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The Time of Redefining Tyre Brand Boundaries

13 December 2013 772 views No Comment

Ashley Croft, in his farewell speech as the chairman of the Tyre Wholesaler Group, captured the precise spirit of the tyre industry this year. The speech covered crucial aspects like labelling, part worn tyres and the measures that UK tyre industry will take to enhance the availability of important market data. The most striking question that he raised though was the actual definition of a “premium” tyre.

The Time of Redefining Tyre Brand Boundaries

The “Premium” Tyres Debate

The leading market research institute, GfK, has revealed in its latest market stats for the UK tyre retail market that the share for premium tyres has fallen by 30%. This revelation fuelled the debate about the exact definition of “premium” tyres.

Focusing on the phrase “premium tyres”, it has to be admitted that some have even contested the very existence of this title. They prefer calling it “heritage brands”. They argue that these brands are either more established or have more experience in the field. The tyre manufacturing standards are growing across the world, and with that happening, quality is no longer the key characteristic that defines a “premium tyre”.

They do sound credible from a certain angle, but they also have to agree that not all “heritage brands” are there at the top competing on quality. Some are placed in the middle and even towards the bottom. The phrase, hence, might, in an oblique way, be used to refer to old-fashioned tyre brands.

Another argument is that the plant layouts of certain leading European names may fall short of being optimal, while the critics might still describe those as optimal. And even the EU labelling legislation might fail to differentiate “premium” brand products from less pricier versions of competitors. But the R&D budgets of top brands overshadow those of fledgling brands. Such a futuristic approach cannot be described as old-fashioned; indeed leading and established brands are the ones that pioneer most of the latest technological developments.

The Influence of Large and Wealthy Brands

Well, most, but definitely not all. Today, the players at the top of the so-called “mid-range segment” have the strongest point for redefining premium brands. Like Ashley Croft mentioned in his November TWG speech, the best Korean, Japanese and even Chinese manufacturers (not in the overall top five) are bagging OE supply contracts from leading Eastern and Western marques.

Additionally, they have achieved top EU labelling grades, competed successfully in global motorsport and have proved their ability in commanding prices comparable to the most “premium” brands.

The rising influence of the 25 up and coming players is also evident in their over billion dollar revenue every year.

All in all, numbers speak for their position and size does matter. However, at the moment, there is something that all “premium” brands have in common. That is nothing else but the price they command. After all, as folksy as it may sound, a tyre is exactly worth what a buyer is ready to shell out for it. That, for now, seems to be the most accurate definition of paying a “premium”.

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