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The ears of the European Tyre & Rubber Manufacturers Association must have been rather warm as Ashley Croft, chairman of the Tyre Wholesalers Group of the NTDA, gave his speech at the group's annual lunch. Around 75 people – customers and suppliers – attended the event on 22 November at the National Motorcycle Museum and, as well as lunch, there was plenty of food for thought, particularly for manufacturers of premium brands.
Stoke-based bus and coach operator Bakers Coaches has launched its first hybrid bus service, ahead of its 75th anniversary celebrations in November. The three hybrid buses, which use a Volvo B5 RLH chassis with Wrightbus Gemini bodywork, went into operation on 3 October and will operate under the bakerbus brand – owned by Bakers Coaches. The buses have been purchased primarily to carry students and are used on a dedicated contract with Staffordshire University and London Midland Trains. The low-floor, diesel-electric buses are the greenest, cleanest buses in the county.
After an eight-year long mutually beneficial relationship Maxxis International UK Ltd has decided to part company with its long-term distribution partner Grouptyre. The news came in the form of an announcement that the two companies have ended their exclusivity agreement, which implies that the firm will continue supplying Maxxis tyres for the time being. However, Tyres & Accessories understands that there is more to the story than that.
Based just North of York in Pocklington, the relatively small size of this North Yorkshire town belies the current scale and influence of the tyre wholesale operation it is home to. Bond International was founded in 1966 by Reg Bond when the qualified automotive engineer suffered an industrial injury that blinded him in one eye. In spite of the incident, Bond demonstrated great vision by investing his ensuing compensation into expanding his business to incorporate tyre wholesale. Now the company is firmly in the top flight of UK tyre wholesale operations and has purportedly risen as high as number three in recent years (see next month's Wholesale Feature for an update on the current state of UK tyre wholesaling). With an overseas office already located in Singapore, now Bond is considering its European options, while pointing out that there are still opportunities in the UK. On top of this the company recently launched its first foray into the online marketplace, which executive hope will – over time – develop a whole new source of business for it and its retail customers alike.
F1 Autocentres has announced that it will offer three levels of car servicing designed to meet better the varying needs of Britain’s motorists. The newly identified three options comprise interim, full and major services. The Interim Car Service is designed to maintain cars between annual services, states F1 Autocentres. The new Full Service consists of a 66 point check and is an important part of a cars annual maintenance programme, while the new Major Service checks 71 points, covering all areas of essential maintenance comprehensively. The company says that each service is designed to meet the various needs of motorists, carried out by fully trained technicians, and perhaps most importantly is competitively priced.
Kwik-Fit Group has confirmed earlier reports that PAI Partners has sold the fast fit chain to the Japanese Itochu Corporation for £637 million. The purchase price is said to include £457 million of debt, which will be paid off in full at completion, according to a Financial Times report. The deal is reportedly Itochu’s biggest investment in the UK and follows its acquisition of Stapletons in 1994. The company is also already talking about the potential synergies between the two businesses:
During November one member of Grouptyre entered administration and four more formed a joint venture to maintain supply to national customers. Now that the joint venture is poised to make another acquisition, this time of WJ Wood & Sons, Tyres & Accessories exclusively interviewed Grouptyre managing director Karl Naylor in order find out more about the reasons behind the recent events. Needless to say a lot has been happening within Grouptyre over the last few weeks, with what Naylor diplomatically described as “unforeseen problems at one of its larger member companies…resulting in rapid changes having to be put in place to maintain its national coverage and service to customers.”
However, while the market officially got wind of the story in November, it appears Grouptyre’s members had been making every effort to secure Broadway’s future as far back as the summer. At this point plans were being discussed to address concerns that Broadway’s financial performance was weaker than Grouptyre was comfortable with.
Stapleton’s Tyre Services latest and greatest 100,000 square foot warehouse has been developed to be the leading tyre wholesaler’s UK “super hub.” Positioned near the literal mid-point of England, the new depot is central to the company’s existing warehouses. Previously the largest of these were developed to be Northern and Southern hubs, but now they will be fed by the large Birmingham location, which is coincidently located a stone’s throw away from Goodyear Dunlop’s Tyre Fort in the Erdington area, Birmingham. Tyres & Accessories recently met Ashley Croft, head of Stapleton’s supply chain, for an exclusive first look at the new facility.
The first thing you notice after you arrive inside the Erdington, Birmingham location – which is impossible to miss owing to the largest Stapleton’s signage in the company fixed to the road facing wall outside – is that the new super hub is already stocked with a full-range of about 3500 stock keeping units (SKUs).
Yesterday saw the Tyre Wholesalers Group Annual Lunch held at the National Motorcycle Museum in Solihull. At the event, TWG chair Ashley Croft reviewed the year in UK tyre wholesaling, saying that “TWG members are fortunate within the replacement side of our market to have enjoyed a year of consistent market size, although the busy first half of the year has been balanced by a quieter period following.” Croft also looked forward to 2011, in which he forecasted “a year of challenges” for TWG members, commented on the rising interest in winter – or cold weather – tyres in the UK and the long-term potential effects of a consistent, large seasonal market; the persistently low availability of product throughout the year; his concerns about tyre labelling; and the education of non-NTDA member retailers. Below, tyrepress.com presents the transcription of his speech.
Toyo Tire & Rubber has announced its decision to acquire all shares in Malaysia-based tyre manufacturer Silverstone Berhad. The company’s board of directors says it has a stock purchase agreement with Silverstone’s sole shareholder, Silverstone Corporation Berhad. According to the company’s statement, Toyo’s acquisition of Silverstone puts it in position “to make a full-scale entry into the fast-growing Southeast Asia market.” The stock transfer to Toyo from Silverstone Corporation Berhad is scheduled to take place in late January 2010 and will cost Toyo approximately 12,538 million yen (£98 million).
B-Quik, Thailand’s biggest independent automotive repair organization, saw revenue grow over 30 per cent in the first 6 months of 2010, this despite the unrest in the Thai capital in the month of May. The company has opened two new stores so far this year (one on the island of Phuket and one in Bangkok) and now operates through 64 outlets. For the second half of the year another seven new stores are confirmed and three more are pending. B-Quik adjusted its revenue expectation for 2010 to exceed 2.5 billion Thai baht (£50 million, 61 million Euros). Growth is almost equally split, 15 per cent from like for like same store increase and the other 15 per cent from new stores build last year and this year. The sales growth is divided evenly over the various product groups but aircon repairs and servicing and oil/filter changes lead the growth.
What Car?’s tyre test team make a good point highlighting the differences between some premium and budget products in their recent tyre test. But it appears they went a step too far when they entitled the feature “why budget tyres could kill” lumping the three cheaper products (Arrowspeed, Ovation and Sunew) together in the their final conclusion. It might sound a touch pedantic, but the addition of the word “some” in the headline may have been fairer as this would have avoided generalising about the overall quality of tyres.
It didn’t take long after Tyres & Accessories reported on the tests on our daily e-Newsletter for the manufacturers involved to take up their right to reply. The Korean manufacturer behind Kwik-Fit’s popular Arrowspeed tyre brand arguably has the best case for disputing being tarred with the saw low-budget brush as the Ovation and the Sunew tyres.
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What Car? has named and shamed budget brands in a test warning that tyres like these “could kill.” In the test published online on 4 August 2010 What Car? measured the performance of the Arrowspeed CP661, Continental Premium Contact 2, Goodyear Optigrip, Michelin Pilot Sport 3, Ovation VI-182 and Sunew YS112 in dry braking, wet braking, lateral grip and noise tests. The Michelin Pilot Sport 3 came out top, with particularly strong results in wet and dry braking. However, there were some shocking outcomes in the budget sector when it came to braking and noise.
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Kwik-Fit Group Limited has announced that it has agreed to sell its UK Insurance business (KFIS) to Fortis UK Limited for £215 million, a division of Belgium-based Ageas. The transaction is subject to the usual regulatory approval, but is expected to be completed in the third quarter of 2010. According to the company, the transaction marks the successful completion of a strategic review for the KFIS business announced in February 2010.
Proceeds from the sale will be used to repay debt which, together with funds injected into the business as part of the recently completed covenant reset exercise at the end of 2009, will reduce net bank debt to £486 million. In an official statement on the matter, company representatives said the move leaves the business “in a strong position to exploit growth opportunities in its core fast-fit businesses.” It will also go some way towards halting speculation that the company’s private equity owners (PAI) are looking to sell the entire business as the rumours themselves appear to have been based on the size of Kwik-Fit’s debts.
Halfords Group Plc has reported preliminary full year 2010 results (April to April) showing sales of £831.6 million, up 4.6 per cent on 2009 and up 0.7 per cent like-for-like. The company’s gross margin grew to 54.4 per cent, while operating profit shot up 17.5 per cent to £119.7 million, representing 14.4 per cent of sales (2009: 12.8%).
The acquisition and “successful integration of Nationwide Autocentres” – four of the network’s branches are already said to have converted their livery – were clearly important parts of the company’s strong results. David Wild, Chief Executive, commented: “Halfords has had an excellent year…Sales growth in core areas, margin expansion and disciplined cost control has led to the delivery of 25 per cent earnings growth…In addition we made our first acquisition, Nationwide Autocentres, which represents a natural extension of Halfords service proposition in the car aftermarket and is already making a good contribution to the Group.”
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