South Korea’s growing replacement tyre market valued at US$800 million
With South Korean replacement car tyre sales of over 8.6 million units worth US$800.9 billion last year, the replacement tyre business joins the rest of the automotive industry in being a major part of the entire local economy. According to GfK’s automotive retail audit sales in second half of the year climbed 15 per cent over first half and nearly 30 per cent compared to the same period in 2009.
GfK commenced tracking of replacement car tyres in South Korea in mid 2009 covering five major regions of South Korea—Seoul, Kyunggi, Inchon, Kyungbuk, and Kyungnam. Findings showed that replacement car tyre prices retailed in the range of $87 to $99 during the 12 months, averaging at $93 per tyre in 2010. While quarter three sales totalled $212.7 million for 2.35 million replacement car tyres sold – the highest in unit terms retailed for the year, fourth quarter reported the highest earnings at $216.4 million although having sold a lesser quantity of 2.19 million units.
“The year-end winter season garnered $75 million worth of replacement car tyre sales in December which closed 2010 on a high,” observed Moongeun Kwon, general manager of GfK Korea. “It is also interesting to note that the average price of replacement car tyres also peaked in the last quarter and continued to soar above the $100 mark in the subsequent two months that followed.”
Accelerating inflation across Asia, South Korea notwithstanding has pushed up prices of raw materials and replacement car tyres were selling at $99 in the last quarter of the year. The price hikes carried forward to January and February which registered $104 and $102 respectively.
“When we look at the overall performance of the replacement tyre industry in the last one and a half year period segmented on a six-monthly basis, the industry has been registering an upward growth trend in both unit and value sales. South Korea is today one of the most advanced automobile producing countries in the world. In fact, the Korean Automotive Manufacturers Association predicted a growth of nearly 6 per cent in domestic car sales in 2011,” said Mr. Kwon.