Goodyear Dunlop Tyres Romania, the domestic arm of the US tyre manufacturer, saw net income increase by 20% in the first three quarters of the year, while sales advanced by 14%.
As a result, against this year's estimated growth rate, Goodyear's net income is expected to reach almost 5 million euros.
"Owing to a shift in product segments, we generated a 20% increase in income, while our product mix pushed income growth above turnover growth. As in 2006, we expect to maintain a 20% year-on-year growth rate," stated Octavian Velcan, Goodyear sales manager for Romania, Hungary and Bulgaria.
The company registered turnover worth 34.8 million euros and income worth 4 million euros during the last financial year.
According to Goodyear representatives, the phenomenon related to the change in consumer preferences for cost-related segments gained momentum this year.
Thus, a large part of consumers, who previously bought budget-priced brands, switched to premium brands this year, skipping the medium-price segment.
"Whereas the overall market is stagnating, the situation is different on product segments. Premium brands witnessed an average growth rate of 31% year-on-year, while the basic segment is declining because there are less older vehicles on the roads," explained Velcan.
According to Goodyear, the market changes are affected by a wave of new imported vehicles, which are fitted with more expensive tyres, while old vehicles, which are generally equipped with 13-inch tyres, are less frequently used, leading to decline on this segment.
The Romanian tyre market is estimated at 2 million units, of which 1.2 million units account for budget-priced tyres, 200,000 for medium and 400,000 units for premium. In the first nine months of the year, the sales volume reached 1.6 million tyres, and remained at the same level as last year. However, data does not include reconditioned tyres or imported used tyres.
"The trend in used tyres (imported from Western countries) could add 10% to the entire volume of the market," states Velcan.
If the used tyre segment is included in calculations the Romanian tyre market would exceed 2.2 million units per year.
However, the trend shaping up on short term indicates that many premium tyre consumers will shift to the medium-price segment within two to three years, after a significant amount of cars, which are currently part of companies' car fleets, are sold to individuals as a result of buy-back processes.
Goodyear Dunlop Romania only deals with imports and sales on the domestic market, while its main competitors, Michelin, Continental and Pirelli own production facilities in Romania.
Pentru alte știri, analize, articole și informații din business în timp real urmărește Ziarul Financiar pe WhatsApp Channels
