E-Tailers and Autocentres are on the Up
What will the tyre retail business look like in five years time? Who knows. As I have learnt to my peril in this column, prognostication is a dangerous business. Let’s not recall how last year I wrote “unless there is an unlikely stay of execution” regarding the implementation of s-marking regulations (see T&A’s August 2009 issue for more on this). But I digress. The news at the end of February that Halfords bought Nationwide Autocentres for £73.2 million (see page 14 for complete coverage) says something about how tyre retail is evolving. Along with the purchase announcement came plans to rebrand the chain and the affirmation of existing plans to double the number of branches to 424. When you consider that the second largest tyre retail chain in the country, ATS Euromaster, reported that it was “reviewing” up to 80 of its 456 branches last September, it is clear that size gap between chains at the top of the two sectors is narrowing. True, Autocentres don’t focus on tyre sales like the traditional outlets do, but there are signs they are considering how to increase their focus in this area.
Continue ReadingWhat Does Future Hold for Truck Tyre Retreading?
2009 may have been a difficult year for the tyre business in general, but the new truck tyre sector faired particularly badly. And as a knock-on effect of the reduced number of miles driven by fleets in the slowing economy, retread product was also hit (for example some figures suggest UK retread output was down 20 per cent this time last year). However, this improved during the course of the year and with retreading companies securing an increasing share of fleet business, Devon-based Bandvulc tyres is looking forward to a bright future in the international logistics business. In a period of expansion that has impressed even the truck and bus market’s leading new tyre manufacturers, in recent years Bandvulc has grown to an influential position in certain segments, particularly to supermarket fleet tyre supply. Along the way the company has developed a reputation for environmental consciousness and recently took on an expanded new tyre distribution role in order to extend the service it can offer its growing fleet customer base. Speaking to Tyres & Accessories, company director and co-founder Richard O’Connell defines three important dimensions for those in the retreading business to consider: environmental, technical and political.
Continue ReadingBlackcircles.com Advertises on Tesco Forecourts
In January this year, online tyre retailer continued its strategy of merging traditional and online marketing methods by delivering promotional material to 20 Tesco Petrol Stations around the UK. According to the e-tailer’s website, the company’ s communications and promotion manager covered over 1000 miles in five days, visiting selected Tesco stores. His objective was to introduce the company to Tesco Staff, while delivering A5 fliers, putting up posters and checking air pump advertising fascias which had been put up the previous week.
Continue ReadingHalfords Aims to Add 200 Nationwide Branches, Double EBIT
With 224 branches already and another 200 on the way following Halfords’ acquisition of the business, Nationwide Autocentres is on the brink of truly becoming a nationwide operation. And while the company’s core business is MOT and servicing rather than just tyres, the scale of the new business alone is likely to have some degree of impact on national tyre sales. Nationwide currently reports that it serves 500,000 customers each year. These are a mixture of fleet (25 per cent of revenues) and private (75 per cent). The company’s strategy is to differentiate itself within its market by being the only national operator to provide dealership quality service at lower prices. And this customer proposition is supported by a strong website. With companies like Kwik-Fit increasingly offering a wider range of services and companies like Nationwide increasing their interest in tyres, the gap between the traditional tyre specialist and autocentre is narrowing.
Continue ReadingNationwide Autocentre Purchase Brings Halfords Full Circle
The latest developments in Halford’s complex car servicing history (see Halfords Buys Nationwide Autocentres for £73.2 million – 18/02/10), bring with them a distinct sense of déjà-vous and highlight the cyclic nature of ownership in this industry. From Halfords point of view the latest venture represents a new beginning for a business that is radically different to when it last tried car servicing.
Continue ReadingHalfords Buys Nationwide Autocentres for £73.2 million
Halfords Group has bought Nationwide Autocentres in a £73.2 million deal, which managers described as the next “logical step” in its expansion plans. Nationwide, which has been owned by private equity group Phoenix since 2006, employs 900 mechanics and serves roughly 500,000 customers a year. Nationwide offers customers and fleets MOTs, servicing and repairs, but also recently increased the emphasis on tyres at its 224 outlets.
Continue ReadingKwik-Fit to Sell Insurance Business for £200 million
Ian Fraser, CEO of tyre retail giant Kwik-Fit is preparing to sell its insurance wing for in excess of £200 million. According to a report published in the Sunday Times on 14 February, Kwik-Fit has hired bankers at Credit Suisse to carry out a review of Kwik-Fit Financial Services. The report points out that a sale of the operation would help Kwik-Fit cut its debts of around £822 million.
Continue ReadingKwik-Fit Establishes Russian Tyre Retail Franchise Partnership
On 10 February Kwik-Fit Group announced that is has entered into a Frachise agreement with the ROLF Group, one of Russia’s leading automotive businesses. According to the company, the Russian centres will be established under a new brand – ‘White Service’ - for which Kwik-Fit has established a dedicated support team. As well as providing on the support “on the ground” in Russia, Kwik-Fit is inviting White Service managers to visit the UK to shadow their UK counterparts and share expertise. Prior to this deal Kwik-Fit gained similar experience with over 200 existing franchise outlets across eight countries.
Continue ReadingJoin the EDIWheel Discussion
When Tyres & Accessories was invited to attend TIF’s Electronic Data Interchange Wheel (EDIWheel for short) seminar in December, the magazine was pleased to attend and report on the discussions that took place for the benefit of the wider tyre industry. Following our report in the January issue of the magazine, it appears that our coverage has been something of a catalyst to the discussion of this issue within the various parts of the industry.
Continue ReadingEDIWheel Seminar Paves The Way for E-Business Protocol
In December, around 70 members from the tyre industry gathered together at Coventry to attend a seminar, organised by the TIF. The seminar had only one subject – EDIWheel, or Electronic Data Interchange Wheel. The 70 delegates represented a true cross-section of the industry and, in his introduction, David White of Kwik-Fit, said that 21 per cent of the audience were from the e-commerce sector, 20 per cent were wholesalers, 37 per cent manufacturers, 10 per cent from trade associations and 14 per cent were tyre dealers.
Continue ReadingAll Change in UK Commercial Vehicle Tyre Market 2009
In 2009 Bridgestone and Michelin remained relatively stable market leaders in the UK commercial vehicle tyre market. However a real turnaround has taken place in the rest of the top five. According to Tyres & Accessories’ research, the recession has resulted in traditional truck and bus tyre market stalwarts Goodyear Dunlop and Continental being leapfrogged by relative newcomers Hankook, which now resides in third place with a 20 per cent market share. While Continental didn’t explicitly confirm all the details of T&A/tyrepress.com’s research at its annual market trends briefing in London on 11 December, a spokesperson did concede that the company had slipped to fourth place in 2009 (holding 15 per cent of the market), after its group brands occupied third position in 2008: “We reached third position in 2008, but the challenging economic conditions mean that we are currently fourth in the market with an aim to regain ground in the next three years.”
Continue ReadingConti: 2009 Market Volume Constant, Segmentation and Value Down
2009 may have been a “turbulent time” in the UK passenger car and van tyre markets, but some premium tyre manufacturers finished the year better than it started; and there are signs pointing to the recovery of premium manufacturer’s sell-in sales. That’s the view of Continental Tyre Group executives, who spoke to Tyres & Accessories at the company’s annual market trends briefing in London in December. As well as presenting the company’s influential overview of market sales and general trends, Conti representatives also gave a fascinating insight into how the government’s highly successful scrappage incentive scheme may affect future car sales. Continental estimates the UK car, 4x4 and van tyre market totalled 33 million tyres in 2009, a slight drop over the final figure from 2008. However, while 2009 is said to have seen motorists hold off getting new tyre purchases, the overall numerical impact on the market is said to have been limited. Instead Continental re-affirmed that the UK tyre market has been experiencing a so-called “de-segmentisation” effect with consumers buying tyres of lower unit value and brand equity than they purchased pre-recession (something Tyres & Accessories first observed in May 2009 following strong Korean-brand tyre sales the preceding March). What is interesting about Continental’s analysis of this effect is that they are the only company so far to suggest that there is a significant group of consumers that are dropping two segments (premium to budget, for example), double de-segmenting if you will.
Continue ReadingTWG Chair: Tyre Wholesalers Again Show Recession Resilience
As a man of 40 experience in the tyre trade – and with it the knowledge of three recessions – Tyre Wholesalers Group chair Ashley Croft is in a good position to comment on the effects of the current financial crisis (which, depending on whose opinion you are heeding, may or may not have come to an end). In his speech at the 2009 TWG Annual Lunch, Croft described the past year as a “harsh period”, but made clear that the recession had hit hardest in the tyre business where manufacturers were most committed to supplying original equipment. However, he stated, “replacement market traders have once again proved themselves to be relatively recession-proof”.
Continue ReadingPremium Tyre Message Must Permeate Supply Chain: Rickard
In what Tyre Wholesalers Group chair, Ashley Croft called, “a clear challenge to the tyre industry”, Jim Rickard – managing director of Michelin Tyre plc – called on the members of the TWG to match the “sophistication…of the manufacturers within the whole supply chain”. Speaking at the Group’s Annual Lunch in Droitwich Spa, Rickard expressed uncertainty about the way information about tyres is transmitted to customers: “I’m not sure the message about performance characteristics gets through at the point of sale.” He argued that new legislation – exemplified by forthcoming tyre labelling laws governing noise, wet grip etc – was making visible to the consumer proof of a tyre’s superior characteristics over rival brands, thus allowing components of the supply chain to justify to customers the relative cost of one product to another.
Continue ReadingHas Pirelli Lost Fifth Place in European TBR Market to Hankook?
Market share data released by Hankook shows that Michelin remains the undisputed leader in both the car and truck tyre segments. However, the previously exclusive stable of top five tyre manufacturers has gained a new member in 2009. Hankook’s decision to publish its projections of how the land lies, following one of the most tumultuous periods in the market’s history, may only have happened because it was a good year for the South Korean tyre manufacturer, however the fact remains the unusual combination of events experienced in the last 12 months means there are signs that the status quo has been disrupted. Looking forward the question is: will the company be able to sustain this position in the years to come? Here’s Hankook’s calculation of how the European car tyre market will look at the end of 2009. Michelin remains market leader with a 20 per cent market share, followed by Goodyear Dunlop (18 per cent). Bridgestone are next on the list with a 12 per cent share of the market, followed by Pirelli with 8 per cent. And here’s where things get interesting. Hankook are in sixth place with a 7 per cent market share, snapping at the heels of fifth-placed Pirelli who are only one percentage point ahead with 8 per cent.
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