Importance of market areas equalizing

Nordic countries - Number one in the home market

Every year, approximately 10 million car and van tyres are sold in Finland, Sweden, and Norway. Approximately 6 million of these are winter tyres. Legislation in these countries mandates the use of winter tyres during the winter months. The Nordic countries accounted for approximately 43% of Nokian Tyres’ sales in 2016. The company is the market and price leader in the area. Nokian Tyres is the only local manufacturer and it has an extensive distribution network, including its own chain of 348 Vianor tyre outlets.

Central Europe - Growth through additional investments

On European markets, excluding the Nordic countries, approximately 260 million car and van tyres were sold in 2016. Central Europe is the world’s largest market area for winter tyres – 11 times the size of the Nordic market. Approximately 71 million winter tyres were sold in 2016. As tyre markets are expanding and winter tyre legislation is becoming more widespread, Central Europe has become one of Nokian Tyres’ most important growth areas. Nokian Tyres tailors its tyres to address the needs of consumers in different market areas. The non-studded winter tyres designed for the winter conditions of Central and Eastern Europe and the summer tyres that are sold in the area differ clearly from the products sold by the company in its core markets. The company sells tyres in more than 30 European countries in addition to the Nordic countries, Russia, and the C.I.S. Central Europe accounted for approximately 29% of Nokian Tyres’ sales in 2016. The company has logistics and service centers in the area to serve the main markets at any time of the day. Growth in the retail channel was led by Vianor, which had a network of 382 outlets in the area at the end of 2016. The Nokian Tyres Authorized Dealer (NAD) network encompassed 1,481 stores in 19 European countries and in China.

Russia - We grew our market share significantly in Russia in 2016

An estimated 1.4 million new cars and 32 million car and van tyres were sold in replacement market in Russia in 2016. Tyre demand in Russia is affected, among other things, by GDP development, which follows the price of oil, buying power and consumer trust. Russia was the largest contributor to sales growth toward the end of 2016. The Russian economy and consumer market continued to slowly stabilize.

The winter tyre season started early and continued strongly in Russia, as well as in Central Europe, and also the Nordic countries. We grew our market share in our target areas, especially in Russia and Central Europe. In Russia, consumer trust and buying power continued to slowly improve, but still remained at low levels. The sales of new cars in Russia continued to decline in 2016: the entire year was down by 11% compared with the previous year. In 2017, new car sales are expected to grow by 5–10% compared to 2016. Deliveries to the after-sales market in Russia declined by approximately 5% in 2016.

Nokian Tyres is the market leader and largest manufacturer of segment A and B tyres in Russia. Nokian Tyres has an extensive distribution network in Russia, and the location of our factory behind Russian tariff borders, the strength of our brands, and the distribution network provide the Company with a substantial competitive advantage.

North America - All-Season tyres have large potential

In North America, Nokian Tyres’ strongest areas are Canada and the US snowbelt region. Approximately 13 million winter tyres are sold each year in these regions. A total of nearly 260 million tyres are sold annually in the US and Canada.

Nokian Tyres is a traditionally strong winter tyre brand in the northern parts of the continent. The company is building its distribution with strategically selected partners. Furthermore, the Vianor chain has 81 tyre outlets in New England. Nokian Tyres aims to expand its product offerings further and to continue to grow its sales in North America.