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November 11, 1996 01:00 AM

WINTER TIRES 15 PERCENT OF EUROPEAN MARKET

Bruce Davis
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    FRANKFURT, Germany-The numbers are staggering, compared with the norm in North America. Nearly one-third of German car owners and roughly one-half the drivers in Austria and Switzerland switch to M+S-rated tires during the winter months, according to various tire company studies. In Scandinavia, the figure's closer to 80 percent.

    On a European scale, winter tires represent up to 15 percent of replacement market shipments of new car tires. Sales surpassed 20 million units last year, with steady growth observed over the past four to five years.

    Perhaps more importantly, both for dealers and manufacturers, winter tires have higher markups than their summer counterparts-sometimes representing the difference between profit and loss for individual companies.

    For dealers, the winter tire changeover represents additional business opportunities. The majority of winter tire purchases, for example, are coupled with the purchase of a set of wheels, not to mention the opportunities that go with having customers visit a dealer twice a year for the changeover, according to Continental AG.

    The winter tire buyer is extremely well informed, according to Marcell Ulrichs, Conti's European director of marketing for car tires, who points to a half-dozen comparison tests conducted annually by the European car clubs, consumer testing agencies and various automotive enthusiast magazines (primarily German).

    As a result, performing well in these tests is very important, company marketing executives agree. It's often possible to monitor sales response quite markedly following the publication of the more well-recognized tests, they say.

    Early snows in the Alps the past few years have focused consumer attention on winter preparation for their cars, helping the winter tire business. Two-thirds of winter tires are sold in October and November, industry data show.

    In addition, when winter tires are sold early in the season, prices tend to be more solid, improving returns for dealers and manufacturers alike. These sales opportunities draw attention not only from tire dealers, however.

    In central Europe, car dealers take a larger share of the winter tire business than they do summer tires because of consumer tendencies to favor car dealers for ``winterizing'' their vehicles. Car dealers often use a free set of winter tires to close a sale; offering them mounted on steel wheels and storage of summer tires are further incentives.

    Growing demand has spawned an outpouring of new winter tires from all the major European producers, plus an ever-expanding list of M+S products from eastern Europe and the Far East.

    The development of silica as a reinforcing agent has helped push winter tire performance way beyond what were considered the outer limits only a few years ago.

    Thanks to advances in materials and design technology, the latest winter tires are outperforming their elder brothers by wide margins in snow traction and are demonstrating admirable performance in wet and dry conditions.

    A particular advance being promoted heavily this winter is that of secondary or deeper siping, a development intended to extend the life of a winter tire by improving its snow grip potential at the part-worn stage. In each case, companies credit developments in compounding technology for allowing them to re-engineer tread designs toward this goal.

    The Michelin study also revealed that more than 40 percent of German car owners claim to own winter tires, although not all use them every year.

    Additionally, M+S styles represented nearly two-thirds of all retreaded tires sold in Germany in 1995, according to data from Germany's tire dealers and retreaders association, BRV: 2.8 million M+S units of the total 4.3 million retreads sold.

    Taking these into account, roughly 30 to 33 percent of German replacement sales the past three years have been M+S types.

    All-season tires, however, have not penetrated the European market to any extent.

    Goodyear estimates annual European demand for all-season tires to be about 1.5 million units, or between 1 and 1.2 percent of the new-tire replacement market.

    Germany is considered the largest market for all-season tires, although special considerations cloud the picture: An inordinate share of all-season fitments come from fleet purchasers such as Germany's national postal service, which outfits most of its vehicles with all-season tires.

    Continental makes an all-season tire especially for the German postal service, but does not market this product through general distribution channels.

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