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Tires - China - June 2016

“Despite the pressure on supply side, domestic passenger car tire market is expected to thrive again, driven by continuous growing car parc and increasingly knowledgeable consumers. Opportunity lies in providing professional consulting service through both online and offline channels, as well as applying differentiated marketing strategy based on target audiences’ lifestage and residential area.”
– Aaron Guo, Senior Research Analyst, China

This report answers the following questions:

  • Where is the future for local tire manufacturers?
  • What is the right strategy for online presence?
  • How to market effectively and efficiently?

China’s domestic passenger car tire market encountered a turning point in 2015. External trade barriers together with fierce internal rivalry have left sinister remarks on the coming path. The era of ‘production means everything’ is gone for good. To what extent tire manufacturers now meet the demands of China’s market decides how far they could roll on. The good news is, car owners in China are showing traceable patterns on replacement tire shopping, which offers opportunities for brands to corner the market through multiple strategies. This report will look into the opportunities and discuss the related implications.

For the purposes of this report, Mintel has used the following definition for tires:

Tires for passenger cars, including but not limited to all subcompact, compact, midsized, or full sized sedans; compact, midsized, or full sized SUVs; compact, midsized, or full sized car-based crossovers; compact, midsized, or full sized pickup trucks or vans; minivans or MPVs; any type of hybrid electronic, electronic or alternatively fuelled vehicle or any type of luxury vehicle.

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Table of contents

  1. Overview

    • What you need to know
      • Covered in this report
      • Executive Summary

          • The market
            • Figure 1: China passenger car tire market volume forecast, 2016-21
          • Companies and brands
            • Figure 2: China tire market share, by total production volume, 2013-15
            • Figure 3: China PCR tire market share, by sales value, 2015
          • The consumer
            • Figure 4: Tire purchase consideration factors, weighted average of importance, November 2015
            • Figure 5: Average price willing to pay for one tire, by car owner groups, November 2015
            • Figure 6: Tire purchase channel perception, November 2015
            • Figure 7: Tire purchase channel preferences of different car owners, by car price, November 2015
            • Figure 8: Tire purchase channel perception comparison, by car owner groups, November 2015
            • Figure 9: Relationship between pre-sales consulting service satisfaction and tire price, November 2015
            • Figure 10: Tire purchase consideration factors, by age group, of total saying “very important” and “important”, November 2015
            • Figure 11: Average unit price of tires willing to pay, by city, November 2015
            • Figure 12: Brand awareness and penetration, November 2015
            • Figure 13: Brand penetration and average price willing to pay for one tire, November 2015
            • Figure 14: Selected brand penetration across cities, November 2015
          • What we think
          • Issues and Insights

            • Where is the future for local tire manufacturers?
              • The facts
                • The implications
                  • What is the right strategy for online presence?
                    • The facts
                      • The implications
                        • How to market effectively and efficiently?
                          • The facts
                            • The implications
                            • The Market – What You Need to Know

                              • Stagnation in market growth
                                • Multiple barriers
                                  • Yet more market drivers
                                    • Market to thrive again
                                    • Market Size and Forecast

                                      • A dominant player of world tire market
                                        • Slowing down production
                                          • Figure 15: China passenger car tire production volume, 2011-15
                                        • Estimated to thrive again
                                          • Figure 16: China passenger car tire market volume forecast, 2016-21
                                      • Market Factors

                                        • Supply-side structural reformation
                                          • Overseas import investigations
                                              • Figure 17: China passenger car tire exportation volume, 2012-16 (est)
                                            • The growth in car sales
                                              • Figure 18: China new passenger car sales volume forecast, 2016-20
                                            • The awareness of drivers
                                              • The developing online tire sales platforms
                                              • Key Players – What You Need to Know

                                                • Overseas brands rule passenger car tire market
                                                  • Channel integration
                                                    • Comprehensive marketing activities by market leaders
                                                      • Feature reinforcement or product revolution
                                                      • Market Share

                                                        • The glory of local players in production
                                                          • Figure 19: China tire market share, by total production volume, 2013-15
                                                        • Overseas brands rule in sales
                                                          • Figure 20: China PCR tire market share, by sales value, 2015
                                                      • Competitive Strategies

                                                        • Sports sponsorship
                                                          • Online retailing
                                                            • Product segmentation
                                                              • Social media campaigns
                                                              • Who’s Innovating?

                                                                • Revolutionary product
                                                                  • Go smart
                                                                    • Crossover marketing
                                                                      • Leveraging the influence of KOL
                                                                      • The Consumer – What You Need to Know

                                                                        • Quality over price
                                                                          • Low switching costs between channels
                                                                            • Yet channels are perceived distinctively
                                                                              • Target the right age group
                                                                                • Pay attention to regional difference
                                                                                • Tire Price

                                                                                  • Experienced drivers tend to buy better tires
                                                                                    • Figure 21: Average price willing to pay for one tire, by car owner groups, November 2015
                                                                                  • Geographic reasons affect tire selection
                                                                                    • Figure 22: Average unit price of tires willing to pay, by city, November 2015
                                                                                • Purchase Channels

                                                                                  • Traditional stores remain in high consideration
                                                                                    • Figure 23: Tire purchase channel consideration, November 2015
                                                                                  • Nearly half are willing to try internet purchase
                                                                                    • Channel preference varies
                                                                                      • Figure 24: Tire purchase channel preferences of different car owners, by car price, November 2015
                                                                                    • Limited channel loyalty
                                                                                    • Channel Perception

                                                                                      • Clear differences perceived
                                                                                        • Figure 25: Tire purchase channel perception, November 2015
                                                                                      • Luxury car owners prefer offline channels
                                                                                        • Figure 26: Tire purchase channel perception comparison, by car owner groups, November 2015
                                                                                      • Pre-sales consulting service drives online sales
                                                                                        • Figure 27: Relationship between pre-sales consulting service satisfaction and tire price, November 2015
                                                                                    • Key Consideration Factors

                                                                                      • Safety as top concern
                                                                                        • Figure 28: Tire purchase consideration factors, weighted average of importance, November 2015
                                                                                      • More products with discounts are expected from online channels
                                                                                        • Focus on features varies by cities
                                                                                          • Diversified demands of age groups
                                                                                            • Figure 29: Tire purchase consideration factors, by age group, of total saying “very important” and “important”, November 2015
                                                                                        • Brand Awareness and Penetration

                                                                                          • Marketing efforts pay off
                                                                                            • Figure 30: Brand awareness and penetration, November 2015
                                                                                          • Be selective on cities
                                                                                            • Figure 31: Selected brand penetration across cities, November 2015
                                                                                          • Different stages of brands
                                                                                              • Figure 32: Brand penetration and average price willing to pay for one tire, November 2015
                                                                                          • Attitudes towards Tires

                                                                                            • Better understandings on tires
                                                                                              • Figure 33: Attitudes towards tires, November 2015
                                                                                            • Brand selection changes with channel
                                                                                              • Figure 34: Attitudes towards tires, by channel, November 2015
                                                                                          • The Consumer – Meet the Mintropolitans

                                                                                            • Higher online purchase willingness
                                                                                              • More demanding than others
                                                                                                • Figure 35: Tire purchase consideration factors, by mint and non-mint, November 2015
                                                                                              • Better knowledge on tires
                                                                                              • Appendix – Market Size and Forecast

                                                                                                  • Figure 36: China PCR tire market size and forecast, 2011-21
                                                                                              • Appendix – Methodology and Abbreviations

                                                                                                • Methodology
                                                                                                  • Fan chart forecast
                                                                                                    • Abbreviations

                                                                                                    Companies Covered

                                                                                                    To learn more about the companies covered in this report please contact us.

                                                                                                    Tires - China - June 2016

                                                                                                    £3,273.18 (Excl.Tax)