Continental Truck Tyres: Restructuring Pays Off

It was in mid-2001 that we reported on the plans of Continental Tyre group to drastically re-organise its commercial tyre operations in the UK. How successful was it? The result was no cosmetic tinkering with the problem, but a root and branch reform that ushered in a fundamental change in the way the manufacturer brought its tyres to market. Conti’s plan was to form a network of independent truck tyre dealers, each with their own territory, to provide an effective nationwide service capability.

The commercial division of the Conti-owned equity, NTS, disappeared, with some depots being bought out, others purchased by outside parties and a handful joining ContiNetwork, as the new chain was called.Certainly Continental needed to take some action, as its commercial tyre activities were consistently posting losses, and the radical surgery that was the introduction of the ContiNetwork was seen as the best way. So, 18 months or so on, has it worked? Has the patient recovered? At the time, there were some mutterings that the whole exercise was merely a precursor to Continental quitting the truck tyre business – something which, to be fair, the company has always vehemently denied.

The company had turned its loss-making commercial activities into a profit, the ContiNetwork members were happy with the volume and profit they were making and the fact that no fleet customers had been lost indicates that they must be happy.Arthur Gregg, Business Director for Commercial Tyres, certainly believes that the future is bright and pays tribute to what has been achieved over a relatively short period. “We’ve gone from loss to profit and established what we regard as the UK’s premier independent network,” he said, concluding: “the truck tyre business makes a profit for us and for our partners.