Bandvulc to wholesale Boto truck and bus tyres

One of the most striking stands at Brityrex was the black and yellow of Shandong Wanda Boto Tyre Co., Ltd. Obviously this company does not hail from these shores, but walking onto the company’s show stand, Tyres & Accessories was greeted by a familiar southern accent. As it turns out, while the stand was clearly there to promote the Boto name, the decision to exhibit follows on from the Chinese manufacturer’s decision to partner with one of this country’s largest retreaders/fleet tyre suppliers. According to representatives of both companies Bandvulc will now wholesale Boto truck and bus radial tyres in the UK as well as selling the tyres direct to its fleet customers through its Bandvulc Tyre Contracts business.

The relationship seems to have been formed a little over a year ago with the two companies reporting that they have been “working closely” for the last six months to a year. Sales have already started and are said to be “going well” with 1000s of units already having departed from the warehouse. Unit sales are currently running at 1000/month, but Bandvulc and Boto representatives were also using the occasion of the show to hold a series of meetings designed to further two brands’ growth strategy. In short the aim is for “strong growth development” here in the UK.

Boto first gained attention for the company’s OTR product range, but as the company’s manufacturing base has expanded to offering truck and bus and now passenger car radials too, so sales have increased. Speaking to T&A, Frank Zhang, Wanda Boto’s global marketing director, reveals that Europe has always been a key product destination for the company with the company having sought distribution in Germany, Spain, Denmark, Russia, Poland, Ukraine and Slovenia already in addition to the UK.

Boto’s German presence comes via an ongoing partnership with another wholesaler/retreader, Hammerling – a relationship that is said to have continued for 4-5 years already. As the Chinese firm produces Hammerling’s private brand, this also means Boto has found a route into the trailer OE market in Germany. And, looking ahead, neither Bandvulc nor Boto representatives wanted to rule out something similar taking place in the UK.

Russia is said to be the single largest destination at the moment, with truck and bus radial tyre sales here said to be currently around the 80,000 unit mark year-to-date and on-track for 100,000 by the end of 2012.

Consolidation amongst mid-sized Chinese players?

As far as products are concerned, Frank Zhang was quick to point out that the latest Boto tyres have already been certified as reach compliant by virtue of third party tests in the UK. And as far as labelling is concerned, at the time of our meeting during Brityrex week in October, rolling resistance, wet grip and noise test had reportedly been carried, but the complete results were said to be pending. Owing to the company’s environmental compliance and confidence in the pending labelling results, Boto is also marketing its products with a “Green Tyres” tagline.

Considering that Tyres & Accessories’ meeting with Boto’s global marketing manager took place only a couple of months after the announcement of the Sailun/Jinyu merger, the obvious question was: what is the company’s view of market consolidation amongst mid-sized Chinese tyre manufacturers? Currently Wanda Boto is ranked as 12th-13th in China, but the target is clearly to break into the top ten. At the moment, while there is no shortage of land getting approval for Greenfield tyre manufacturing sites is not as easy as it once was. Therefore, while not explicit or detailed references were made, growth by merger or acquisition is said to be something that Wanda Boto would consider in order to gain infrastructure, production capacity and complementary technological benefits.

Currently Wanda Boto produces 2.1 million truck and bus tyres a year, but this there is still space for another 900,000 units annually, according to Zhang. The next phase of expansion in this area will see factory output increased by 300,000 truck radials a year from March 2013.

As far as passenger car radial output is concerned, Boto has set itself the target of reaching the 15 million tyres a year market. Phase one was completed at the end of October 2011 and output is currently at 5 million tyres a year. Phase two is to be completed by July 2013 and is designed to double output to 10 million passenger car tyres annually.

Output and expansion is much more stable in the OTR segment, the most mature of Boto’s three key product divisions. The second phase of Boto’s OTR production was completed in March 2012 and is said to focus growing output in the 25-33-inch sector.