KAMA TIRES: how the virus swept through the season
The automotive business is idle, which cannot conduct full-fledged activities, manufacturers and sellers of spare parts look a little more cheerful, but the reduction in demand is also felt here - car owners are sitting at home. About the impact of the current spring on the tire market, about the prospects for its development and consumer preferences in an interview with Timur Sharipov, and. about. Executive Director of the Kama Trading House, a division of the Tire Business of the Tatneft Group KAMA TIRES.
How has the COVID-19 situation affected the tire business?
In many regions, tires have fallen into the essentials category. The authorities understand that timely technical and service maintenance of cars is the key to the smooth functioning of socially significant services, manufacturers and suppliers of vital goods, transport and logistics and other enterprises.
Therefore, our task, as one of the largest Russian tire manufacturers, is to support our partners and customers by providing them with quality products on time, observing all necessary sanitary measures.
March even became a record for us in terms of sales in the secondary market and exports. But we do not build optimistic forecasts - we live and change along with market conditions.
Has the demand for tires changed by end-users?
The winter tire change season is earlier than usual this year, but buyer activity is lower in April, which is expected given the current situation. This is also connected with the need to stay at home - here we can talk about pent-up demand. It is also worth considering the change in consumer behavior that has already occurred, when rational savings become the main motive for buying.
Therefore, in the current conditions, the optimal product in terms of price-quality ratio will be in demand. It is this parameter that we always focus on when developing new models and forming a range of tires, and therefore the brands Viatti, KAMA can often be found among the leaders in sales ratings.
If we talk about the truck tire market, then it is primarily affected by the state of trucking companies. The number of road transport on the roads of the country has decreased. Logistic flows have changed not only in Russia, but also in the world, including in connection with enhanced security measures. This cannot but affect sales. At the same time, we are seeing interest in the retreading of all-steel tires. This service allows you to extend the service life and significantly optimize the cost of 1 km of run.
What are the key trends in the tire market today?
The demand for online shopping is growing, but this has nothing to do with the coronavirus. In Russia alone, the share of such sales has doubled over the past five years. Therefore, last year we launched our own online store KamaTyres.Shop*. According to experts, after self-isolation, the trend for online shopping will continue. Buyers are accustomed to the fact that buying online even such a category as tires is convenient, practical and will save time on delivery.
According to experts' forecasts (according to Auto Tire Market 2020), the growth of the global tire market in the next five years should have been about 2,1%. Even adjusted for what is happening in the world now amid the pandemic, this segment of the economy has a strong position.
As for the B2B segment, the market for retreaded all-steel tires has been developing in Russia for 20 years, and now it is felt more than ever. Transport companies seek to optimize costs and switch to retreaded tires. Since in practice this increases the resource of the product by almost 3 times (on KAMA, KAMA PRO frames). At the same time, the costs are 40% -50% lower than for the purchase of new ones. And after the “urgent optimization” against the background of the pandemic, the trend for such tires will continue - at the exit from this “storm”, many will not return to more expensive purchases. After all, in terms of performance characteristics, retreaded all-steel tires are not inferior to new ones, and the price is lower.
* Limited Liability Company "Trading House 'Kama". Legal address: 423570, Russian Federation, Republic of Tatarstan, Nizhnekamsky district, Nizhnekamsk, Industrial zone territory, building AIK-24, office 402. OGRN 1021602510533.
