Tire Sales Maintain Traction Despite Higher Prices

Consumer replacement tire prices grew 13% in 2021 when compared to a pre-pandemic 2019, according to a new report from The NPD Group. Yet, despite elevated prices and altered driving behavior, unit demand for tires neared pre-pandemic levels.

“The tire industry, like many others, is experiencing the effects of a shift in overall consumer behavior as it relates to pricing and demand,” explained Nathan Shipley, automotive industry analyst for NPD. “Driving behavior has changed over the past two years, but the needs are still there. Consumers are currently focused on getting what they want, while they can, with what is available to them at retail stores.”

Average prices for passenger car and light-truck tires soared in 2021, according to NPD, with all major brands contributing to the price increases. When comparing the fourth quarter of 2021 to the same period in 2019, average prices of passenger car and light-truck tires increased by more than 20%.

Several factors played a role in these price hikes, including supply issues and raw material costs. Additionally, these factors may have impacted the availability of certain tires at retail stores.

More expensive tires, priced at $140 and higher, contributed significantly more to sales in 2021 and gained more than 10 unit-share points in the fourth quarter when compared to 2019. In addition to the fact that higher-priced tires sold more units than before the pandemic, they also sold faster, increasing at a rate of nearly 40%, according to NPD.

Sales growth in 2021 came almost entirely from full-price tire sales, which increased 36% year over year, while the volume of tires sold on promotion grew just 1%. As a result, full-price tire sales made up 80% of unit volume sales in 2021, compared to 73% in 2019.

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