All-Steel Tire Sales Continuously Shrink in Dec 2023
Snapshot: In December 2023, China’s replacement market of all-steel tires continuously slowed down with weaker dealings. In the last sale month of 2023, the end demand for tires fell to a low level. Sales at traders were hampered. The tire sales volume saw a seasonal decline.
Research samples showed that the sales volume continued to fall.
SCI surveyed 39 first-level distributors and 23 second-level distributors. The survey regions covered 14 provinces (municipalities and autonomous regions) in Shandong, East China, Northeast China, North China, South China and Central China. Meanwhile, as the regions were different, the road conditions and the recognition of tire brands by distributors in various regions were different, sample distributors had different product brands and different brand levels. The brands surveyed include foreign brands and domestic brands.
As shown in the survey results, the sales volume at around 95% of sample distributors trended down M-O-M in December. Therein, many distributors saw a decrease of 20%-40% in sales volume. Only 5% of distributors saw a stable sales volume M-O-M.
The reasons for the M-O-M decline in the sales volume were as follows. First, China’s demand for replacement tires saw a continuous seasonal drop, leading to a decrease in the sales volume. Second, the cold wave came in many regions. There was heavy snow in northern regions. Most outdoor projects including infrastructure were stopped. Vehicles for logistics transport were more frequently stopped, and the demand for tires continued to shrink, which formed a strong drag on distributors’ purchases and delivery. Third, dragged by the end demand, distributors collected payment ahead of time. Overall, the sales volume at sample distributors trended down in December.
Seasonal characteristics emerged. Tire sales volume hardly stabilized amid weakening demand.
According to SCI’s seasonal index of replacement tire sales volume at sample distributors in the past seven years, it is the traditional sales peak season in March and the period from June to September. In the other months, the sales volume is relatively low. It was the last sale month of 2023 in December. It snowed in many regions including Northeast China, leading to insufficient transport capacity and poor road conditions. Thus, the end logistics and transport prosperity showed a downtrend. Under higher sales pressure, tire distributors showed thin interest in replenishment and focused more on the payment collection.
Overall, the replacement market of all-steel tires weakened in December, and dealings were weaker. At the end of 2023, the traditional demand further declined, putting higher pressure on distributors. The transport market was insipid, witnessing an obvious decline in the transport volume. The demand for tires continuously decreased. Meanwhile, it was in the year-end debt settlement stage in December. The market focused on withdrawing funds with low sales expectations.
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