New Dunlop distributor for Australia & New Zealand

National Tyre & Wheel Limited (National) is to become the exclusive distributor of the Dunlop tyre brand in Australia and New Zealand. Wholly owned subsidiaries of the importer and wholesaler signed agreements with Goodyear and Dunlop Tyres (Aust) Pty Ltd and Goodyear & Dunlop Tyres (NZ) Limited on 20 September.

Announcing the arrangement, National comments that it entered into agreements to distribute Dunlop consumer and commercial tyres in both countries “with the expectation that no other distributors will be appointed.” Should another distributor enter the picture, National has the right to terminate the agreements.

National anticipates commencing its Dunlop tyre distribution in November 2023 in New Zealand and in April 2024 in Australia. The Agreements will have an initial term of five years from the commencement of the Australian agreement.

According to National, the new distribution arrangements strengthen its tyre portfolio by “adding exclusively imported premium car and truck tyres.” Dunlop products can largely be accommodated within National’s existing wholesale distribution businesses with procurement, warehousing, logistics and sales for the brand being entirely complementary with its existing operations. National will distribute Dunlop tyres in New Zealand through Exclusive Tyre Distributors (NZ) Limited. In Australia, selling will commence next April following a transition period commencing 20 September 2023, during which National will establish the necessary internal arrangements.

“The group’s vision is ‘going further to help our businesses and customers win’. Dunlop strengthens our existing product portfolio, and we look forward to working with Dunlop customers as we prepare for the launch of our sales efforts in November 2023 and April 2024,” says Peter Ludemann, managing director and chief executive officer of National Tyre & Wheel.

Financial impact

National estimates that the additional annualised revenue across Australia and New Zealand of AU$118 million (£61.7 million) as a result of its Dunlop distribution. The company’s Board of Directors expects the agreements with Goodyear and Dunlop Tyres (Aust) and Goodyear & Dunlop Tyres (NZ) will boost earnings per share once the distribution of Dunlop tyres commences.

As per the agreements, National will acquire “substantial” opening inventory that the Goodyear companies have already imported into Australia and New Zealand. The company does not expect any additional funding requirements for working capital or logistics support before 2QFY25 and it expects additional funding, if any, to be small compared to the earnings potential of the Dunlop distribution rights. National also expects a ”modest increase” in fixed costs as a result of its Dunlop tyre distribution.