GiTi Tire’s rapid growth in the UK truck tyre segment

Unlike the passenger car tyre side of the business, which had been established and built up over several years before GiTi opened up its UK operation, the truck tyre segment had to be established from virtually nothing. Now the company claims a unit market share that puts it close to third in the UK.

Unlike the passenger car tyre side of the business, which had been established and built up over several years before GiTi opened up its UK operation, the truck tyre segment had to be established from virtually nothing. Now the company claims a unit market share that puts it close to third in the UK.

What is clear is that, based on a “very clean” business model, the company has grown from strength to strength over the years using a simple ordering process and “very good logistics/stock holding”, which has been run in partnership with a third party logistics provider. This is said to have been key to getting going in the beginning – that and offering customers something generally different. And by that GiTi representatives mean a reliable, quality product at a very competitive cost per kilometre.

Something else that has distinguished GiTi from other Chinese manufacturers is the fact that it was the first company to establish first a European-based, then a UK specific commercial vehicle sales and technical support team. Such has been the success of both the European and UK operations that the UK-based managers who have been there from the beginning (namely Richard Lyons and Peter Foulkes) now have Europe-wide responsibility for the company overall and for truck tyres respectively.

All of this was preceded by 18 months of product testing on real roads in the UK and other major European markets – which gave product planners and designers a heads-up as to which patterns, sizes and applications were needed in the various markets. When the EU team started in 2006 it immediately reassessed GiTi’s product offering and its specific suitability to the constraints and demands of the various European markets. Now the range that resulted from that feedback is being refreshed and upgraded once again in order to comply with and exceed the requirements of forthcoming European labelling legislation. In addition, close management of lead times with good stock control, customer service and forecasting models are all said to have helped.

On 1 April 2009 the company sold its first truck tyre in the UK market, but the growth of the company’s sales and share of the market since then is about as far away as possible from a joke. The latest estimates suggest that GiTi under the combined forces of the GTRadial and Primewell brand names could now occupy as much as 15 per cent market share, based on a 900,000 unit market. (Although it has to be said that this is at the low end of the range of estimates given for the UK truck market)

Of course this means rapid growth in successive years, but to give you a flavour GiTi reports that this part of its business is currently 20 per cent up in terms of year-on-year sales, while the overall UK commercial vehicle market is down 25-30 per cent (depending on who you ask), suggesting something like a 50 per cent swing for GiTi.

Going to the next level

Taking all these figures at face value, what is even more incredible is that this suggests GiTi is now the third largest tuck and bus tyre brand in Britain in terms of units sold. This means only global giants Bridgestone and Michelin are in front and well-known names Continental, Goodyear Dunlop and Pirelli behind. Hankook (which performed a similarly impressive feat in 2009) is another in the chasing pack, but the growth of this manufacturer’s market share reportedly slowed after it peaked in 2009 owing to supply problems and – due  the fact that the Korean manufacturer’s European factory in Hungary currently only produces passenger car tyres – a long shipping lag. Nevertheless, the fact there are two Far Eastern brands jockeying for position in and around the top five and several others growing fast is salutary reminder of the changing face of the business – and while Michelin and Bridgestone compete mainly with each other at the top of the tree, in the current environment none of the well-known names can take their historic positions for granted.

Now, according to Foulkes, GiTi’s focus is on track doing what it takes to go to the next level. As we go to press GiTi managers are in the final stages of preparing for the launch of its GiTi Assist programme in early September – a nationwide network of tyre dealers and service providers designed to support fleets that run on GiTi-produced tyres. Generations of imported tyre manufacturers (think Bridgestone and Hankook) have deployed this kind of model in the UK, generally with great success. Normally however there are two distinct differences: a) it usually takes longer than this b) so far Bridgestone is the only to offer a fully integrated multi-life retread programme (no Chinese brands have yet managed this). And yet this has been on the radar for GiTi since the beginning. Such was their drive to achieve this, executives told Tyres & Accessories of these plans as long ago as 2007.

Back then the plan was to have 500 partners in the Assist programme. With the gift of hindsight this very ambitious target may have been a little premature, but Foulkes explains that the necessary structures are now in place to enable to company to succeed with its updated plans now. And the reality is that the business’ growth up to this point has been somewhat impressive – as is the fact that the company is now routinely retreading its tyres (see Retreading Special for separate article focusing on this).

A dozen products slated for 2012 launch

As far as the products are concerned, the company is in the thick of a five-year product development programme specifically aimed at the UK and European markets. At the time of T&A’s interview two new patterns were slated for release in the weeks afterwards. However, looking at the situation with a wider European perspective GiTi is actually debuting six new CV tyres at the IAA 2012. This brings the total number of truck tyres the company has launched this year to 12. Two of the new GT Radial products – the GAR820 steer axle and GDL617 drive axle patterns – will form the foundation of six product debuts in hall 16, stand A43.

According to the company, the GAR820 steer axle pattern has been designed to respond to the fast development of modern medium sized trucks. Initially available in 215/75 R17.5, four other 17.5 sizes will go to market by 2013, namely 205/75 R17.5, 225/75 R17.5, 235/75 R17.5 and 245/70R 17.5. This tyre is M+S marked. The GDL617 drive axle pattern is a new generation long haul, high mileage M+S marked tyre featuring a non-directional and compact tread design with multi sipe arrangement. GiTi reports that the product is designed with the latest cool running compound technology to provide extended mileage and regular wear combined with excellent traction in both dry and wet conditions. Available initially in two sizes – 315/80 R22.5 and 315/60 R22.5 – the company has confirmed that 315/70 R22.5, 295/60 R22.5 and 295/80 R22.5 sizes are currently in development.

Other new products on show include the GSR220 steer axle pattern with extra wide shoulder ribs for mileage performance, GDR619 regional drive pattern for modern medium sized trucks, GDR621 regional winter drive tyre and GTL925, a long haul trailer tyre for high cube trailers.

Peter Foulkes, marketing director Europe – Commercial Tires at GiTi Tire, said: “So far in 2012 we have launched 12 new GT Radial tyres, and a further ten are due to come to market before the end of the year. All of our products are the result of the company’s advanced testing and evaluation programme which always has over 1,000 tyres on field test across Europe. Research, development and meeting the needs of each European market are paramount concerns, and alongside this year’s launches we have a very comprehensive product stream coming through in 2013 and 2014.”

All the new products are in the process of being tested for the labelling data that will become mandatory in November. The results have not yet been completed and therefore have not yet been released, however company representatives report that the “signs are looking good” in the truck and bus segment. Meanwhile GiTi is in the process of producing and distributing what it calls the “GT labelling guide” across Europe in order to communicate about the why’s and wherefores of labelling. Of course many dealers know all about the performance of the tyres they supply, but many are less informed about tyre labelling legislation than they would like to be and the chasm of difference between the business-to-business part of the tyre market and the business-to-consumer is that the customers really understand their products already.

GiTi’s approach to labelling is likely to be the same with trucks as it has been with passenger car tyres – release as much information as possible as soon as possible, warts and all. Apart from the fact that honesty breeds trust, GiTi’s management also recognise and respect hauliers and tyres dealers’ ability to understand the complex and subtle narrative that go hand-in-hand with labelling tyres in the truck and bus segment. Everyone knows that certain criteria such as tread depth can be tweaked to reflect lower rolling resistance scores, for example. But who will be fooled by a tyre like this that also lasts a significantly shorter time than it did last time? To be blunt, GiTi representatives would rather have a slightly lower rolling resistance grade on the label and better mileage and specifically cost per kilometre performance instead.

GiTi Tire reports that it is currently ranked fourth in the world for radial truck tyre production, a figure that includes the GT Radial and Primewell brands; if the latest figures pan out and if GiTi in the UK is able to sustain it, the company could be outperforming this in Britain. This leaves two questions for both GiTi and others in the market: Can such a position gained in a down market be retained when volumes return North? And can a growing unit market share position be matched over time with pound note value?