Tyre labels will not change marketshare says analysts

The Internet is alive this morning with a German report from Deutsche Bank (DB) that the introduction of the new European Tyre Label will not lead to any material change in the marketshare for tyre manufacturers in the years ahead.

DB’s Equity Research says that it considers the introduction of tyre labeling in Europe to be a move “in the right direction.” However, the analysts believe the regulation should favour premium tyre companies with a multi-brand strategy, and also interestingly, those tyre manufacturers that cheat to improve their results.

Surprisingly, DB Equity Research also expects that for example from a range of 500 tyres, every manufacturer will succeed in having at least a few AA-rated tyres they will advertise.

With the implementation of the regulations and labelling regulations requiring tyre manufacturers to operate a self-certification policy, and sanctions for violations and non-compliance remaining within the remit of national law in the 27 EU member states, the DB Equity Research statement on cheating and high initial levels of AA-rated tyres does not surprise, at least for the first couple of years.

As I have written of a number of times in the Tyre Trade Journal, labelling will prove to be a good thing when the dust settles. In the interim, there should be no panic or loss of revenue to importers and retailers, while they weed out the old stock and change over to fully compliant labelled stock in the months after the November introduction. If there is going to be any panic whatsoever on this issue, let it be organised!