While labelling is raising the quality of tires on European roads, it has also helped sales of budget tires, according to Gerard Stapleton, head of South East Asian research at market research company LMC.
As well as being very price competitive, these products "are performing well in meeting the labelling characteristics,” said Stapleton, adding that this has "encouraged imports of budget tires into Europe."
For similar tire-label ratings, he continued: “low-cost tires are actually 15 percent cheaper than quality tires and 25 percent than premium tires.
"Comparing the figures from 2006 and 2015, we find that the quantity of imports has increased, and low-cost tires, which are below €30 per tire unit value, now form 65 percent of imports."
More significantly, perhaps, China is now adopting the European tire labelling system as a means of raising quality standards in its tire industry.
According to Mary Xu, secretary general of the Chinese Rubber Industry Association, China’s tire label scheme will be closely based on the EU version and could be introduced on a voluntary basis this year and become compulsory by 2019.
And unlike in the EU, according to Xu, the Chinese scheme will have much more ‘teeth’ when it comes to market supervision.
For example, she warned Chinese tire-makers that “if you cannot put the right label on your tires, then we will announced that on TV and on websites, and your company will lose its [reputation].”
With enforcement likely to be much more effective in China, labelling could soon give tire makers there further competitive advantage over more heavily regulated tire-makers in Europe - and not just at the lower end of the market.