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ght, the way we buy them has changed. We can see that in our high streets, in our shopping malls and our out-of-town sho- pping centres. Once booming, high street commercial areas are now more commonly found to be boarded up, with “Pro- perty to Let” notices the main décor for the local high street, shopping mall and even those out-of-town shopping centres.
Simon Hodson of Astutus Research, a company that has wor- ked with the UK’s Tyre Recovery Association looking at tyre arisings throughout Europe, says, “There has been a slower growth in truck tyre sales compared to GDP. This is due to a move towards heavier trucks with a higher capacity requi- ring fewer trips. This is combined with improved efficiency in route planning, so fewer empty return trips. Plus, a wider shift towards sectors involving less movement of physical goods – such as IT, the service industries and the media.”
Hodson says that these are long-term trends that do not ex- plain the drop in the truck tyre market in Q1 2023. Though he does recognise the growth of the light commercial vehicle market.
The driver for this change has been online shopping. Whate- ver you need today, you can find it online, and you can find it online cheaper than in any bricks and mortar store. That gives rise to a change in the demographic of the commercial vehicle market.
Instead of fleets of 7.5 ton vehicles delivering to town cen- tres, or larger trucks to malls, the nature of the supply chain has changed beyond recognition. Large warehouses, often run by Amazon, have become the retail hub of commerce; they receive their goods in bulk, 40 – 44 ton articulated truc- ks feed the online shopping hubs. From those hubs, the goods are distributed by light commercial vehicles. Even small local businesses operate mail orders and these feed the distribu- tion fleets through reverse logistics using LCV and huge arti- culated wagons tripping between depots.
This change in shopping habits creates a change in the mar- ket, where tyres see more consistent use on trucks using the same routes day in and day out, with the same loads and the same drivers. Of course, a positive in that dynamic is that tyres can be better managed, and here we can see evidence in the rise of the use of digital technology to manage tyres. That is something that is less apparent in regional mixed tra- ffic, mixed load fleets. Tyre use is reduced, tyres are better managed, and they have a longer life.
The move of local deliveries to LCVs also hits the market, as runs made by medium-sized trucks in the past are covered by several LCVs today. Even small retailers use these central hubs to buy goods cheaper than they can direct from the su- ppliers.
GROWTH AREAS
These changes in the commercial vehicle fleet can be seen in commercial vehicle sales, particularly in Europe, where Ger- many’s VDA reports two areas with stronger growth, LCV
ANALYSIS
REPORT
up to 3.5 ton and vehicles over 16 tons. Similar reports can be found in the Netherlands, Sweden, Spain, Italy and even the UK the SMMT shows rigids over 16 tons up by 20% and tri-axle articulated trucks up by 18.8 per cent in Q1 2023, whilst vans up to 3.5 tons are up by 14.7 per cent to date, medium-sized rigids up to 6 tons are down by 8.1 per cent.
Hodson also advised; “We should remember that the ETRMA data refers to sell-in – tyre manufacturers to dealers, rather than sell-out to end users. So, the Q1 trends are more likely to reflect changes in dealer stocks. Due to the mass disrup- tion of the past few years, we believe that there has been growth in stock-holding throughout the supply chain.
“With expectations of more normal supply conditions,” Hod- son surmises, “there will be a reduction in ‘buffer stocks.’”
*During World War 2, the retread tyre sector boomed as the industry dealt with the shortage of materials by retreading. It would be interesting to know if retreading in Ukraine, or even Russia, has seen a boost from the conflict. Though it is somewhat difficult to access any such figures from either side, or even make connection with retreaders at the moment.
Astutus Research’s Simon Hodson
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