New warehouse, new tyre brand supporting MTS’s wholesale strategy

MTS wholesale director Graham Mitchell (Photo: Micheldever Tyre Services)

Bleak economic circumstances generally create brand strategy complications within tyre distribution. Drivers’ demand for lower priced tyres as cost-of-living pressures hit their pockets can alter the dynamics at play in wholesalers’ exclusive brand offerings, which are often pitched as premiumised products with additional benefits that make paying more than a budget price worthwhile. Yet down markets are also a time to build for the future, sowing seeds that will yield benefits when the outlook brightens. In the case of Micheldever Tyre Services (MTS), a new-build warehouse in Scotland to support its business growth north of the border and a newly added exclusive distribution deal with Petlas are two ways in which the company is building for the future and managing the current market situation. Tyres & Accessories asked Graham Mitchell, MTS wholesale director, about its exclusive brands, which also include parent company Sumitomo Rubber Industries’ Falken Tyres, General Tire, and GT Radial, as well as the development of its warehouse in Bellshill, Scotland.

Petlas enters MTS exclusive brands roster

One tyre market trend witnessed in recent economic downturns is the mid-range segment losing ground to budget. As a supplier of products from a wide spectrum of price points, T&A asked what MTS has witnessed in terms of the three major brand tiers in 2023. Graham Mitchell replied: “As a business we have experienced premium dropping into mid-range and a slight drop of mid-Range into the budget tyres segment. We remain at a comparative level in mid-range sales and this has been sustained by the expansion of our mid-range tyre offer, including adding the Petlas brand this year.”

The Petlas MultiAction PT565, the Turkish manufacturer’s first ever all-season PCR tyre, is now available via MTS as part of the exclusive distribution deal signed by the two companies (Photo: Petlas)

The addition of Petlas in February demonstrated MTS’s approach to building its roster of exclusive brands. A leading Turkish brand, Petlas demonstrated its ability to invest in growing international demand with a $360 million expansion to its light vehicle tyre production footprint in Kırşehir, Turkey. MTS emphasised Petlas’s “near-sourced production” as a key strength of Petlas. Mitchell told T&A that Petlas is “a brand on an exciting growth journey,” citing the new investment in manufacturing. He called the addition of Petlas to the roster “part of our commitment to ensuring the right brands are exclusively available for our independent dealers.”

The distribution agreement with Petlas covers the passenger car, 4×4 and light truck tyre segments across the UK. Mitchell said: “It means hero products such as the Full Grip PT925 and Multi Action PT565 all-season tyres, the Velox Sport PT741 and the Explero PT431 H/T luxury SUV tyres are now available to independent dealers, providing them with a compelling mid-range tyre proposition for their customers.”

T&A also asked Mitchell if there are other ways in which MTS is responding to the cost-of-living crisis to support its dealer networks. “In these challenging economic times, we have adjusted our business in various ways to support our customers. While bringing in new brands to support consumer choice and giving dealers an option to suit all pockets is a key part of our strategic approach, we also recognise that in a true partnership dealers want more than this and it’s where we believe our efforts can make the difference.

“For example, in sharing ideas and insight.  MTS creates a community within our dealer network to discuss industry challenges – such as our series of successful Business Seminars and EV Workshops.  We also work with third parties to bring business solutions – such as our preferential package for Garage Management Systems.

“We also continue to invest and support dealers with further training opportunities, retention campaigns and a range of added value benefits that equip our tyre dealer network to prepare for industry challenges, maintain their position against competitors in their locality and maximise opportunities when they become available within the market.“

New Scottish warehouse on track for spring 2024

An aerial view of Connect-70 in Bellshill, Scotland, Micheldever Group’s new warehouse in Scotland (Photo: West Ranga Developments)

Micheldever recently signed a pre-let agreement to lease the new Connect-70 warehouse in Bellshill, Scotland. Under the terms of the lease, the company will occupy the state-of-the-art logistics development for 15 years once practical completion is reached in January 2024. Dave Haddock, logistics director of Micheldever Group Limited explained the reasoning behind the move: “As our business has grown it became clear that we needed to increase the size of our main distribution centre in Scotland, especially with the growing demand for same day/next day deliveries of tyres to our customers. Due to this we made the decision to commission a brand-new warehouse – in Bellshill. Critically, as a new build it has allowed us to include the latest technology, permitting us to improve the efficiency of our logistics business as well as help deliver our corporate commitment to a 50 per cent reduction in our carbon footprint by 2030 and 100 per cent by 2050.”

The design takes account of modern logistics operators’ requirements, with 12 metre eaves, six dock loading bays, two level access doors and first floor offices extending to 345sqm (3,714sqft). Externally the site will accommodate a 50-metre-deep concrete surfaced yard with 16 trailer parking bays and ample space for turning in addition to 42 car parking spaces, including eight EV charging and three disabled parking bays.

T&A asked Mitchell for an update on how preparations to move into the new facility were progressing. Mitchell said the project “is on track and will be completed next spring as planned. As our operations have grown in the region, it’s become clear we needed to increase the size of our main distribution centre in Scotland, particularly in response to growing demand for same day and next day tyre deliveries to our customers.

“As a new build, we have been able to introduce the latest technology to help us improve the efficiency of our logistics business. The building has been designed with sustainability in mind and includes a range of energy-efficient features. This includes 8 EV charging points, 15 per cent roof lights, a roof-mounted Photovoltaic system and Air Source Heat Pumps, so the building can be heated without the use of fossil fuels.

“This will make a major contribution towards delivering on our corporate commitment to a 50 per cent reduction in our carbon footprint by 2030 and net zero by 2050.”