Who Wears the Trousers?
The subject of grey marketing raises the hackles of wholesalers and manufacturers alike, with each blaming the other for its existence. So imagine my surprise when Kumho UK managing director, Steve Tidmarsh tackled the subject head-on, telling delegates at November’s Tyre Wholesaler’s Group (TWG) lunch that it is “the manufacturers who drive the grey market.”
Continue Reading‘Manufacturers…Drive the Grey Market’
Almost six years to the day after the Levi versus Tesco ruling (see page three for more on this), Kumho UK managing director, Steve Tidmarsh, used his recent NTDA Tyre Wholesalers Group (TWG) speech to address the subject of grey importing in a refreshingly direct fashion. “The grey market,” he observed, “always seems to increase when supply rates are poor.” He continued: “For some reason this enrages wholesalers, but let us be fair, it is often exploited by them. However, to balance that, it is also right to state that it is the manufacturers who drive the grey market and currently with the weak US dollar products are a-plenty,” he explained.
Continue ReadingFair Distribution of Service
This year’s NTDA Tyre Wholesaler’s Group (TWG) lunch in November continued in the tradition of recent years, with thought provoking speeches on interesting industry topics. TWG chairman, Ashley Croft focused on the subjects of manufacturer distribution and tyre safety policy. Referring back to his comments on the subject 12 months ago, Ashley croft opened by querying Christian Salvesen’s intention to become the sole logistics supplier to the tyre trade: “I wonder if their report of a 19 per cent profit fall, attributed to higher than anticipated start-up costs on distribution deals with tyre makers, has caused a rethink to the attractiveness of their stated strategy. From the point of view of companies receiving delivery from this logistics supplier, they still have a long way to go before they reach the level of quality of distribution achieved by any of the UK wholesalers. (In June Tyres & Accessories reported that profits at Christian Salvesen fell 19 per cent, at least partly due to the higher than expected start-up costs encountered in its distribution deal with Goodyear Dunlop and Continental Tyre Group in the UK. At the time, the news extended the UK transport divisions operating losses to £4.6 million for the year. By 2 October, Groupe Norbert Dentressangle had offered to buy it.) Ashley Croft continued: “Kwik-Fit also believe they can distribute their own requirements more efficiently and at less cost than outside logistics companies with their planned new distribution hub. As wholesalers, we must be careful to ensure we do not then further subsidise the manufacturers true cost of distribution to smaller retailers. We have already witnessed a narrowing of terms between smaller retailers, and ourselves that I do not believe truly reflects the cost to serve. I am sure that in the negotiations between manufacturers and their logistics suppliers, rates will be increasing rather than decreasing, and should be passed on in accordance with the high cost that small volume deliveries incur.” ‘It’s a penguin; it won’t fly’ From here Croft drew parallels with the 1991 proposed generic ‘Tread Carefully’ campaign, designed to promote the publics awareness of 1.6mm tread legislation: “I believe that Chuck Davies, sales director for Michelin at the time, was being prophetic about our industry in general when he made his well publicised comments about this campaign, ‘its a penguin; it wont fly,’ in a reference to the apparent impossibility of the manufacturers working together and with the various sectors of the industry.” Croft observed: “The politics of our various organisations and the members they represent do not apparently permit working together for the common good.” And this, of course, has implications on recent projects to paint an accurate picture of the UK replacement market: “Our net replacement market in the UK has, I believe, grown substantially over the last two years - and I recognise that this is not shown in ERMC statistics.” (At this point it is worth mentioning that NTDA members have recently been cooperating with one of the world’s leading market research firms, GfK, to produce what sound like a fascinating sell-out market report. Initial conversations with GfK representatives suggest that this project could represent some of the most accurate “sell-out” sales data so far seen on the UK market, going down to size and speed rating. Initial results are expected in January 2008. Keep an eye on Tyres & Accessories magazine and www.tyrepress.com for more details on this). Ashley Croft continued his speech: “Tyre manufacturer surveys tell us that ‘brand,’ and ‘trust in the brand’ are major influences upon the decision making processes of tyre buyers. The dramatic growth of brands such as Linglong, Jintong, Infinity, Maxxis, Sunny, Wanli et al would suggest there is a different over-riding influence; that of price! Let me be perfectly clear: as a wholesaler, I would much rather sell a major brand product at £75 than a budget brand product at £25. Personally, I am also not happy to see such a low market share position held by the major brands. There is, however, a seemingly insatiable appetite for budget brands in this country, a point that does not appear to have been missed by the ETRMA. Concluding Croft said: “Until such time as we are able to work together as a cohesive industry we shall never be able to effectively communicate our message to the buying public…I believe we should take the comments of Chuck Davis from 1991 as a challenge, and not an epitaph.
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Independent Thinking – Bridgestone UK’s retail strategy
Bridgestone UK’s general strategy of focusing on independent dealers is clear with 90 per cent of its sales going through this channel and only 10 per cent going through equities such as Kingsway, ATS Euromaster and HiQ. If anything the management sees its relationships with key independent dealers as even more important to truck tyre sales. Sales figures given at the Truck Point conference seem demonstrate this: 94 per cent of Bridgestone CV products are supplied through Truck Point dealers.
Continue ReadingUK Fleet Success Keeps Bridgestone Growth Consistent
In contrast with some other premium manufacturers Bridgestone’s 2006 and first half 2007 sales both grew 1 – 2 per cent. According to Bridgestone UK’s commercial sales director, Greg Ward, the key to the company’s continued growth in the mature market is consistency and continuity. From his perspective, the recent news that the company has retained the Ryder contract for another three years is case in point. (In this instance Bridgestone beat off early competition from another competitor to retain the 10-year long working relationship it has with the Ryder fleet). “If the second half is as good as the first half, I will be delighted,” added Ward. Most sources agree that the influence and volume of Chinese products grew during 2006, but at the same time premium manufacturers like Bridgestone appear unfazed by their rapid growth. In response to the question of increased competition from the Far East Greg Ward commented: “Chinese & Budget brands may be trialling their products on fleets, but the biggest, most professional fleets need professional service providers in addition to tyres. The Truck Point Network is a real winner in this respect.” In addition, the recent US recall situation should be take as a warning, Ward added.
Continue ReadingGiti Tire Launches Truck Service Programme
Much has changed since Tyres & Accessories first met the then fledging Giti Tire Europe team at the 2006 Essen Show. Now, more than a year later, the staff count has doubled with the addition of some high profile executives; and sales are up 30 per cent year-on-year. When Tyres & Accessories met up with Giti Tire Europe’s UK, North & East Europe, and Russia sales director, Richard Lyons; and marketing manager Europe, Peter Foulkes, news of the Giti Assist truck service programme and the company’s new Heifei factory were top of the agenda. But these expansion plans are only the beginning, and the word is that an extensive new marketing programme is underway, with a rack full of new product releases scheduled for next year.
Continue ReadingHow Blackcircles uses Conventional Media to Boost Online Sales
Blackcircles.com’s rapid success, gained through adapting dotcom technology to suit the tyre business, is well documented. According to Plimsoll’s 2007 analysis, the online tyre enterprise is the 32nd fastest growing company in the UK tyre business and blew away industry sales averages by posting sales growth of 80 per cent. So what’s the secret? The ever-increasing number of “fitting stations” listed as Blackcircles franchisees is one reason for the business’ rapid growth, but the company’s use of conventional media strategies appears to be another way it has kept traffic coming. As Blackcircles prepares to sign-up its 300th franchise garage, the company has also launched a service designed to give consumers instant access to mechanics across the UK. The move follows the launch of www.mechanic-torque.co.uk in which consumers can post queries about their car and receive an expert answer from a Blackcircles franchise mechanic. Since launching in early 2006, the Blackcircles franchise network has spread across the UK. The franchise arrangement sees local independent garages retain their identity, but gain access to Blackcircles’ stock checking and ordering systems. Blackcircles plans to increase the number of franchises to 500 by December and 800 within a year.
Continue ReadingPoor Telephone Skills Hand eTailers Opportunity
The idea of an online tyre replacement market might sound like a less-than-significant niche to you, but when you consider that the UK and Germany are not only the most “wired,” but also the two of the continent’s largest tyre markets, it is clear that this means a lot of tyres and potentially a lot of money. The total online shopping market is currently worth £21 billion and is expected to triple in the years to come. As far as tyres are concerned, the leading online players are banking on the increase in broadband availability bringing extra customers organically, but one report Tyres & Accessories has seen suggests the poor communications skills of some conventional businesses are handing e-tailers even more opportunities.
Continue ReadingKwik-Fit Fleet Launches ‘Intelligent’ Online Tyre Management
Kwik-Fit Fleet has launched a new web-based ‘intelligent’ tyre management authorisation and reporting system, which is being rolled out to Britain’s biggest fleet operators. About 50 companies managing more 1.3 million vehicles, including Britain’s largest fleet, Motability Operations which runs around 450,000 vehicles, and the country’s largest contract hire business, Lex which has a fleet of almost 270,000 vehicles, will benefit from the technology. For the past decade Kwik-Fit Fleet’s tyre management programme has been utilised by some of Britain’s biggest outright purchase fleets and leasing companies to control their tyre maintenance spend. Details of all transactions are logged and information on tread depths of tyres removed, brands and size of tyres fitted, mileage of vehicle at time of replacement and the reason for tyre replacement are all captured by Kwik Fit on behalf of customers.
Continue ReadingNTDA Names 2007 TAFF Award Winners
On Wednesday 2, alongside the Brityrex International exhibition, the NTDA named the 2007 TAFF award winners. Michelin took best single company result of the night, winning two awards. But Bridgestone, Vellco, Apaseal and Group Tyre were also celebrating success in categories including production innovation, wholesaler of the year and tyre and aftermarket equipment supplier of the year. The awards were presented during a glittering ceremony at Manchester’s Palace Hotel, which featured well-known stand-up comic Stan Boardman. The Tyre and Fast Fit (TAFF) Awards, which are sponsored by Renault UK, are the NTDA’s own awards which were established in 2005 to reward excellence from industry suppliers and, in that short time, they have firmly established themselves as the premier awards for the UK Tyre Industry. The 2007 TAFF awards included categories for Tyre Manufacturer, National Wholesaler, Tyre and Aftermarket Equipment Supplier, Product Innovation and a special award for Industry Advertising Campaigns. A special category covering scrap tyre disposal, collecting and recycling is entitled the Environmental Award.
Continue ReadingNew Tyre Safety Organisation for Northern Ireland
Key retailers attending a regional meeting of the NTDA earlier this month agreed to set up a new tyre safety group for the province under the guidance of retiring NTDA regional chairman Roy Nutt who will be driving forward proposals for a major tyre safety initiative in the province later this year. Entitled the Northern Ireland Tyre Safety Association (NITSA) the group will be formally created at a special open meeting to be held next month in Templepatrick where proposals a for a tyre safety week will be discussed.
Continue ReadingNew Appointments at Blackcircles.com Support Rapid Expansion
Innovative tyre retailer Blackcircles.com has announced two new additions to its executive team as it prepares for another year of exciting growth. Launched in 2001 by managing director Mike Welch (28), the online tyre retailer has set a new quality standard for the tyre industry and strong sales in 2006 has seen it create the two new posts of commercial director and head of finance.
Continue ReadingCouncil Gets Tough on Dumper
A habitual fly-tipper has been taught a lesson he is unlikely to forget in a hurry after officials seized a Mitsubishi 4x4 he had used during his illicit operations and put it through a crusher. Council bosses in Wigan approved this drastic measure against the trader suspected of dumping car tyres in a number of locations around the Wigan area.
Continue ReadingAshley Croft To Leave Micheldever
Ashley Croft, Warehousing, Logistics and Wholesale Sales Director of Micheldever Tyre Services, has resigned from the company. Ashley Croft was one of the original six members of management involved in the Buy Out of the company in February 2006.
Continue ReadingTyres of Tomorrow
We all know that the number of fitments on the market is increasing, but what will tyres - and therefore the tyre market of the future - look like? In a recent media briefing Continental market analyst Eulogio Sanz and product manager Peter Robb predicted that the 28 million-unit strong UK passenger car tyre market will split between those wanting economic and environmental performance and those who just want to go faster.
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