Growth continues at Euro-Tyre

A year ago the newly appointed managing director of Euro-Tyre BV, Frank van Leeuwen, reported that the Netherlands-based wholesaler enjoyed growth in excess of 25 per cent in 2010. Yet the company, like many in the business, needed to remain on the ball in order to avoid the widespread tyre availability issues brought on by an improving economy. Now, 12 months later, Euro-Tyre says that while the problem of availability and supply lies in the past, the pattern of strong growth has continued.

“Our growth last year was good, it was again around 25 to 30 per cent in total,” purchasing manager Mischa Driessen shares with Tyres & Accessories during a recent visit to Euro-Tyre’s headquarters in Venlo, not far from the German border. This growth, he adds, took, and continues to take, several forms – growth in unit sales, an ever-expanding product portfolio and deeper inroads into new territories.

Infinity ‘very important’ for us

Stored at the company’s growing warehouse facility in Venlo are some half a million tyres, and unit turnover is high. Customers can choose from a product portfolio that covers the passenger car, commercial and industrial segments and includes premium down to cost-favourable and budget brands. “We are a full supplier – we normally have everything in stock from small to big,” Driessen points out. “And if it’s not in stock we can get it fast and get it to the customer as fast as possible.

“It’s also important for our customers that we can offer them a good budget brand,” he adds. “Infinity is our main budget brand. We have this brand for several European countries – Benelux, Germany, Spain, Portugal, Austria and the Czech Republic.” In the UK the brand is distributed exclusively by Bond International, a company Euro-Tyre has a good relationship with. Sales of Infinity tyres grew at a similar level to overall sales at Euro-Tyre last year; Driessen says Infinity sales were up 25 to 28 per cent over the 12 month period, a repeat of the growth seen in 2010. “We don’t give out numbers about the percentage of our total sales accounted for by Infinity, but I can say that the brand is very important for us,” the purchasing manager comments. “The most important Infinity lines are pcr and 4×4, but when customers buy Infinity they buy the whole line. They don’t cherry pick as they are happy with the brand and so they see it as their own home brand.”

In the markets where Euro-Tyre holds Infinity distributorship, the company is selective with the dealers it works with and has measures in place to ensure everybody is happy with the brand. “In one city, for example, there is no competition,” Driessen elaborates. “In each city we normally have just one dealer – we don’t want competitors selling the same brand to customers within the one city.”

Gerutti – a new private brand

Euro-Tyre’s relationship with Infinity dates back to 2003 and both wholesaler and the China-based manufacturer have worked together to ensure the brand’s success. The private brand was recently joined at Euro-Tyre by a second label, which the Dutch company is now developing and growing. “Since the end of last year we’ve had a new private brand, it’s called Gerutti. It’s manufactured in China and currently available in pcr and van fitments. We are working strongly to build up the range and the factory is very willing to fulfill our needs.” Euro-Tyre holds European exclusivity for Gerutti outside of the UK and Ireland. The new brand is positioned under Infinity and at the moment Euro-Tyre is working with its sales people on promoting the brand in the market. “Gerutti is a new brand, and you know that when you introduce a new brand into the market, it takes a lot of time,” the purchasing manager adds. “It’s different working with a budget brand in continental Europe than it is in the UK.”

 Growth in Southern Europe

Early in 2011 Frank van Leeuwen shared that Euro-Tyre had established a foothold in Portugal and was looking at the neighbouring Spanish market. These plans have been very successfully implemented, Mischa Driessen is pleased to report: “We are growing very fast in the Iberian market. Last June we opened a new, larger warehouse in Portugal and have now opened a new small warehouse in Spain, near Barcelona, and we distribute from there too. This is a pilot project, and we have a very strong focus on that market. Infinity is also an important brand for our Iberian company.” Driessen adds that Euro-Tyre’s warehouses in this region work solely with small distribution shipments; the average customer order is 2.9 tyres.

Availability – past, present and future

In regards to the availability issues that were a thorn in some wholesalers’ sides in 2010 and early 2011, Driessen says the situation was largely resolved by the middle of last year. “In the end, all tyres came, but after the season. I think all wholesalers ordered larger quantities than normal in December 2010 or at the beginning of last year. Supply in the first quarter of the year was not good, but in May, June, July, most back orders were delivered.”

A major sticking point with availability back then was winter tyres, which some people couldn’t source for love or money. Despite the shortage in the winter of 2010-11, Euro-Tyre opted not to up its order for this season. “We didn’t order more in the winter season than we did in the previous year as we thought demand hadn’t increased, and availability was better,” comments the purchasing manager. “In the end the winter came far too late so that was a good decision. In December and January we bought large quantities of winter tyres at good prices as people needed money. We will keep them in stock until the next winter.” On the subject of winter tyres, Driessen notes that in the Netherlands, as in the UK, there is no legal requirement to fit winter tyres, but after two hard winters these products have become a topic of conversation.

For this coming year, Driessen anticipates much better product availability. “For summer pre-orders we are playing shorter on the ball. Unlike last year, we are only forecasting two to three months in advance. We intend to forecast our winter tyre requirements at a later date compared with last year, when we began to order in March and April. After this winter we expect to hear less noise in the market, less talk about the winter tyre market. It won’t be as crazy as the last two years.”

Outlook for 2012

As 2012 unfolds, the Dutch wholesaler’s goal remains to ‘keep, get and grow’ with its customers. As Driessen expounds, “we want to gain new customers, to know the customers and grow with the customer.” The purchasing manager believes this year will be different from other years as customers are showing greater caution when making pre-orders. However he is optimistic that if Euro-Tyre offers good service and availability, then the company will still see growth in 2012.

Projects for this year include a continued investment in IT, particularly in the areas of logistics and JIT (just-in-time) deliveries. Driessen believes Euro-Tyre serves as an ideal distribution centre as it holds a key logistical advantage over tyre manufacturers: ”You can’t ask a retailer to buy just one specific premium tyre brand. The retailer must fulfill all the needs of its customers.” The Dutch wholesaler uses its own vans for JIT deliveries in the Ruhr region of Germany – an area home to 25 million people, thus a focus for JIT – and it also supplies JIT to South Holland and Belgium.

Looming large on the horizon is the introduction of the European tyre label. Driessen believes the coming months will be interesting for those doing business in the European tyre market, but he confirms that the manufacturers Euro-Tyre works with, most notably the Infinity producer, have given assurances they are ready come November. “I think there will be surprises in the market in general, the same as there was with Reach,” he reflects. “Not being ready can kill a brand. Nobody can afford to be last, but I think labeling will also bring new opportunities.”