Allexim Takes Service Centre Concept to China

One trade company, which isn’t exactly a major market player but nevertheless has a long and successful history in China is the Alltyre Shanghai Trading Co., Ltd. which is owned by a German entrepreneur. The holding company is called Allexim Handel GmbH and is based in Hamburg, Germany. Currently, the company operates three tyre dealerships in Shanghai under the name Alltyre. In addition, there is a wholesaling business which mainly supplies car dealerships with tyres, says Johannes H. Muecke, whose family owns the business. In these three outlets Alltyre sells about 9,000 to 11,000 tyres per year, which is “a reasonably good figure” for Shanghai, Mr Muecke says.

Currently there are plans to establish a fourth dealership in Beijing. This new branch will be opened next spring but it will differ from the existing business concept used in Shanghai. It will differ in the sense that more accessories and additional services will be offered than in the three existing outlets. This new service centre concept will be similar to a concept which was successfully put into place in Germany under the Name “A.T.U.” and today operates about 560 outlets in continental Europe. How exactly this idea will be implemented hasn’t been decided yet, Johannes H. Muecke says. More news is expected on the subject by the end of the year.

The major brands that Alltyre is selling in Shanghai are Kumho, Hankook and Warrior (produced by Michelin in China). The German tyre brand Continental is also listed in Alltyre’s portfolio, Mr Muecke says, but the company is having a hard time selling this brand. It is not because the brand or the products itself are causing problems. It is rather the price that has to be charged for such imported products – far over the average.

The German company owner considers himself a supporter of the Continental brand that Alltyre used to distribute somewhat exclusively in the region. He even features the tyre brand on his stand during the CITExpo in Shanghai this year. The prices he has to charge his customers just make sales extremely difficult.

According to Johannes H. Muecke a Continental passenger car tyre of a given size has to be sold at a price about 40 per cent higher than that of a comparable Goodyear tyre, which is produced in China. Also most of the other international tyre majors now have their own production capacities in China. “If they really want to make a difference here in China, they would have to produce locally,” he says in light of Continental’s failed joint venture experiments in China.

The German tyre manufacturer is also only a spectator in the Chinese original equipment business from which the German entrepreneur would expect a certain backlash demand on the Chinese replacement market. Only imported luxury cars are sold in China with Continental as OE fitment; smaller and cheaper cars are only rarely imported. Interestingly, Alltyre outlets don’t sell Michelin tyres although Michelin also has a good reputation in China and a long history there as well.