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Goodyear sees opportunity in mature Aussie market

Join the family: Australia's large contingent of independent tyre retailers provides national chains such as Goodyear Autocare with plenty of acquisition targets.

SUV trend yet to be reflected by tyre sales as Goodyear eyes Aussie off-road boom

18 Sep 2019

GOODYEAR and Dunlop Tyres Australia has identified Australia’s trend toward SUVs and utes, as well as the strong uptake of all-terrain and mud tyres, as factors helping offset slow volume increases in what is a mature and saturated market.


Pockets of population growth in areas such as South East Queensland, Townsville and parts of Melbourne and Sydney, also present areas of opportunity.


Speaking with GoAuto at the Wrangler AT SilentTrac launch in Brisbane this week, Goodyear and Dunlop Tyres Australia vice president of retail Scott Wood described the Australian tyre retail market as “buoyant and strong,” predicting the consumer segment to grow 1.3 per cent this year.


By contrast, Goodyear and Dunlop Tyres Australia head of consumer products and market insights Raelene Smith said the all-terrain tyre segment that accounts for 16 per cent of the total market is growing 8.0 per cent, while the more niche mud tyre segment that occupies a 2.0 per cent market share is growing even faster.


“We’re seeing that come through from the vehicles we have in the car park,” she said.


“In fact, with a lot of Toyota HiLuxes and Ford Rangers, you do see the consumer swapping out the tyre that the vehicle comes with and just speccing it up, so they’re making the change before they even have to replace it.”


Meanwhile, Ms Smith said highway tyres in the SUV and 4x4 segments are outstripping the broader industry with 3.0 per cent growth, with the overall SUV and 4x4 replacement tyre market is up 6.0 per cent.


She said an “opportunity to sell a hell of a lot of tyres” existed in the lag between sales of replacement tyres for SUVs and utes and uptake of these vehicles in the Australian new-car market.


SUVs have outsold passenger cars here since 2017 and year-to-date combined SUV and ute sales account for 65 per cent of the total light vehicle market. As a backdrop to this, according to Ms Smith, replacement tyre sales in these combined categories currently make up just 33 per cent of the total – or around 4.6 million units.


“We are seeing a shift in the type of tyres consumers need and what they’re looking for in tyres, so it’s important that we keep up with them,” she said.


“Who would have ever foreseen pick-ups being number one and two? But Aussies love them.”


Ms Smith agreed that compared with a lot of passenger car customers for whom replacement tyres are often a grudge purchase, 4x4 tyre customers looking to upgrade were “more engaged”.


“They really understand the difference the performance can make in terms of their driving, she said.


“In a lot of cases this is someone who might get highway tyres and then swap them out because they realise they need something a bit stronger and durable and be willing to pay the money to get that.”


From a retailing perspective, Mr Wood said the number of independent tyre outlets meant there was “still opportunity for some of the major retail brands to grow from acquisition” and that population growth in some areas also held promise.


“Australia’s population is still growing strongly in pockets, so there’s still opportunity for network growth in those corridors where new houses and shopping centres are being built,” he said.


“Is there consolidation happening? Not so much. I think it’s becoming more difficult to make money in the industry; margins are being squeezed constantly.”

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