Goodyear Dunlop to ‘Renew’ Passenger Car Product Range

Goodyear Tire & Rubber Company may have had a difficult time in the recent past, but the company’s management is irrepressibly optimistic about the future. At the beginning of the year the company won what had become a war of attrition with the United Steelworkers Union in the US – a fight that cost the company approximately $370 million. However, despite the upheaval on the global scale, European president Arthur de Bok told Tyres & Accessories that Goodyear Dunlop is increasingly becoming known for its drive, determination and strong brand portfolio.

Arthur de Bok is not only confident about Goodyear Dunlop’s future, he also is also quick to put the wider ramifications of the strike into perspective. In his words “there has been no impact” on the production and distribution of Goodyear Dunlop products in Europe.
Instead, perhaps representing a wider corporate philosophy, de Bok suggests taking a look at the bigger picture. While the strike face-off cost Goodyear Tire $370 million, the reaction from the stock markets (not to mention various financial analysts) has been uniformly positive. “The world around us sees the progress and drive of Goodyear despite the tough calls we have had to make,” he explained.

Passenger car product renewal

As T&A met Mr de Bok at the Geneva motor show, conversation particularly focused on the passenger car tyre segment, an area where Goodyear Dunlop really do have a lot to shout about. This year the company has scheduled a record number of product launches across its complete brand portfolio. “We believe in strong products and strong brands,” commented Goodyear’s European president.
And that’s why Goodyear Dunlop is launching six new products in 2007 – Goodyear Dunlop’s two leading brands will each introduce three new products to the market in 2007. This development comes as part of a plan that other executives have described as a total range renewal. As you would expect from a large-scale manufacturer these products continue to follow the strongest market trends, answering consumer and retailer demand for quality and high performance products.
The first product release of the year was the Goodyear Eagle F1 Asymmetric in the middle of February. Choosing to design the new F1 as an asymmetric tyre marked something of departure from the strategy behind its predecessor, which was well-known for exactly the opposite design style (see February 2007’s T&A).
Next up is the Dunlop SP FastResponse, which, like the Goodyear Eagle F1 Asymmetric, was also on display in Geneva. Joining them will be the SP Sportmaxx GT and the Grantrek Touring AS SUV-orientated tyre. (For full details of these see this month’s high performance tyre feature). The Goodyear Duragrip was also launched in March.
“We have a strong product portfolio and [in this respect] we have made the progress we wanted to make,” de Bok continued, adding: “Like other companies we have benefited from the winter tyre directive change in Germany. Our new technology remains strong and our Ultra-Grip UG7 product has received strong ratings everywhere.”
As Tyres & Accessories went to press it emerged that the new Dunlop SP Sport FastResponse had been highly recommended in a prestigious ADAC test.

Too many brands?

As the only manufacturer with two premium brands and six group brands covering most of the market, Goodyear Dunlop is aware both of the need to rationalise the number of stock keeping units. At the same time the company sees its attempts to cover as much of the market as possible with its brands portfolio as successful. But with two premium brands, isn’t there a danger of cannibalism? Isn’t this a particular danger with reference to the recent launch of the Goodyear Eagle F1 Asymmetric and Dunlop’s new Fast Response with just a month between them?
Apparently not: “Cannibalism? Goodyear is not just about safety, but innovation. Dunlop, on the other hand, is aimed at the petrol heads of this world and is much more sport orientated. Both have to be strong in all key segments.”
According to Arthur de Bok, much progress has been made in recent years in terms of brand differentiation: “Things have changed greatly. In 1998/99 there were some initial problems with the classification of the products, but we really turned a corner in 2002/2003. Now we have ‘moved a long far.’ Now, the company is reporting that more and more customers are purchasing both products and the trade is becoming increasingly positive about the two premium brands.

The changing face of Hi-Q

Tyres & Accessories asked Mr de Bok about the company’s recent decision to overhaul its retail presence by transforming its Hi-Q business into a network of soft and relatively hard-franchised dealerships. de Bok makes it clear that the Hi-Q strategy and the decision to franchise its retail options is made on a strictly market by market basis. However, says de Bok: “Franchises are working where franchising works.” This means that, in addition to the particular business styles in operation in the respective European markets, the retail strategy will also be developed on a market by market basis.
Using an example from the Fast Moving Consumer Goods (FMCG) industry, de Bok further explained the company’s market-by-market approach. “There are no Tescos in Germany. We need to have the right programme in the right market. Its all about coordination and cooperation. In France it will move more towards franchising with Vulco. We are big believers in our franchise programmes – it serves our end-users better.” And, what’s more, it looks likely that we’ll see a lot more franchising activity in the UK.
On a European scale Goodyear Dunlop continues to see its German Premio retail presence and Vulco network as strong brands. And in this respect, the French market is presents a particularly interesting example. Since Goodyear Dunlop Tire France was founded on 1 January 2004, the group has reportedly increased its market share 4 percentage points to 23 per cent of the 32 million-unit strong French passenger car tyre replacement market. In parallel with this development, on 1 June 2006 Goodyear Dunlop officially replaced Continental as number one supplier to the Speedy retail network (the French arm of Kwik-Fit).
The French retail market is dominated by the Norauto group (brands: Norauto, Midas and Maxauto), controlling just over 15 per cent of the market. Renault and Feu Vert come next with around 15 per cent each, while Michelin’s Euromaster equity resides in fourth place. Perhaps that is why Goodyear Dunlop France has decided to revive the Vulco retail brand. In total the Vulco group (in Belgium, Spain, Portugal, and soon Eastern European countries) and its affiliated brands account for 3,000 points of sale. And while this kind of coverage does not mean Goodyear Dunlop is about to unveil a single pan-European retail brand it does offer the kind of size that is necessary to service large customer accounts.

International trademark concerns:

Continuing the international theme, T&A asked Arthur de Bok about the complications associated with Dunlop brands differing international ownership. While it is clear that Goodyear Dunlop Europe owns the rights for the Dunlop brand across the continent, other manufacturers can legitimately produce Dunlop products for sale in other parts of the world. De Bok told T&A that Goodyear Dunlop will vigorously defend its rights to produce and sell Dunlop branded products within its territory.
News of one such case emerged at the end of February when Goodyear Dunlop released details of its campaign to “to protect UK customers from unknowingly buying tyres that were not designed for road conditions in this market.”
As a result of this campaign, three companies have submitted to a high court injunction and have had to send 600 Dunlop tyres for recycling, to prevent these tyres from being used on UK roads. According to the company, this is the start of an initiative to remove unapproved tyres from the EU market.
The Goodyear Dunlop campaign targets all unauthorised imported tyres bearing the famous Dunlop and SP trademarks, but designed for their local markets, and not imported or recommended by the UK company. The company found that a number of these tyres originate from, and were designed for, Asian markets.