Starting this month the EU has required tire companies to label their tires according to their traction on wet roads and their impact on fuel efficiency on an A to G scale.
This is part of the effort to help customers make a difference between a 45-euro tire and a 200-euro tire. The new labeling is of utmost importance for tire-makers like Continental, Pirelli or Michelin, as they face increasing competition from low-cost Asian manufacturers who aggressively entered the European market.
According to the European Tyre and Rubber Manufacturers’ Association, the share of non-European brands on the continent rose to 23% in 2011 from 20% in 2007.
“Labeling’s a game changer” for the tire industry, said Fazilet Cinaralp, the ETRMA trade group’s secretary general. “The competition will be even fiercer. The major brands will face big challenges” to justify higher prices.
In 2013 the US will also issue a financial rule to have tires sold in the country be labeled for fuel efficiency, treadwear and wet traction. The current European ratings are a drawback for some high-end tire-makers. For example tires for a VW Golf hatchback cost 46.60 euro from Taiwan’s Nankang Rubber Tire Corp. and are rated C for wet traction and E for roll resistance, while tires for the same car but from Continental cost 79.70 euro and are rated E for wet traction and E for roll resistance.