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Tyre Distribution At Car Dealers and Workshops

No doubt about it: distribution of passenger car and truck tyres is undergoing a dramatic change in Germany. With the (re)-organised workshops and fast fitters a lot of new distributors of passenger car tyres have entered the market in recent years, attacking the monopoly of the professional tyre retailers, which had been successfully preserved over the past decades. In addition, the tyre distribution channel of car dealers has grown continuously over the last few years. Approximately every third car tyre is sold through this kind of distributor nowadays. The speed of this process will increase because all leading car manufacturers have developed programmes to accompany the customers with a lifelong full-service, which includes tyres and wheels. How threatening is all this for tyre retailers? It would be possible to have a nice discussion about these trends but we wanted to take a look on the concrete, everyday tyre business situation at car dealers and car repair workshops. For this we visited a total of ten companies in Hamburg. Who is selling tyres? Under which conditions are they sold? What about the competence and motivation of the employees? Do they give advice to customers? If so, how good is this advice? Where are tyres neglected as a product? How professional is the marketing? Which companies could be regarded as serious competitors to tyre retailers? The variation in the results of this report could hardly have been wider! In general the trend is that most of the car dealers and workshop stations are miles away from a professional tyre marketing operation. There is always a big difference between the stated goals and the actual achievement in real life. In the end the conclusion is that, on the one hand the importance of these new distribution channels should not be underestimated, but on the other hand, their professional performance should not be overestimated by tyre retailers.

30th November 2001/by Tyrepress Editors

Wheel Market UK

The alloy wheel market in the UK is nothing like the size of , say, that in Germany, and reliable estimates of its size are hard to come by, although one educated guess is £500 m at wholesale prices. Reasons for the comparatively small market are manifold, varying from the way cars are sold in the UK to the effect of the large company car/fleet sector, which accounts for over half of new car sales. Fleet buyers do not welcome anything which increases costs, and alloy wheels fall into this category. Despite this drawback, the UK alloy wheel market is growing, due largely to increasing fitment in the OE sector. In the aftermarket, it is those who have disposable income to spend and who are fashion conscious that buy alloys and, as with most other fashion accessories, this means the young. As with other fashions, there are labels which are “in” and others which lack street cred and, again as with other fashions, the successful designs spawn many imitations. So, in order to stay ahead of the pack, the leading design labels have to introduce new designs – to reinvent the wheel.

30th November 2001/by Tyrepress Editors

Highest Prices For Passenger Cars In Germany

The latest comparative study of the European Commission regarding car prices, shows that 46 of a total of 81 passenger car models cost over 20 percent more in Germany than in at least one of the other Euro-zone markets. Companies such as PSA, Fiat, VW, Ford, Opel and some Japanese manufacturers follow a high-price strategy in Germany. The cheapest prices for new cars to be found in the Netherlands, Finland, Spain and Denmark, which does not even belong to the Euro zone.

30th November 2001/by Tyrepress Editors

Re-organisation For Goodyear Dunlop Europe

Goodyear Dunlop Tires Europe has announced the appointment of three managing directors for France, Germany and the UK. Sylvain Valensi will head up France, Gerd Grünenwald takes control in Germany and Marco Molinari returns to the UK for his second stint as MD. Goodyear GB’s current MD – Steve MacDonald – will retire after 27 years with the company.

30th November 2001/by Tyrepress Editors

New Communications General Manager At Continental

Dr. Heimo Prokop (43), director of communication at VAW Aluminium AG (Bonn/Germany), is to become the new director of communication of the Continental Group, Hannover, beginning the new job on 1st April at the latest. He succeeds Peter Schwerdtmann, who has already left the tyre manufacturer. Prokop’s main task will be the internationalisation and intensification of the communication activities of the Continental Group, underlining that it has changed from a pure tyre producer to a company that also offers chassis management solutions.

30th November 2001/by Tyrepress Editors

Ringtread Marketing Begins Successfully For Ellerbrock

A short time ago there was just one production facility for Ringtread products in the whole of Europe: at Marangoni in Frosinone (Italy) which is the patent holder for this product that has already been described several times in NEUE REIFENZEITUNG. Marangoni’s German subsidiary Ellerbrock has invested millions of Deutsche Marks in its plant located in the north of Hamburg in order to be able to produce the tread rings for itself. In addition Ellerbrock has assumed the distribution rights from Marangoni for the Ringtread products, covering the German speaking countries and Denmark. By the end of this year Ellerbrock (turnover 2000: > 60 million DM, 125 employees) wants to achieve complete coverage for these products within Germany. Up until now three retreaders have been working with this technology. The company has completed successful negotiations with a couple of other companies, as was underlined by Clemens Zimmermann, Director of Organisation and Systems at Ellerbrock. One of these companies is “Reifen Ihle”; one of the largest retreaders in Germany. There will be no cannibalisation effects on the other product lines. Ringtread will be offered in addition to the conventional product range, consisting of “Kontur” and “PRL” treads. The marketing strategy is a two-dimensional one: on the one hand Ellerbrock goes with the Ringtread retreader to the customer, the end user, in order to convince him of the advantages of this technology. On the other hand Ellerbrock searches for new customer groups which have until now exclusively used new truck tyres and not considered retreads. Zimmermann is convinced that the positioning of the products following the slogan “Next to the New” will be a helpful argument in this context.

30th November 2001/by Tyrepress Editors

Synthesis between Tradition and Modernity – Pirelli’s P6 and P7

Pirelli launches with the P6 and P7 world wide two new tyres in the high performance segment, utilising the most advanced materials and technology. Designed to equip a wide range of cars, from high class saloons to the latest generation sports cars as well as MPVs, Pirelli P6 and P7 are available in a total of 40 sizes from 185/65 R 14 to 225/45 R 17 covering 70 percent of the European car market. Produced in Pirelli’s factories in Italy, Spain, UK and Germany, using the most sophisticated process and control technology currently available to the tyre industry, P6 and P7 are to be widely distributed an will go on sale immediately in southern European markets. They will be sold throughout Europe and in Japan by the end of may. Sales are expected to reach 1.5 million units by the end of 2001 and stabilise at a regular of 10 million tyres a year. P6 and P7 will be sold five percents more expensive than their predecessor, the P6000 family. A large proportion of P6/P7 will be assigned to Original Equipment sales, underlining how closely the tyres’ development has been integrated with that of the car manufacturers. The new products have already been approved or are in the process of approval for key models of Audi, BMW, Mercedes-Benz, Volvo, Fiat, Jaguar, Peugeot and Ford. The internet addresses, www.pirellip6.com and www.pirellip7.com, are for the first time part of the respective sidewall inscriptions. The web sites provide on-line information about the new tyres as well as a dealer locator.

30th November 2001/by Tyrepress Editors

Better In Business With Michelin – New Program In Germany

In Germany, Michelin is offering, what it calls “target-dealers” a contract with a Bib-Program, meaning Better In Business. Michelin has developed a multi-brand strategy with its Michelin, Kleber and BFGoodrich brands and is offering important extras to the dealers who have to agree to give the group brands a certain portion ( the majority) of their total purchasing. As our sister magazine, NEUE REIFENZEITUNG, says: The multi-brand-strategy has arrived in Germany.

30th November 2001/by Tyrepress Editors

Car Servicing As An Opportunity For Tyre Retailers

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.

30th November 2001/by Tyrepress Editors

Alliance For The Development Of Tyre Pressure Monitoring Systems

Lear Corporation (Southfield, Michigan/USA) and Beru (Ludwigsburg/Germany) have signed a Memorandum of Understanding to jointly design and develop Tyre Pressure Monitoring systems for the global automotive market. Under this strategic partnership, the two companies will develop Tyre Pressure Monitoring Systems that will relay information to drivers through the electronic architecture used for the Remote Keyless Entry System. The joint venture will combine Lear’s capabilities as the North American leader in Remote Keyless Entry Systems with that of Beru, the market leader in Tyre Pressure Monitoring Systems in Europe.

30th November 2001/by Tyrepress Editors

“Oxxynova” For Car Tyres

On January 1, 2001, Degussa-Hüls transferred its DMT (dimethyl terephthalate) business to a separate legal entity. The new company, Oxxynova, will initially operate as a marketing operation. Production of DMT, including two production facilities, employing 250, will be transferred to Oxxynova GmbH & Co KG (Marl, Germany) on April 1. DMT is a base product used in the manufacture of polyester. DMT based polyester uses include, for example, the reinforcement of car tyres. Oxxynova is the European market leader with total production capacity of 480,000 tons.

30th November 2001/by Tyrepress Editors

Web-Based Ordering System From Michelin And IBM

Michelin and IBM have announced that the tyre manufacturer has installed for all Europe a new Web-based system – based on a Web-enabled IBM eServer zSeries mainframe – that improves service to its network of 50,000 European distributors by allowing them to place orders for Michelin products directly over the Web any time of the day or night. The system is initially being deployed for use by Michelin’s large European distributors in the United Kingdom, Germany and France and will be made available to the most of the company’s European network tyre distributors. Full deployment will be by 2004.

30th November 2001/by Tyrepress Editors

Start Of The Motorbike Season

Each year the motorcycle exhibition in Dortmund attracts many visitors, even though Munich has established a bigger show (every other year) for two-wheel fans in the meantime. More than 400 exhibitors took part in the 17th show from 28 February to 4 March and around 1,000 motorbikes could be seen in Dortmund. And on the tyre side? Only Dunlop presented a new tyre: the tyre manufacturer says that the D208 GP (front tyre 120/70 ZR 17, rear tyre 180/55 ZR 17) was developed based on experiences in motorsport. But apart from this, no more information was available. Dunlop couldn’t even tell NEUE REIFENZEITUNG a date for the official launch of the new product in Germany. And at all other tyre manufacturers‘ stands – Bridgestone, Cooper-Avon, Metzeler/Pirelli, Michelin – one could only see exactly the same product range as presented at Intermot last autumn – very disappointing so far. The only excitement for this year’s motorbike season will arise from the question if Bridgestone will be able to pass Metzeler and can climb to number one of the German market for motorbike tyres.

30th November 2001/by Tyrepress Editors

Despite Increase In Turnover, Vredestein In The Red For H1 2001

The Dutch group achieved a slight increase in turnover but reported a loss of 2.9 million Euro compared with a loss of 1.9 million Euro, in the 1st half of last year. As far as the tyre manufacturing in Enschede is concerned, figures remained more or less unchanged. Vredestein is depending very much on the winter-tyre-season in Germany as well as in Switzerland and Austria.

30th November 2001/by Tyrepress Editors

Multi-Brand Sales Organisation Of The Continental Group In Germany

From the beginning of the year, only one sales rep in each region will be selling all Continental group brands. The company believes that the benefit will be greater synergies for itself and for dealers; so said Jescow von Puttkamer, head of sales for passenger car replacement tyres in Germany, Austria and Switzerland, in an interview with Neue Reifenzeitung. In Germany, the group has 60 sales reps on the road, selling passenger car tyres. Whether “one rep for all brands” is the correct decision or not, only time will tell. We remain pessimistic.

30th November 2001/by Tyrepress Editors