridgestone Americas, Inc.
                                                                                              • Company facts
                                                                                                • Figure 33: Bridgestone Firestone annual sales in the U.S. and Canada for passenger tires, light truck tires, truck tires, farm tires, and OTR tires, at current prices, 2006-12
                                                                                              • Goodyear Tire and Rubber Company
                                                                                                • Company facts
                                                                                                  • Figure 34: 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, 2006-12
                                                                                                • Michelin North America Inc.
                                                                                                  • Michelin consolidates regular passenger tire portfolio into “Defender” brand
                                                                                                    • Company facts
                                                                                                      • Figure 35: 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, 2006-12
                                                                                                    • Cooper Tire & Rubber Co.
                                                                                                      • Company facts
                                                                                                        • Figure 36: 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, 2006-12
                                                                                                      • Continental Tire the Americas, LLC
                                                                                                        • Company facts
                                                                                                          • Figure 37: 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, 2006-12
                                                                                                      • Innovations and Innovators

                                                                                                        • Michelin introduces super long-lasting passenger tire; 90,000 miles under warranty
                                                                                                            • Figure 38: Michelin Defender, April 2012
                                                                                                          • Nonpneumatic (airless) tires finally go on sale, could eventually reshape the tire industry
                                                                                                            • Figure 39: Michelin X-Tweel SSL, October 2012
                                                                                                        • Marketing Strategies

                                                                                                          • Overview of the brand landscape
                                                                                                            • Strategy: Direct mail engages, informs, and carries offers
                                                                                                              • Mr. Tire’s origami-style approach
                                                                                                                • Figure 40: Mr. Tire Auto Service Centers, sales/service promotions, direct mailer, January 2013
                                                                                                              • Education to drive sales
                                                                                                                • Figure 41: Mr. Tire Auto Service Center, Scheduling maintenance, direct mailer, February 2013
                                                                                                              • Strategy: Play on motorsports expertise
                                                                                                                • Figure 42: Goodyear “demanding customers” TV ad, February 2013
                                                                                                              • Strategy: Sears leverages brand familiarity with trustworthiness
                                                                                                                • Figure 43: Sears Auto Center “This is the exception to the rule” TV ad, September 2012
                                                                                                              • Strategy: Tires are part of a smart lifestyle and being a savvy consumer
                                                                                                                • Figure 44: Cooper Tires “Rolling Tire Portrait” TV ad, April 2012
                                                                                                              • Proper tire care is the smart and easy thing
                                                                                                                • Figure 45: 2013 Nissan Altima “enough” TV ad, July 2012
                                                                                                              • Michelin emphasis the “right tires” as most important attribute of safety and fuel efficiency
                                                                                                                • Figure 46: Michelin “Right tires change everything” TV ad, July 2012
                                                                                                            • Time of Last Tire and Rim Purchase

                                                                                                              • Key points
                                                                                                                • Two years an average cycle for new tire purchase; four tires bought
                                                                                                                  • Figure 47: When tires and rims were last purchased, December 2012
                                                                                                                • Nearly two-thirds of tire buyers purchased a complete set of four tires
                                                                                                                  • Figure 48: Number of new passenger car tires purchased in the last year, August 2011-August 2012
                                                                                                                  • Figure 49: Number of new pickup/SUV/van tires purchased in the last year, August 2011-August 2012
                                                                                                                • The average tire purchase totaled nearly $370 in 2012
                                                                                                                  • Figure 50: Total spend on new tires within the last year, by household income, August 2011-August 2012
                                                                                                                • Women less likely than men to have ever personally purchased tires or rims
                                                                                                                  • Figure 51: When tires and rims were last purchased, by gender, December 2012
                                                                                                                • Household income not a significant determinant of frequency of purchase
                                                                                                                  • Figure 52: When tires and rims were last purchased, by household income, December 2012
                                                                                                                  • Figure 53: Number of new passenger car tires purchased in the last year, by household income, August 2011-August 2012
                                                                                                                  • Figure 54: Number of new pickup/SUV/van tires purchased in the last year, by household income, August 2011-August 2012
                                                                                                                • Millennials most likely to purchase rims or tire and rim packages
                                                                                                                  • Figure 55: When tires and rims were last purchased, by generation, December 2012
                                                                                                                • Households with dependent children more likely to purchase tires
                                                                                                                  • Figure 56: When tires and rims were last purchased, by marital status and presence of children in household, December 2012
                                                                                                              • Where Tires and Rims Are Purchased

                                                                                                                • Key points
                                                                                                                  • Grouping classification
                                                                                                                    • Discount Tire most popular tire store followed by Walmart
                                                                                                                      • Figure 57: Automotive retail store shopped at for tires within the last year, August 2011-August 2012
                                                                                                                    • Men more inclined to shop at retailers that specialize in tires
                                                                                                                      • Figure 58: Where last set of tires were purchased, by gender, December 2012
                                                                                                                    • Those in the South and West more likely to purchase from tire specialty stores
                                                                                                                      • Figure 59: Where last set of tires were purchased, by region, December 2012
                                                                                                                    • Millennials least likely to shop at tire specialty stores
                                                                                                                      • Figure 60: Where last set of tires were purchased, by generation, December 2012
                                                                                                                    • Rims and wheel packages most likely to be purchased at car dealers
                                                                                                                      • Figure 61: Where last set of rims were purchased, by gender, December 2012
                                                                                                                      • Figure 62: Where the last tires and rims package were bought, by gender, December 2012
                                                                                                                    • Niche tire brands more popular at tire-centric stores
                                                                                                                      • Figure 63: Where last set of tires were purchased, by tire brand ever bought, December 2012
                                                                                                                      • Figure 64: Where last set of tires were purchased, by tire brand ever bought, December 2012 (continued)
                                                                                                                  • Brand Familiarity of Purchased Tires and Rims

                                                                                                                    • Key points
                                                                                                                      • Dubious correlation between awareness and purchase
                                                                                                                          • Figure 65: Purchase of and familiarity with tire brands, December 2012
                                                                                                                        • Asian and European tire brands bought more often by higher income households
                                                                                                                          • Figure 66: Tire brand bought in past year, by household income, December 2012
                                                                                                                        • Millennials more likely to buy major name brands
                                                                                                                          • Figure 67: Tire brand bought in past year, by generation, December 2012
                                                                                                                        • Major brand names purchased by wealthier households
                                                                                                                          • Figure 68: Tire brands ever bought, by household income, December 2012
                                                                                                                        • Niche Asian and European brands more popular with Millennials
                                                                                                                          • Figure 69: Tire brands ever bought, by generation, December 2012
                                                                                                                        • Smaller tire brands have poor awareness with women
                                                                                                                          • Figure 70: Tire brand purchased or familiar with, by gender, December 2012
                                                                                                                        • Uniroyal, BFGoodrich suffer in brand awareness with Millennials
                                                                                                                          • Figure 71: Tire brand purchased or familiar with, by generation, December 2012
                                                                                                                        • Michelin performance car and minivan owners; specialty tire brands to performance and light truck owners
                                                                                                                          • Figure 72: Tire brand ever bought, by household ownership or leasing of vehicle(s), December 2012
                                                                                                                      • Brand Familiarity with Original Equipment Tires

                                                                                                                        • Key points
                                                                                                                          • One-third of respondents don’t know what brand of tires came with their car when purchased
                                                                                                                            • Figure 73: Tire brand that came with household car, by household income, December 2012
                                                                                                                          • Millennials more attentive to brand of OE fitments
                                                                                                                            • Figure 74: Tire brand that came with household car, by generation, December 2012
                                                                                                                        • Effective Messaging For Promotional Tire Deals

                                                                                                                            • Key points
                                                                                                                              • No single offer stands out, but 4 for the price of 3 preferred
                                                                                                                                • Figure 75: Effective messaging for promotional tire deals, by gender, December 2012
                                                                                                                              • Stark differences in promotional interest by age and gender
                                                                                                                                • Figure 76: Effective messaging for promotional tire deals, by gender and age, December 2012
                                                                                                                            • Tire and Rim Buying Habits and Sentiments

                                                                                                                              • Key points
                                                                                                                                • Grouping classification
                                                                                                                                  • Warranties valued, but not by all
                                                                                                                                    • Figure 77: Tire and rim buying habits and sentiments, by gender, December 2012
                                                                                                                                  • Nearly half of men aged 55+ said they would buy only longer lasting tires
                                                                                                                                    • Figure 78: Tire and rim buying habits and sentiments, by gender and age, December 2012
                                                                                                                                  • Wealthier households most interested in tire innovations
                                                                                                                                    • Figure 79: Tire and rim buying habits and sentiments, by household income, December 2012
                                                                                                                                  • Broad appeal for tire innovations among all generation groups
                                                                                                                                    • Figure 80: Tire and rim buying habits and sentiments, by generation, December 2012
                                                                                                                                  • Unmarried women look for advice from tire dealers and retailers
                                                                                                                                    • Figure 81: Tire and rim buying habits and sentiments, by gender and marital status, December 2012
                                                                                                                                  • Sentiments by last tire bought reflect some consumer confusion
                                                                                                                                    • Figure 82: Tire and rim buying habits and sentiments, by tire brand ever bought, December 2012 (part 1)
                                                                                                                                    • Figure 83: Tire and rim buying habits and sentiments, by tire brand ever bought, December 2012 (part 2)
                                                                                                                                • Impact of Race and Hispanic Origin

                                                                                                                                  • Key points
                                                                                                                                    • Hispanic, blacks most likely to have purchased tires in last year and likeliest to have purchased new rims
                                                                                                                                      • Figure 84: When tires and rims where last purchased, by race/Hispanic origin, December 2012
                                                                                                                                    • Hispanic households buy the most car tires
                                                                                                                                      • Figure 85: Number of new car tires purchased in the last year, by race/Hispanic origin, August 2011-August 2012
                                                                                                                                      • Figure 86: Number of new pickup/SUV/van tires purchased in the last year, by race/Hispanic origin, August 2011-August 2012
                                                                                                                                    • Blacks and Hispanics spend the least on tires
                                                                                                                                      • Figure 87: Total spend on new tires within the last year, by race/Hispanic origin, August 2011-August 2012
                                                                                                                                    • Blacks more likely to buy tires at big box retailers, blacks and Hispanics frequent auto parts store relatively more
                                                                                                                                      • Figure 88: Where last set of tires were purchased, by race/Hispanic origin, December 2012
                                                                                                                                    • Blacks respond more favorably to “free installation with purchase”
                                                                                                                                      • Figure 89: Effective messaging for promotional tire deals, by race/Hispanic origin, December 2012
                                                                                                                                    • Goodyear dominates, even more so among Hispanics
                                                                                                                                      • Figure 90: Tire brand bought in past year, by race/Hispanic origin, December 2012
                                                                                                                                  • Appendix – Other Useful Consumer Tables

                                                                                                                                    • Household vehicle ownership
                                                                                                                                      • Figure 91: Type of vehicle owned, by household ownership or leasing of vehicles, December 2012
                                                                                                                                    • Time of last tire and rim purchase
                                                                                                                                      • Figure 92: When tires and rims where last purchased, by region, December 2012
                                                                                                                                      • Figure 93: Total spend on new car tires within the last year, by type of passenger car tires, August 2011-August 2012
                                                                                                                                      • Figure 94: Total spend on new pickup/SUV/van tires within the last year, by type of pickup/SUV/van tires, August 2011-August 2012
                                                                                                                                      • Figure 95: Number of new car tires purchased in the last year, by region, August 2011-August 2012
                                                                                                                                      • Figure 96: Automotive retail store shopped at within the last year, August 2011-August 2012
                                                                                                                                      • Figure 97: Automotive retail store shopped at for tires within the last year, August 2011-August 2012
                                                                                                                                    • Where tires and rims are purchased
                                                                                                                                      • Figure 98: Where last set of tires were purchased, by household income, December 2012
                                                                                                                                      • Figure 99: Automotive retail store shopped at within the last year, August 2011-August 2012
                                                                                                                                    • Brand familiarity of purchased tires
                                                                                                                                      • Figure 100: Tire brand bought prior to last year, by household income, December 2012
                                                                                                                                      • Figure 101: Tire brand bought prior to last year, by race/Hispanic origin, December 2012
                                                                                                                                      • Figure 102: Tire brand bought prior to last year, by generation, December 2012
                                                                                                                                      • Figure 103: Tire brand never bought but familiar with, by household income, December 2012
                                                                                                                                      • Figure 104: Tire brand never bought but familiar with, by race/Hispanic origin, December 2012
                                                                                                                                      • Figure 105: Tire brand never bought but familiar with, by generation, December 2012
                                                                                                                                      • Figure 106: Tire brand purchased or familiar with, by household income, December 2012
                                                                                                                                      • Figure 107: Tire brand purchased or familiar with, by gender and age, December 2012
                                                                                                                                      • Figure 108: Tire brand purchased or familiar with, by region, December 2012
                                                                                                                                    • Brand familiarity with original equipment tires
                                                                                                                                      • Figure 109: Tire brand that came with household car, by type of vehicle owned , December 2012
                                                                                                                                    • Effective messaging for promotional tire deals
                                                                                                                                      • Figure 110: Effective messaging for promotional tire deals, by generation, December 2012
                                                                                                                                    • Tire and rim buying habits and sentiments
                                                                                                                                      • Figure 111: Tire and rim buying habits and sentiments, by education, December 2012
                                                                                                                                      • Figure 112: Tire and rim buying habits and sentiments, by tire brand that came with household car, December 2012
                                                                                                                                    • Impact of race and Hispanic origin
                                                                                                                                      • Figure 113: Tire brand that came with household car, by race/Hispanic origin, December 2012
                                                                                                                                      • Figure 114: Tire brands ever bought, by race/Hispanic origin, December 2012
                                                                                                                                      • Figure 115: Tire brand purchased or familiar with, by race/Hispanic origin, December 2012
                                                                                                                                  • Appendix – Trade Associations

                                                                                                                                    Companies Covered

                                                                                                                                    • Bridgestone/Firestone Retail & Commercial Operations LLC
                                                                                                                                    • Chrysler LLC
                                                                                                                                    • Dunlop Slazenger Group Ltd
                                                                                                                                    • Michelin North America Inc.
                                                                                                                                    • Rubber Manufacturers Association (RMA)
                                                                                                                                    • Sumitomo Corporation
                                                                                                                                    • The Goodyear Tire & Rubber Company
                                                                                                                                    • U.S. Bureau of the Census
                                                                                                                                    • US Department of Commerce
                                                                                                                                    • Walmart Stores (USA)

                                                                                                                                    Tires and Rims - US - March 2013

                                                                                                                                    US $3,995.00 (Excl.Tax)