Following the negative Which? report on UK fast-fits, including Kwik-Fit among others, there is better news for the company from other magazines. A survey carried out by the publications Top Fleet, Fleet Management and Business Car voted Kwik-Fit “best fast-fit company in the UK” for the eighth year running. The readers of these magazines comprise fleet management companies and people responsible for the maintenance of the majority of UK company cars.
Last year’s miserable winter tyre business has had a marked effect on many market players. Only a small number of dealers in very few regions of Germany could report a normal winter tyre business. In most parts of the country the snow came too late. If it does not snow until the beginning of November it becomes increasingly harder day by day to convince the end users to fit their cars with winter tyres. November is absolutely the most important month for retailer‘s winter tyre business. In late summer and early autumn of 2000 the tyre manufacturers were very happy about their sales to the dealers, which reached record levels. But of course the managers of the tyre industry are not so naive as to regard the lack of sales to the end users later on in the season as a problem only for the dealerships. This problem comes back to the manufacturers in two ways. First of all dealers experienced a lack of financial liquidity and there were problems in paying invoices. Secondly, having tyres in stock affects the willingness to order for next year – in this case 2001 – at the same level as before. Because merely listing the troubles would be pointless and unproductive, we tried another approach: we spoke to a lot of market players in order to form an overview of opinion and compared this with some hard figures.
A report commissioned by the Motorsport Industry Association and researched by various universities and management schools has concluded that the motorsport industry is worth nearly 5 billion Pounds a year to the UK economy. It also earns over 2.2 bn Pounds in export earnings; more than steel and agriculture combined, as well as employing 40,000 people. Three quarters of the world’s single seater racing cars are made in Britain and, in F1, 7 of last year’s 11 teams were based there.
The tragic terrorist attacks against the United States had an effect on the 59th International Automotive Exhibition (IAA), which took place in Frankfurt from 13th to 23rd of September. For a moment it seemed that, as a reaction to the catastrophes in New York and Washington the whole event would have to be cancelled. However, the authorities decided to continue with the show at a subdued level – which meant that exhibitors cancelled their music and showcases, reducing the programme to pure product presentation level. “It was a quiet show,” is how Prof. Dr. Bernd Gottschalk, President of the German Car Manufacturers Association (VDA) summed it up. The official opening ceremony with Chancellor Gerhard Schröder was also cancelled. At noon on Thursday 23rd a five minute silence was held over the whole exhibition area in memory of the victims. The first press day of the IAA was attended by around 10,000 journalists who came to report on the 57 world premieres at the show. The news of the apocalyptic terror attacks spread very quickly amongst press representatives and exhibitors alike. In some areas of the exhibition, for example, hall number 10, which was occupied by the garage equipment suppliers, exhibition activities immediately broke down completely. Groups of visibly shocked people followed the TV transmissions. The shadow of extremist terror had touched even this event.
A report by French air accident investigators reveals that Concorde suffered damaged fuel tanks caused by tyre blowouts on no fewer than six occasions before the fatal crash in Paris last summer. The report also states that, since Concorde began flying in 1976, there have been 57 incidents of tyres bursting on the runway.
The latest report from industry consultants Autopolis makes gloomy reading. The title “A sharp decline to come: the outlook for the global vehicle industry to 2005 and 2010” says it all. It predicts that car and truck sales will drop by 11% from their peak before the end of next year. That is six million units, or the equivalent of the whole Japanese market and the report predicts fundamental changes to come in the world’s auto industry.
Following an old tradition, we take a close look at the alloy wheel business in the March and April issues of NEUE REIFENZEITUNG. The only thing that has changed is the order in which we intend to do this. Usually the first part of the analysis is concerned with the original equipment sector, which is followed by the replacement sector. This year we will look at it the other way round and begin with the aftermarket business in Germany. While the German aftermarket for alloy wheels has been flat for some years – although at a high level – the OE-suppliers have registered a significant growth in their figures. Competitors of the aftermarket sector observe negative trends, pessimistic voices are dominating the discussion. The growth of some happens at the expense of other companies who are not able to face the intensified competition. In the end there will be tremendous competition, fought with price as the weapon; a process which already started some time ago. In the first part of the alloy wheel report, these topics will be discussed, as will be the chances that still exist in this market. In addition, actual trends and developments of the sector will be described.
Three percent of all traffic accidents in Germany occur due to technical defects on the cars, more than half of which are tyre defects; in total round about two percent of all accidents are due to the tyres. This figure seems to be reassuring, but they apply only to accidents caused directly and undoubtedly from the tyres – for example a puncture. The question “what was the reason for the puncture?” – maybe a long-term inner defect – is never asked. In the common statistics no hint is given on the influence of reduced tyre pressure on traffic safety. Nobody can give information about how many accidents happened because of faulty steering or below-standard characteristics in bends or hydroplaning safety. Also accidents involving stationary vehicles parked on the street are not counted in the statistics. Collisions with “objects” on the roads are mentioned, but the objects are not specified. Very often these “objects” are tyres or parts of tyres, which can be a very dangerous obstacle – especially when the objects are truck tyres. For the statistics regarding accidents caused by faulty tyres it is still correct what was mentioned in an analysis in 1985 – and it sounds ironical: one result of the report is that it is not possible to make concrete declarations about the reasons for accidents. All we know is that low pressure in the tyres has an influence on the number of accidents – but nobody can say how much.
A report from automotive intelligence firm Autopolis predicts hard times ahead for the US auto industry, with demand falling by 10 per cent this year and 8.5 percent next. Sales of cars and pickups are forecast to fall until the first half of 2003 at 14.1 million units, down 20 per cent on the 2000 sales figure of 17.6 million units.
In the German tyre retailing business, the mood has swung towards the negative side over the last year. This is the main result of an annual poll carried out by the Marketing + Management-Systeme (MMS) among 2,400 German tyre retailers. According to the MMS-report, 80 percent of tyre retailers have been disappointed in their economic expectations. Among the co-operation members this is even higher at 85 percent. The main reason for the depressed mood has been the disaster of the winter tyre business in 2000 and there is no sign of any compensation in the form of new business activities. For 80 percent of the companies questioned, their central goal is to improve their service quality during this year. One year ago 30 percent of the retailers had stated that their expectations had been more than fulfilled, for 49 percent the expectations had been fulfilled. This time there are just three percent for whom the expectations have been more than fulfilled and another 17 percent who had achieved their aims. The most serious problem is the high quantity of winter tyres in stock. They block the capacities for the coming summer tyre season and cost a lot of time and money. First calculations are that 28 percent of the winter tyres have been not sold, which means a volume of five million units. With an average worth of 85 DM this adds up to an amount of approximately 400 million DM up to 425 million DM.
A report from automotive industry consultant Autopolis suggests that the Asian auto sector is half-way through “a decade of stagnation”. Sales this year will be flat and predictions for next year are for sales outside Japan to fall by 7 per cent and production to drop 8 per cent as exports decline. Chief Economist Graeme Maxton forecasts that it will take until 2005 for the market to return to 1996 levels. He says that there are some bright spots, with opportunities in China and India “but the rest of the region is just vegetating.”
A report in the magazine Which? – published by the UK Consumers Association (CA) – has accused fast-fits of recommending unnecessary work in almost a quarter of cases. The CA took a test car to 93 depots, belonging to seven of the UK’s largest fast-fit chains, and says that 23, split across all seven chains, recommended unnecessary work. In response, one of the companies involved – Kwik-Fit – says that it has not been given detailed information by the CA but, on behalf of all the companies involved, it takes exception to the implication that so many in the trade would intentionally mislead the customer.
The Goodyear Tire & Rubber Company has elected Cathryn M. Fischer, vice president and chief marketing officer. Fischer, 39, will be responsible for the world’s largest tiremaker’s global marketing and brand management efforts. She will report to Robert J. Keegan, president and chief operating officer.
In a report in its magazine Which? the Consumers Association criticises UK fast-fits, accusing them of recommending unnecessary work on customers’ vehicles. What do you think? Is such criticism justified? Is dishonesty rife in the fast-fit trade? Or is Which? overstating the problem? Whatever your connection with the tyre trade, or if you are a customer, we welcome your opinions and ideas. Read our article (PDF file, size: 44.5 kbytes, Adobe Acrobat Reader required) first and e-mail us your comments – this is a matter which has profound implications for the image of fast-fits and this is your chance to have your say.
Goodyear has announced a reshuffle at its European businesses. Sylvain G. Valensi, the outgoing president of the European Union business unit, will be on special assignment, reporting directly to Robert Keegan, Goodyear’s president and COE. Valensi will be replaced by Michael J. Roney, who transfers from the Eastern Europe, Africa and Middle East Business Unit. Roney is in turn replaced by Jarro F. Kaplan, who previously held the post of managing director for Goodyear UK, and latterly of Goodyear Germany. Both Roney and Kaplan will report directly to Robert Keegan.
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