New Zealand - Tyres - consumer and retailer views

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New Zealand research carried out on behalf of EECA, focusing on consumer and retailer views of tyres. Considered a distress purchase, price is often a leading factor.

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New Zealand - Tyres - consumer and retailer views

  1. 1. Tyres: consumer and retailer views
  2. 2. Research methodology  Consumer awareness, attitudes and behaviours: ─ Four focus groups (two in Auckland and two in Wellington) with recent tyre purchasers, May 2013. Two groups were with low-to-middle income and two were with high-income participants, and were a mix of ages and gender. ─ Four questions were asked in the Consumer Omnibus to get an indication of the size and value of the New Zealand tyre market. The sample was nationally representative. The survey was conducted in May 2013, there were 1,037 respondents. ─ A consumer online survey with 300 recent tyre purchasers using the Research Now panel was conducted in June 2013. The consumer online survey was weighted back to the Consumer Omnibus data for tyre purchasers and has a margin of error of 5.7%.  Retailer attitudes and behaviour: ─ 100 computer-aided telephone interviewing (CATI) with tyre retailers sourced through the Yellow Pages, in May and June 2013. 2
  3. 3. Consumer market overview 3
  4. 4. Almost 1 in 2 New Zealand adults have bought tyres in the past year for themselves or someone else T1. Which of the following best describes you? I have bought tyres in the past 12 months 47% 53% I have not bought tyres in the past 12 months Sales in 2012: for comparison… LV tyres: ~ 3 million Light bulbs: ~ 11 million Base: Total May 2013 poll sample (n=1,037) 4
  5. 5. For the majority of people (70%) it’s a ‘distress’ purchase 30% Active Buyers - replaced their tyres without being recommended or instructed to (n=90) Passive Buyers - replaced their tyres because they were recommended to or they failed WOF (n=210) 100% 70% 80% 60% 40% 58% Q17. Which of the following prompted you to purchase your tyres? 35% 27% 25% 16% 20% 6% 0% Recommended Recommended Failed the WOF I felt I needed It was I just decided I by / failed WOF as part of the test to replace them recommended wanted to WOF test at service / replace them repairs Base: All respondents (n=300) 4% 1% 1% Puncture / blow out / damaged Replace on regular basis Others 5
  6. 6. Almost half of consumers don’t remember which brand of tyre they bought Brand purchased T3. And what brand did you purchase? Bridgestone 12% Firestone 11% Dunlop 4% Goodyear 4% Kumho 3% Hankook 3% GT Radial 3% Other brand* 14% Don’t know 46% Cost Those buying more expensive tyres ($250+) are significantly more likely to know which brand they bought (68% vs. 54%) T4. And finally approximately how much did each tyre cost you? 29% 30% 18% 20% 10% 16% 13% 14% $201 to $250 $250 or more 8% 1% 0% Up to $50 $51 to $100 $101 to $150 $151 to $200 Base: May 2013 poll sample, tyre buyers (n=494) Don’t know 6
  7. 7. Irrespective of buyer type, consumers claim a high level of information gathering prior to purchase – although the sources for information differ Q18. Prior to buying those tyres, did you seek any information from the following sources? 30% I didn’t seek any information (n=90) I sought out information (n=210) 70% 100% Active buyers (n=90) Total (n=300) Passive buyers (n=210) 80% 60% 40% 40% 37% 22% 26% 25% 20% 0% 38% 25% 13% 18% 12% 12% 16% 13% 10% 7% 9% 7% 3% 7% 3% 6% 5%4% 4% 4% 2%0% 2%1%1% 1%0%0% 3%1% 12% Base: All respondents and by sub-group as indicated 27% 31% 30% 7
  8. 8. Consumer considerations with tyre choice 8
  9. 9. Durability, safety, road handling and price are the tier-one factors that people consider when buying a tyre – fuel efficiency is a second-tier consideration Q22. If you were buying tyres for your vehicle tomorrow, how important would each of the following factors be to you when deciding which tyres to buy? 1 Extremely unimportant 2 Unimportant 3 Neither unimportant nor important Durability of the tyre 11% Safety factors 11% Road handling This is low relative to retailers’ perceptions (87%) 4% Fuel efficiency 3% Recommendation by a mechanic or retailer Have used the tyre before 6% The brand The look of the tyres 34% 0% Base: All respondents (n=300) 3.9 66% 3.7 56% 3.5 48% 3.4 8% 40% 3.2 7% 31% 41% 28% 20% 74% 11% 37% 41% 18% 4.2 12% 44% 16% 4.1 34% 3.1 6% 21% 2.6 19% 34% 9% 83% 82% 53% 13% 4.2 13% 55% 27% 13% 86% 41% 21% 5% 4.1 30% 42% Type of tyre, e.g. performance, directional 4% 6% 87% 36% 53% 13% Total Mean important 26% 51% 5% Noise reduction 5 Extremely important 61% 13% The price 4 Important 27% 34% 40% 60% 15% 80% 100% 9
  10. 10. Comparatively, price is the most important factor, followed by safety and road handling; fuel efficiency has only half the weight of price Q22b. Please allocate a total of 100 points across the list below in terms of what you think are the most important factors to you. Below shows the average number of points given per item 22.8 23.4 23.6 The price 17.9 18.5 18.7 Safety factors 13.2 14.0 14.4 13.3 12.2 11.7 Road handling Durability of the tyre 9.6 A mechanic, retailer or other expert’s recommendation 11.8 12.7 11.4 11.8 12.0 Fuel efficiency Type of tyre, e.g. performance, directional Noise reduction Have used the tyre before The brand The look of the tyres Base: All respondents (n=300) 6.6 6.5 6.5 6.4 6.2 6.1 6.6 5.4 4.9 7.0 5.3 4.5 5.2 3.7 3.1 Active buyers (n=90) Total (n=300) Passive buyers (n=210) But a brand may be associated with other higher ranked factors such as safety, road handling 10
  11. 11. Consumers and lowrolling resistance tyres (fuel-efficient tyres) 11
  12. 12. With only around a quarter of people being aware of fuel-efficient tyres (FETs), there is some work needed to improve awareness Q23. Have you heard about, or know of, fuel-efficient tyres (sometimes called low-rolling resistance tyres)? Active buyers (n=90) Passive buyers (n=210) Total (n=300) Yes, 24% Yes, 27% Yes, 35% No, 65% Base: All respondents and by sub-group as indicated No, 73% No, 76% 12
  13. 13. Prompting of FETs by tyre resellers is low, but where this did occur, active buyers had a higher conversion than passive buyers Q25. Thinking back to the last time you bought tyres, did the tyre specialist / retailer discuss or offer fuel-efficient tyres as an option? 100% 12% 17% 21% 80% 60% 52% 10% 0% Not offered Offered, not bought 40% 20% Can't remember 26% Active buyers (n=31) 46% Of those offered FET, 72% were converted to purchase 42% 16% 20% 21% 17% Total (n=82) Offered and bought Of those offered FET, 46% were converted to purchase Passive buyers (n=51) 13
  14. 14. After being presented with the FET concept, people reported high levels of purchase consideration, particularly passive buyers Q28. … Thinking about the description below, how likely are you to consider buying fuel-efficient tyres the next time you need tyres? New fuel-efficient tyres use modern design, construction and materials to improve fuel efficiency by minimising the amount of energy needed to push tyre the along the road, without compromising safety and performance. Using fuel-efficient tyres can improve your vehicle’s fuel efficiency by 3% on average. Over a year this would equate to around $70 worth of savings for a typical New Zealand motorist, or around $200 over the life of the tyres. Extremely unlikely to consider Neither unlikely nor likely to consider Extremely likely to consider Total (n=300) Active buyers (n=90) Passive buyers (n=210) 6% 24% 5% 9% 4% 22% 25% Unlikely to consider Likely to consider 53% 49% 55% Would consider Mean 15% 68% 3.7 15% 64% 3.6 15% 70% 3.8
  15. 15. For those who rejected the concept, the potential price of FETs was the main concern Q29. What stops you from considering fuel-efficient tyres? 100% Active buyers (n=32) Total (n=95) Passive buyers (n=63) 90% 80% 70% 60% 50% “I'm guessing they are quite a bit more expensive than regular tyres and so cancelling out any savings.” 52% 49% 44% 40% “Age of car and small distances I now travel.” 30% 20% 10% 0% 10% 9% 9% 7%7%7% 9% 6% 0% 12% 5%6% 3% 7% 5% 5% 6% 3% 5% 3%3%3% 4% 4% 3% 3% 3%2%2% 3% 1% 0% 1% 1%0% 0% 13% 10% 10% 8% 7% 3% “They most probably won't suit my type of car, they will be aimed at 4 cylinder family cars not performance cars.” Base: All respondents and by sub-group as indicated 15
  16. 16. Price is the biggest single piece of information that people would like to know more about Q31. What additional information, if any, would you like about fuel-efficient tyres? 100% Active buyers (n=38) Total (n=148) Passive buyers (n=110) “Would need safe tyres.” 90% 80% “Type, price, suitable to which cars, brands, where to [buy] cheaper from, etc.” 70% 60% “Information to show how they compare with normal everyday tyres.” 50% 40% 30% 20% 10% 0% “The saving from the efficiency has to be compared to the initial cost.” 33% 31% 28% 18% 15% 14% 12% 11% 10% 10% 9% 22% 23% 22% “Does the fuel efficiency influence safety and road holding, and by how much?” 11% 8% 8% 8% 0% 6% 6% 8% 5% 3% 6% 6% 5% 4% 4% 3% 3% 3% 3% Base: All respondents and by sub-group as indicated 0% 3% 4% 0% 3% 4% 2% 3% 3% 16
  17. 17. People may assume that just because you can buy them, they are all equally good… 17 2011 AutoBild - 50 Sommerreifen im Test 205-55-R16
  18. 18. What support is there for better information… Q16. Thinking about what you would find useful when next buying tyres, please rate the following on how useful you think each one would be. Not useful at all Not useful Neither useful nor useful Useful Extremely useful Don't know Efficiency and safety labelling on tyres similar to the energy 3%6% rating label Information on minimum standards for safety and efficiency of tyres 7% An online comparison tool 6% 7% Information from an independent organisation or government agency 6% 7% 0% 16% 18% 23% 20% Base: All respondents (n=300) 71% 4.0 4% 66% 3.9 8% 62% 3.9 8% 56% 3.7 39% 28% 40% 4% 37% 29% 23% Mean 38% 33% 20% Total useful 28% 60% 80% 100% 18
  19. 19. Consumer tyre care and maintenance 19
  20. 20. Which one is underinflated by 30%? 20
  21. 21. Only 4 out of 10 check their tyres once a month, with the primary site of pressure checking being the petrol station Q13. When was the last time you checked your tyre pressure? In the past month 1 to 3 months ago 4 to 6 months ago More than 6 months ago Never Q14. Where do you normally check your tyre pressure? Petrol station Home 9% 6% Tyre retailer Other 3% 6% 9% 13% 38% 37% 79% Base: Q13 - all respondents (n=300); Q14 - respondents who have checked their tyre pressure (n=281) 21
  22. 22. AA survey from 2011 looked at the reasons why some people don’t check their tyre pressure Male 25-44 Female 25-44 Male 45-64 Female 45-64  Men tend to  “forget”  “can’t be bothered”  Women tend to  “not to know what they pressure should be”  “not know how to check pressure”  “leave it to their partner” 22
  23. 23. Over half of people don’t know their tyre pressure and some people do not know how to check and adjust their tyre pressure Q10. Do you know what your tyre pressure should be? 43% 57% No Yes 72% of males knew their tyre pressure, compared to 44% of women Base: All respondents (n=300) Q11. And do you know how to check and adjust tyre pressure for your tyres? No 20% Yes 80% Base: All respondents (n=300) 23
  24. 24. Retailers 24
  25. 25. Where do consumer buy tyres Who are the retailers we surveyed? Retailer survey did not capture this part of the market 100% 80% 60% 40% 20% 0% 43% Independent retailer 3% 8% 59% WOF / servicing / mechanic 16% Q2. Is your business ... Other Franchise / corporate retailer 31% Don’t know 35% 5% Independently owned Part of a franchise 0% 1% Corporate / company ownership Company owned Others Base: Total retailers (n=100) 100% 80% 60% 40% 20% 0% Q2b. Which franchise is your business part of? 49% 20% 11% 6% Bridgestone Beaurepaires Firestone Carters Tyres (all) Base: Franchise retailers (n=35) 6% 3% Other Discount Tyres 3% 3% Goodyear Mag & Turbo Auto Service Centre *NB: Tony’s Tyre Centre has a company policy of not participating in surveys 25
  26. 26. Mid-range and budget tyres make up most of the market Q8. Thinking about your customers, does your business service mostly personal vehicles, business fleets or both equally? Q7. And approximately what proportion of your light vehicle tyre sales volume, out of 100%, do each of the following categories make up? Budget range Total (n=100) Mid-range 34% Performance range 42% Other types 19% 5% By retailer type Independents (n=59) Franchises (n=35) 36% 34% 43% 41% 18% 21% 3% 5% By customer type Personal (n=34) Personal & business (n=57) 43% 30% Base: Total retailers (n=100) 37% 46% *NB: small base size (n<30) 17% 21% 4% 4% 26
  27. 27. Retailers don’t think consumers value fuel efficiency… Q9. Now thinking about what is important to your customers when buying tyres. Please could you rate each of the following factors? Extremely unimportant Unimportant Retailer recommendation 12% Price 3% Durability 17% Brand Personal recommendation 24% 67% 42% 25% 67% 26% 40% 26% 66% 13% 32% 11% Type of tyre 3% 4% 11% 13% 23% 26% 0% 20% 36% Low relative to consumers’ priorities 74% important 40% 9% 16% 35% 60% Base: Total retailers (n=100) 45% 9% 30% 28% 48% 15% 36% 41% 48% 12% 33% 38% 14% 51% 20% 36% 38% 15% Look of tyres 31% 41% 6% Fuel efficiency 75% 45% 43% 29% 7% Have used the tyre before 76% 53% 25% 3% 4% 79% 46% 30% Total important 87% 36% 23% 19% Deals / special offers 2% 6% Noise Extremely important 33% 21% 5% Road handling Important 51% Safety 3% Suitability for vehicle Neither unimportant nor important 39% 10% 26% 3% 8% 80% 11% 100% 27
  28. 28. Retailers and lowrolling resistance tyres 28
  29. 29. Many franchises are currently stocking LRR tyres Q11. …Which of the following best describes your business’ awareness of these new types of [fuel-efficient] tyres? 2% Not aware of them 11% Aware and plan to sell in future 6% - franchises & 15% - independents 24% 63% Aware and don’t intend to sell in future 14% - franchises & 31% - independents Currently stocking 80% - franchises & 51% - independents Base: Total retailers (n=100), independent retailers (n=59), franchisee retailers (n=35) 29
  30. 30. There are a number of reasons for selling LRRTs, with franchises being most strongly influenced by company policy Q15. And what made you decide to start selling fuel-efficient tyres? (Base: Retailers who sell fuel-efficient tyres) Independents (n=30) Total (n=63) Customer demand / request 16% Had to / told to / company policy 16% Research / results / personal experience Natural progression / way market has gone Dealer / franchise and part of product range 20% 29% 13% 11% 11% 13% 11% 11% 13% 11% 10% Quality / good tyre 10% Enviromental impact / eco-friendly Brand brought out new tyres 7% 8% 5% Good selling point / easy to sell 5% Something new to try 5% Best for the customer 11% 3% 11% 10% 6% Availability / supply 14% 10% 8% 7% 0% 63% of all tyre retailers sell LRRTs 7% 7% 5% Cost / price 14% 0% 13% Benefits - fuel saving, wear and tear Our company makes them Franchises (n=28*) 0% 3% Base: Retailers who sell fuel-efficient tyres 7% 3% 3% 0% 51% of independents sell LRRTs 11% 4% 7% 4% 80% of franchises sell LRRTs *NB: small base size (n<30) 30
  31. 31. Retailers claim consumer demand is a key motivator to start stocking LRR tyres Q16. Which of the following would prompt your business to start selling fuel-efficient tyres? Q12. For which of the following reasons, if any, are you not planning to stock fuel-efficient tyres in the near future? Total (n=37) Customers start asking for them regularly Total (n=24*) 65% There is stronger proof of benefits than currently available 38% One of your suppliers offers an incentive to start selling them 38% There is industry wide support for them 35% They add something new or different to your product range 30% Regulatory influence such as minimum standards or labelling 27% There is no demand from customers for them We are not sure what the benefits of choosing these tyres are 5 They have a lower profit margin 5 We have safety concerns about these tyres 2 22% Cost / price A local competitor starts selling them 19% Others 5% Others 5% Don’t know 24% of all tyre retailers don’t plan to sell LRRTs 2 They provide better profit margins than conventional tyres Not convinced to sell them 18 4 3% 37% of all tyre retailers don’t currently sell LRRTs Base: Retailers who currently don’t sell fuel-efficient tyres *NB: small base size (n<30), reported in raw numbers 31
  32. 32. Further information is needed to drive demand for LRR tyres Q17. And now thinking fuel-efficient tyres in general, please tell me to what extent you agree or disagree with each of the following statements? …People need further education and information to start asking for or buying fuel-efficient tyres Completely disagree Total (n=100) 3% 6% Independents (n=59) 3% 7% Franchises (n=35) 3%3% 0% Disagree Neither agree nor disagree 15% 15% Agree 37% 76% 37% 37% 75% 43% Base: Total retailers (n=100) Agree 39% 17% 20% Completely agree 40% 77% 34% 60% 80% 100%
  33. 33. So what’s the market share of fuel efficient tyres? 27% of consumers have heard about LRR tyres Context: about 47% of tyre outlets (franchise, independents, other) already stock LRR 37% of those consumers have been offered LRR at their last purchase 57% of those consumers who were offered LRR also bought LRR Indicative sales market share for light vehicle LRR tyres = 6% 2.85 million light vehicle tyres sold/imported per year LRR 170,000 % in blue boxes based on tyre research findings 33

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