SAN JOSE, Calif. (Nov. 27, 2001)—Revenue from tire and wheel replacement sales in North America will grow at a pace twice that of unit growth in the coming six years, as demand rises for more aesthetically pleasing, higher-performance—and higher-priced—products, according to a new study.
The analysis, from market consultants Frost & Sullivan Inc., forecasts the value of the tire and wheel aftermarket to grow more than 6 percent annually from 2000-2007 to $15.66 billion, whereas unit sales will expand 2.5 percent annually to nearly 305 million tires and wheels by 2007.
“The most popular end-user groups for tire manufacturers are light truck and utility SUV owners,” said Meenakshi Ganjoo, industry manager for Frost & Sullivan. “Demand for replacement and performance tires for light trucks and SUVs has surpassed that of passenger vehicles or sports cars.”
This demographic group routinely upgrades tires to improve hauling or towing capabilities, Mr. Ganjoo said, and owners increasingly are replacing wheels for aesthetic reasons.
“In a market where style is gaining significance and emerging as a major factor influencing purchasing decisions, custom wheel manufacturers are well positioned to take advantage of the trend,” Mr. Ganjoo said. The trend to larger wheel sizes and a desire for differentiation will help drive up the per-wheel revenue, the study concludes.
Custom wheels generated more than $750 million in sales in 2000, the study shows, or only about 7 percent of the total market for tires and wheels. Of that amount, aluminum wheels accounted for more than 85 percent of the wheel market.
“Aluminum wheels are the driving force in this aftermarket segment,” Mr. Ganjoo said, “as the metal´s malleable properties allow for the various sizes and shapes which appeal to both manufacturers and consumers.”
The study is based in large part on information provided by 15 tire and 31 wheel makers and marketers in North America.