Published by Torqata Insights Team – reach out to InsightsTeam@torqata.com
Tier 4 tires have made quite the splasIn the ever-evolving landscape of the automotive world, one tire tier stands out above the rest—Tier 4.
But what’s behind this notable rise?
Tier 4’s Rise to Prominence
Looking at the tire business, it’s clear there’s a move toward Tier 4 tires. Here’s what the numbers tell us:
Pricing Dynamics: While other tire categories are seeing a price hike, Tier 4 prices bucked the trend, dropping by 4.9% year-over-year (YoY). Even with a monthly decrease across the board, this price shift is driving more interest in Tier 4 options
Sales Volume: Despite a price drop, Tier 4 sales only decreased by 5.0% month-over-month (MoM) – but still performing notably better than its counterparts.
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Why Are Tier 4 Tires Gaining Traction?
There are a couple of important reasons:
Price hikes in other tire tiers have accelerated consumers’ gravitation towards Tier 4 tires. As cited in Tire Business Review, Tim Eisenmann commented, “While Tiers 2 and 3 are feeling the most strain, Tier 1 remains stable. Interestingly, Tier 4 emerges as the top performer. For instance, if one prefers Michelin, they stick to it. But those open to alternatives are exploring Tier 4, occasionally opting for unfamiliar brands to save some cash.”
The shift towards Tier 4 tires is more than just price increases in the other tiers. The aging car parc (vehicle population) plays a significant role too. A recent highlight from the Jeffries Annual Review of Global Aftermarket in the Auto Care 2024 Factbook noted, “Vehicles between 4-11 years old, widely considered the aftermarket’s ‘sweet-spot’, surpassed a count of 117 million. Most notably, the average age of light vehicles in the US rose to 12.2 years, setting a new record.” This significant shift underscores the importance of understanding consumer behavior within this evolving market.
As vehicles age, owners tend to be more cost-conscious regarding maintenance and replacements. Recent data has highlighted an increasingly older car parc, with more vehicles on the road past their prime years. When faced with necessary replacements or maintenance, owners of these older vehicles often prioritize affordability over brand loyalty, especially when the car’s perceived value has depreciated.