Leading tire manufacturers are considering digital solutions as one of the promising means to sell tires directly to customers at competitive prices. The adoption of e-commerce platform is featuring as a tool to check the competition that is particularly exposed by Asian imported tires in the market of the US and Europe.
Through e-retailing platform, tire manufacturers offer fiercely competitive price of the tire which is estimated to be up to 40% less than that of traditional or offline tire retailers. This is quite effective to attract those customers who prefer imported ones over the premium or mid-range brands just because of price constraints.
In order to tap into the opportunity presented by e-retailing in the space of tire sales, many tire manufacturers have developed their own e-commerce platforms. But, the US-based Goodyear was the one to take the lead in 2015. Its initiation resulted commendable feedback from online customers’ end as it (Goodyear) has been adding value to the service along with the sales of tire at competitive prices.
Witnessing its (online platform) gradual impact and influence on tire buyers, Bridgestone Americas, Michelin North America, etc. have also jumped on e-commerce platform.
Inspired by tire customers’ online research—which according to a survey is over 80%—and their new purchase habits, Bridgestone Americas has acquired TireConnect Systems. The system has been generating millions of tire searches with over thousands of quotes for Bridgestone resulting significant increase in sales. Similarly, Michelin North America initiated online tire sales since 2016 which it planned to expand throughout the country in the years ahead.
Why leading tire manufacturers are opting e-retailing in tire sales sphere?
The low-cost imports of tires in the Europe and the US from Asia is pushing tire manufacturers to have their own e-commerce platform so that they can compete with the price of imported products by eliminating middlemen. The import of low price tires is severely denting the market of premium tire brands like Goodyear, Micheline and mid-range brand like Continental. The low price of such tires (imported) is attractive for the customers and lucrative for dealers as they get higher margins while selling imported ones than premium replacement tires.
The emergence of e-commerce platform is not just a new way of selling tires for tire manufacturers rather is also featuring as a promising tool to check competition especially with imported ones.
Hence, to remain viable in the market, almost all of the premium and mid-range tire brands are expected to develop their own e-commerce platforms. And in the case of the US, this has become critical as tires imported from Asia, particularly China, have already captured large market share of the country.
For more information on “Future of Tire Retailing in North America and Europe, Forecast to 2023” please visit https://store.frost.com/future-of-tire-retailing-in-north-america-and-europe-forecast-to-2023.html
Subarna Poudel is a researcher with Frost & Sullivan. He can be reached at firstname.lastname@example.org
Sapan Agarwal drives content and marketing for Frost & Sullivan. Sapan is based out of Kuala Lumpur Malaysia and can be reached at email@example.com | +603 6204 5830