STS Tyres & Exhausts has appointed a completely new management team at its Aylesbury branch. Francis Johnson and Paul Piggott, who have worked together in the sector for 12 years have joined the centre as manager and deputy manager respectively.
Winter tyres and the UK market are a standing joke. Nobody buys winter tyres in the UK. At least that is the perception. However, when we talk to people in the tyre trade, be they retailers, wholesalers or manufacturers they all understand that winter tyres are not just about driving on snow or ice for the three days a year when our roads are clogged with the white stuff. They are largely aware that winter tyres are about dealing with temperature conditions that adversely affect the performance of summer tyres. That below seven degrees Celcius the winter tyre starts to outperform the summer tyre in terms of safety. Yet, the general response on winter tyres is that nobody wants them in the UK.
Why might that be? Could it be that three days of snow on the roads each year doesn’t warrant the expenditure? Could it be that the tyres are being marketed in completely the wrong way? Could it simply be that people, in general, hate spending money on their car? Could it possibly be that the tyre retailers simply don’t like having to work to sell product? Think how difficult many find it to sell pairs of shock absorbers, or indeed anything but the basic tyres and exhausts.
So, why do we need winter tyres in the first place? In layman’s terms a summer tyre is manufactured with the function of keeping the tyre in contact with the road surface in both wet and dry conditions. It’s compound has a designed in level of adhesion. Its chemical make up creates an interaction between the tyre and the roadway. However, the compound utilises an oil in the mixing process that allows the various components in the compound to blend and mix and work together as one. This polymeric oil can, and does migrate in time leading to the deterioration of the tyre. In practice it migrates inwards in cold climates towards the lining of the tyre. Thus degrading the tyre tread, hardening it and making it less effective in its interaction with the road surface. The point at which it does this is around seven to eight degrees Celcius. So, the efficiency of summer tyres in the wet or dry in winter is diminished. Even without snow and ice, a winter tyre becomes a safer option in colder weather.
STS Stapletons Tyres and Exhausts has joined Fit4Fleet, giving the company access to a national account facility. This is a boost to Fit4Fleet and perhaps gives an insight into the relationship between AA Tyrefit and Stapletons, founders of Tyreserve, which later became AA Tyrefit. The move puts Stapletons back in the running in terms of serving the fleet customers and also serves to boost Fit4Fleet, bringing their membership to 850 operational centres and some 350 mobiles. Fit4Fleet’s Dominic Bateson told T&A, “We are delighted to have Stapletons on board. The company has excellent coverage backed by excellent brand availability through its wholesale operation. Stapleton’s is also very experienced in fleet work and understands the demanding nature of the clients and has suitably strong operational controls. These are characteristics that are very important when dealing with the fleet customers.” This move is explained by strategic developments at AA Tyrefit, formerly the Stapletons’ originated Tyreserve. Says David Goodyear of AA Tyrefit, “The traditional fast-fit centre is a thing of the past and tyre networks that maintain them simply do not have the right structure to survive in the future. We aim to offer the flexibility, pricing and service that the tyre customer rightly expects.” Goodyear cites research by AA Tyrefit that suggests just four per cent of customers using a mobile service would return to a fast fit outlet. ”The service advantage is so strong,” argues Goodyear, “that the biggest hurdle we face is the fact that people expect there to be a premium for mobile fitting. There isn’t. Our mobile fitting is free.” Such is the confidence in building the mobile service that AA Tyrefit has eschewed the independent networks completely. David Goodyear explains, “We can provide the entire service capacity we need from within our mobile resources. The need for the independent network has passed, although we are still maintaining relationships with those outlets that offer mobile tyre fitting to provide back-up to our own units.” In further moves to hit its target of becoming the largest tyre distributor in the UK by 2007 (David Goodyear, T&A April 2003 p 37) the company has further developed its mobile fleet, which has now reached a total of 70 mobiles with a further 200 to be commissioned by the year-end, rising to 500 units by 2005.
STS Stapleton’s Tyres and Exhausts has joined Fit4Fleet giving the company access to a national account facility. Alan Denton, STS’ retail manager is pleased that the company has become a member of Fit4Fleet. “The partnership is quite natural as our philosophy to customer service mirrored their own.” Said Mr. Denton.
Exhausts are big business for fast-fits, but like tyres, the market is suffering from a proliferation of part numbers. T&A talks to a full line manufacturer, a short range manufacturer and a regional exhaust distributor to try and find out what is happening in the exhaust sector in the UK.
ArvinMeritor has agreed to buy the remaining 51 per cent that it does not already own of German joint venture Zeuna Stärker GmbH. The price will be around $75 million and the deal will be concluded in the second half of next year. Zeuna Stärker specialises in exhausts and emissions technology; ArvinMeritor acquired 49 per cent of the venture in 1998.
For every business there are items that you can hold in stock and you can sell them at any time. Tyres, wheels, exhausts, batteries, all can be sold off the shelf. If you don’t sell them today you can sell them tomorrow. For some businesses their stock in trade is time. The hotel trade doesn’t sell rooms, it sells time. The rooms will always be there, but they are each allocated time which they sell. The problem with selling time is that you can only sell it once. The fast fit operator – indeed any garage operator – has the same difficulty which we call ramp time. Fast fits may not actually sell the ramp time, but every minute the ramps are not occupied by vehicles undergoing profitable work the option to sell work on that ramp is vanishing down the plughole of time. Most service managers recognise this and try to minimise the time vehicles spend on the ramps. Buyers will ensure that the exhausts they buy have a problem-free fitting procedure. In the efficient garage, time management is everything. However, even with the best time management of jobs there is, for many depots, the point where the work being done fails to fill all the available time. There can be three outcomes to this. The first, and most likely, is that the time allocated to the job is stretched to fill the time available. We all recognise the scenario – we take our car to the garage for a repair – the garage is devoid of customers, four mechanics sit reading the newspaper – it takes all day to do the job. On another day we arrive and the cars are lined up outside the doors. The same job is done in an hour. The second outcome is that the jobs are carried out as efficiently as possible and the ramps lie ready for their next customer. This may well be a better practice than the first, but it doesn’t sell the time when the ramps are not in use. The third option is to find another profit centre which will see the ramps in use. Since we are in the wheel and tyre business there is a tendency to keep the business revolving around the four corners of the car – brakes and shock absorbers are the most popular additional parts’ areas for fast fits. Skill levels required are relatively low, so labour costs remain low. The parts are often, though not always, fast fit. Pull off the old and fit the new. Some have dabbled in so-called fast fit clutch operations – but fast fit is all relative. If someone drives in with a Ford Mondeo or a Transit and asks for a fast fit clutch they may think your fast fit description is stretching the realms of credibility. Further, your mechanic’s time with the vehicle on the ramps – possibly special ramps – ties that bay up and, again, you can only sell your time once. There are, of course, other options; basic servicing is only a short step from fast fit work, though your reputation depends upon the skills of your mechanics. Can you afford to pay a mechanic rate to someone who may spend most of his time as a tyre fitter? MoT bays are yet another option. Both MoT bays and service operations can be used to open doors to enhanced tyre, exhaust, and accessory sales. However, there is one profit centre which may well be worth considering as a development to ensure those ramps are never left empty. As one commentator told T&A, “without diagnostics all the service garages are going to be left with are tyres and exhausts.” That statement should send shivers down the spine of every fast fit operator in the country. If the service garages are being forced to move into tyres and exhausts in a big way in order to retain their revenue, that must ultimately have a detrimental effect on the wellbeing of the fast fit depot – dragging revenues down.
The disastrous sales of winter tyres in Germany at the end of last year have shown at least one thing: hope has no place in the calculations of business administration, and whoever has not yet understood that will have no future in this business. All the hand wringing of the tyre retailers does not help in this situation. Considering declining gross yields and the many new distribution channels for tyres, tyre retailers are forced to diversify and widen their service offers in order to compensate for loss of profit. One example of how this can be achieved is car servicing, which brings in gross yields between 40 and 50 per cent on average. A lot of business members have long ago realised this fact and extended their range of service offers. So car servicing is no longer a question of “if” but of “how”. The differences between the service offers and the quality of tyre retailers engaged in car servicing are huge. They range from the traditional Fast-Fit-Sector, covering the classical elements (exhausts, brakes and shock absorbers) to the fully equipped and professional working car repair station, offering every kind of car servicing. In this issue of NEUE REIFENZEITUNG the present level of involvement of German tyre retailers in the car servicing business will be explained and described, including some examples.
Aftermarket wholesaler SDL, which went into Receivership when parent company Finelist collapsed recently, has been purchased by Belgian exhaust manufacturer, Bosal Group. SDL was one of the biggest customers of Bosal UK and the acquisition ensures continuity of supply of Bosal exhausts, catalytic converters and other accessories to the UK aftermarket. No details about the terms of the deal was revealed.
Pit Stop, the fast-fit group belonging to Kwik-Fit (and thus, ultimately, Ford) is pushing ahead with plans to open up to 400 centres in Germany within the next two years. Pit Stop focuses on exhausts, brakes, shock absorbers, etc., as well as selling tyres.
Bosal has been named as a General Motors “Supplier of the Year” for its superior performance in quality, service, technology and price. 165 suppliers from 19 countries were named in total, and this is the fifth time that Bosal has won the award. The company supplies exhausts for a number of GM vehicles.
In the 80s and 90s a lot of tyre dealers invested in auto service knowing that there were limits: without employing a master mechanic for car repairs, certain works are not allowed to be carried out. But many dealers cared for the qualifications of their employees, sent them on courses in order to get the permission to do the typical works that car service stations normally do. Some tyre dealers were on their way to making a success of auto servicing. But there are also examples of diversification going in the wrong direction. Some fields were portrayed to tyre dealers as being the business of the future but which failed later: Steering wheels? The airbag killed this business. Batteries? Today most are maintenance-free. Exhausts? Better quality steel has led to better rust-proofing. Numbers of car services will decrease over the next few years, meaning that tyre dealers, independent car repair stations and licensed car dealers will have to fight much harder for the customer than they do today. Generalists, who attempt to do all the work around the car, will have to invest a lot of money in their outlets. Specialists – for example in tyres – can recommend themselves to the customers with their special services and products whereas car service stations might be overstretched regarding an increasingly complicated tyre business because of the progress in electronics, such as tyre pressure warning system. Easy solutions are not available. But it is dangerous to follow each trend of diversification, to invest a lot of money merely in order to realise one day that you have built up a new service in a specific auto part, only for the demand to wane and another part comes into focus. However, in twenty years’ time cars will still need tyres, and who will replace the defective tyres if not a tyre dealer?
Tenneco Automotive is spending one million Pounds (1.6 m Euro) on a refurbishment programme at its Walker exhaust manufacturing factory at Tyseley, Birmingham in the UK. The investment will improve flexibility and reduce downtime between manufacturing different products. The factory produces two million exhausts a year.
Authorised VW dealers will integrate a fast fit service in Germany under the name “Car Center” by the end of 2001 open to all car brands. Besides brakes, exhausts and shock absorbers the offer will also include accessories like alloy wheels.
Tenneco Automotive Europe has appointed Richard Sloan as Vice-President of the company. He is responsible for the two Tenneco brands Monroe (shock absorbers) and Walker (exhausts).
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