Changing drivers in tyre replacement
By Sharad Matade:
Along with product innovation, technology upgradation and improved overall quality, continuing focus on brand building is helping tyre manufacturers to strengthen their image, according to Kaustav Roy, Director at JD Power, Singapore. The global marketing information services company recently released the JD Power 2018 India Original Equipment Tire Customer Satisfaction Index (TCSI) Study, which found changing key drivers in replacement of tyres. Roy also spoke on the transparency in surveys, the role of OE fitment and radialisation in both passenger and commercial vehicle tyres.
According to your experience and the surveys, how do customers determine the quality of tyres?
While we do not have any direct question in our surveys that can determine this, based on our experience, if a customer does not face quality issues with their tyres, such as the tread being worn off too early, multiple and frequent punctures, etc., they would generally be satisfied with the quality of the tyres.
What are the practices / methods you follow to bring transparency in the surveys?
Our surveys are conducted with the utmost rigor and emphasis on quality. Apart from the fact that the data collection process is supervised by a team of experienced professionals, who hand-hold, guide and check the data collection methods, we also have multiple layers of quality checks which ensure that the final data that is produced is devoid of any errors. Some examples of data quality checks that we employ are third party audits with interviews that are tape recorded and then listened to by auditors to ensure accuracy of administration. In addition to these, keeping in line with digitization, the interviews conducted are geo-tagged and time stamped which allow us to determine the quality of work that is being carried out.
Over the years, what are the factors that have made the brand image as the important driver for selecting tyres? Was it because of intensive brand building efforts by tyre companies or is it because consumers are becoming brand conscious?
Continuous brand building by the tyre OEMs has obviously been the primary factor in enhancing brand awareness and brand image of the various tyre brands. This brand building by the tyre companies has also been supported by product innovations and technological upgrades, which have resulted in the enhanced brand image of the organisations. In addition, being an OEM fitment of choice – especially in mass market cars, also assist in building the reputation of the tyre brands. The underlying theme from customers being that, if an OEM has chosen a particular tyre brand to be fitted on their cars, there has been due process of checks that have been conducted and hence the tyres so fitted are of a reputed brand and of a high quality level.
Most customers, according the survey, are more concerned about wear and tear, ride and durability. Do consumers look at fuel efficiency, safety and pollution when they replace tyres? Do you have any plans to add these parameters in your survey?
While we can say that customers are definitely looking at wear and tear and durability of tyres, we do not have any specific data about whether customers look at fuel efficiency, pollution, safety aspects emanating out of a tyre performance. The question raised is very interesting and we will look into adding these elements in for the next round of the study. However, in our opinion, the purchase of a tyre is a process focused on risk reduction, rather than an enjoyable shopping experience like buying a car itself. Hence, we don’t think that the Indian car owners lay that much emphasis on these finer elements.
What are the reasons for the decline in replacement of tyres in 1 to 2 years of the ownership? Is it because of the improved quality or improved handling and maintenance of tyres?
Needless to say that improved quality of tyres have played a major role in the decline of tyre replacement within the 24 months ownership. That said, we also think that relative improvement infrastructure of India has also played a role in the life of tyres becoming better. In addition, the Indian car owner does not drive a very large number of kilometers per year. The average Indian car owner drives about 11,000 -12,000 kms per year, which in itself is not too much. The interesting thing to find out would be the percentage of tyre replacement as the vehicle grows older – more towards the 5th year onwards. Unfortunately, we do not have any data on that period of ownership.
What according to you are the reasons for 100% radialisation in passenger car tyres segment though there was no enforcement from regulatory authorities and consumers demanding for it? Why not the same radialisation rate we have not seen in commercial tyres?
We do not believe that the penetration of radials in the PC segment has been due to regulatory reasons. Given that Indian customers are value conscious -be it on fuel efficiency, or overall maintenance of the vehicle, auto makers clearly realized that radial tyres offered all those benefits technologically over cross ply. The consequent move by the OEMs to continuously upgrade technology to provide better value to customers, also found its manifestation in tyres with use of the radial tyres. However, in the CV space, the sheer use of the vehicle – with the varied nature of harsh use that the vehicle goes through takes a toll on the tyres. We must bear in mind, that commercial vehicles also cross multiple kind of terrains in one trip – that a passenger car never sees in its lifetime. Given this usage, tyre replacement cost is obviously one of the most important elements in the entire operating cost of a fleet.
Given that radials are about 15 -20% higher priced than cross plys, a mass fitment of radials would have taken the price of the vehicle much higher and consequently raised the overall cost of running the vehicle. Given this reaction from the market, radials in CV have not caught up in a similar proportion to that of the passenger car segment. Having said that, this trend is slowly changing. With the advent of more technically superior vehicles in the CV space, OEMs are clearly looking at incorporating radials in their vehicles – and in turn educating customers, on the overall benefit in the long term that radials provide. Better quality highways are also adding to this trend and we think that the upward momentum of incorporating radials in the CV space will continue.
Do you think that tyre companies will focus more on OE fitment as consumers prefer the tyres of the original fitment for replacement?
Tyre OEMs have always focused on OE fitments – the trend is not new. Since, in general, an average customers’ knowledge about tyres and their impact on vehicle performance is limited, OE fitments have always been a beacon of messaging to the end customers, that the brand is reputed and of good quality and technology. Having said that, replacement of a non-OE fitted brand also does occur often. This may be due to price, push from the retail network or the customers’ experience with their OE fitted tyres. Therefore, in our opinion, I think the strategy would need to be dual fronted – OE fitment, supported by a wide retail network, which offers customers a good shopping experience while replacement. Organizations that are able to execute this seamlessly, will definitely benefit in the long run.