News articles on the tyre retail business
Dick Johnson, chief executive of Goodyear Dunlop, has been confirmed as the guest speaker at the NTDA’s Tyre Wholesalers annual lunch in November.
The annual meeting will again be held at the Raven Hotel in Droitwich on 23rd November. It will be attended by over 100 members of the Wholesalers Group, tyre manufacturers, retail chain management and the officers of the NTDA.
(Akron/Tire Review) While rescue efforts continue in the aftermath of Hurricane Katrina, which slammed into the US’s Gulf Coast near New Orleans and Biloxi, Missouri, Monday, government officials and business analysts are trying to piece together the impact that devastating storm will have on American industry and the global market – particularly oil prices.
According to Group Tyre, Maxxis is fast becoming one of the most highly regarded ‘premium budget’ brands in the UK. Chairman, John Church, commented on the development: “In the last two years, we have invested major resources in developing the Maxxis brand in the passenger car, 4 X 4 and light truck sectors, promoting its quality and value-per-mile attributes, which have clearly resonated with trade and retail customers alike. These initiatives have assisted in creating a firm foundation of distribution outlets, for the brand in the UK, and we can confirm that the initiatives will continue, as we look forward to further developing the Maxxis brand.”
ECI International has announced that it will run an exhibition in Southern Africa. Tyrexpo Africa 2006 will take place from 12 to 14 September at the Sandton Convention Centre in Johannesburg.
South Africa represents the biggest domestic market for vehicles in Africa, accounting for some 80 per cent of the continent’s production and constituting approximately 50 per cent of Africa’s purchasing power. It has the largest economy in Africa and has by far the largest and most dynamic automotive manufacturing, retail and aftermarket business environment on the African continent. South Africa’s population of 45 million and a growing tourism industry still represent the continent’s best growth prospects for increasing vehicle sales and aftermarket revenues.
Currently all the major OEM’s in the world are represented in South Africa with seven plants producing 13 brands. There are over 20,000 enterprises active in selling and providing aftermarket support for South Africa’s seven million passenger and commercial vehicles. The distribution of the national vehicle population is mirrored in the location of
Approximately 5,500 garages and filling stations with their associated workshops, 3,300 specialist repairers, 1,100 new car dealerships, 850 used car dealerships, 450 specialist tyre dealers and retreaders, 650 parts dealers and about 280 farm vehicle and equipment suppliers.
Tyrexpo Africa 2006 will be the only independent tyre trade event focusing on every aspect of the tyre industry. If you are a manufacturer or supplier of tyres, tyre equipment or fast-fit equipment, the show will deliver buyers and decision makers across the entire spectrum of the industry. Whether you are targeting retailers, wholesalers, end-users, tyre disposal firms, fast-fit outlets or the accessory trade, your future customers will be at Tyrexpo Africa 2006.
As a relatively new market segment the ATV tyre sector is hard to define in terms of numbers. It is estimated that the UK ATV tyre replacement market lies between 40 to 60,000 tyres, but it’s difficult to qualify specific numbers when so few companies compile statistics. Despite this lack of information everyone involved in this area will tell you that ATV tyres, in particular the recreational types, are increasing and there is potential for much growth. Further opportunities within the segment are beginning to show themselves, giving wholesalers and retailers the chance to broaden their portfolios, but there are no realistic forecasts as to their expected success. Tyres & Accessories asks UK dealers whether the ATV tyre sector has the scope – volume and longevity – to become more than just another niche?
UK wholesaler, R H Claydon has, like every other ATV specialist, noticed an increase in sales of competition ATV tyres and believes that their volume will increase in the next two to three years. However, currently the utility side provides it with its volume sales, and the company expects this to remain the case, terming it a “drip feed” segment. According to the company’s corporate business manager, Dick Anderson, R H Claydon’s existing sales are split 90:10 (utility: recreational), but he expects this to shift in the future. Whether sales of recreational ATV tyres will ever equal that of utility the manager could not estimate, but he does believe that due to the sector’s following it will continue to grow for years to come.
Mr Anderson maintains that both the volume and longevity of the recreational ATV market are certain, but what about profit? R H Claydon broke into the ATV sports sector last year and has been joined by considerably more competitors since. The recreational ATV tyre side has, until now, been dominated by a small quantity of companies but the numbers are beginning to grow. “It’s a niche market,” claims the business manager, continuing: “however the profitability has been eroded to some degree over the last few years due to the increasing number of companies present in the market.”
David Williams, ATV department manager, Fieldens, agrees that there has been a significant increase in those involved in ATV tyres. “There was a time when only ATV centres dealt with the tyres however this has changed. Now there are many more companies offering the tyres, even retail chains, and if they don’t stock the tyre they will generally offer to find it for a customer anyway.” Both managers commented that the increasing number of ATV tyre brands on the market (especially those from China) has also had an affect on profitability. Dick Anderson added: “Margins on ATV tyres are acceptable, but have decreased as the tyre’s worth has gone down.”
If the individual profit of an ATV tyre has decreased then it is obviously important that overall volume does the opposite, and that new opportunities to make money present themselves to the wholesalers and retailers involved. According to Quad magazine’s Dave Bradford quadricycles have become a “sales sensation” in Europe and are becoming a more frequent sight on UK roads. This craze has therefore increased the need for street legal tyres; e-marked ATV rubber that offers a performance similar to a passenger car tyre. Maxxis UK estimates that currently 15 per cent of ATV tyres are used on road with the remainder used in off-road conditions. MD Derek McMartin also explained that street legal tyres have become a massive opportunity in America for the company and he expects the same to happen in Europe.
Because ATV tyres have changed in terms of usage over the last five years, the technology behind them has also had to change. ATVs initially raced on turf tyres until they became so popular that ATV racing rubber was developed. As well as that run-flats have been created for the utility sector, so both wholesalers and retailers are expecting big things when it comes to future street legal tyre development.
As far as the ATV specialists are concerned there are plenty of emerging opportunities within the segment for them to get their teeth into. But what they don’t want is every other retailer and wholesaler in the market to take a bite of the cake also! As far as the existing ATV tyre companies are concerned it is a specialist market and an area for the specialist dealer only.
“It’s very much a regionally specific market, and that makes it ideally a market for specialist farm dealers, or on the sporting side specialist ATV dealers,” maintains Mr Anderson. An ATV tyre sales person needs a “sound” understanding of the market to ensure they fulfil the needs of customer, agree both R H Claydon and Fieldens, inferring that it is not an area that simply any retailer can operate in.
According to Mr Anderson, forecasting an ATV tyre stock profile also complicates matters. “With ATV tyres you have to be able to offer a full range because demand can be very varied. It’s difficult to assess the stock profile because there may be eight or nine popular sizes in the utility segment and six in racing, but each range has its own popular fitments, and you want to be able to offer them all. We (R H Claydon) bring in our ATV tyres by container so we can offer a full range, even of the less common sizes, but not every company is in a position to do that. So it’s not an area that every wholesaler and retailer could get into.”
As both the ATV utility and recreation markets develop new branches the market certainly seems to have the capacity to sustain the expected future growth. But whether these new opportunities mature into long-term profits is difficult to estimate at such an early stage. The wholesalers and retailers certainly have faith in the niche’s permanence and future volumes, just as long as it remains that, a niche.
Kwik-Fit has shocked UK tyre industry members by withdrawing its support from the Tyre Industry Council. An associate member for the past 12 years, the retail chain has announced that it will not renew its membership.
The company is keeping its reasons behind the decision within its four walls, but has issued the following statement: “We are supportive of the TIC’s aims and ambitions. After a number of years working with the TIC and with the many new challenges facing our industry, it is now time to change the way we provide our support, promote tyre safety awareness and raise the standards of service to the benefit of all motorists.”
Goodyear has teamed up with a number of motoring organisations to launch its ‘Drive Home Safely’ initiative. Together the group has arranged a dedicated website and road show to reduce motorists’ fears of coping with difficult driving situations.
Situations such as being followed, breaking down on the motorway alone at night, or having items stolen from their car are those being addressed by the campaign. In London during the first six months of 2005, there were almost 1,000 reported incidents of theft from, or damage to, vehicles according to the Metropolitan Police Service crime statistics.
The manufacturer intends the official website, www.drivehomesafely.co.uk, to act as a one-stop source of information for anyone affected by road security issues.
N.D.I. Tyre & Tube supplies Ltd of Coseley, West Midlands, has appointed Richard Jackson as Sales Manager. Richard has responsibility for promoting the company’s wide portfolio of products and to increase the client base. He brings with him over 20 years of experience in the Retail and Truck sectors and his appointment strengthens the N.D.I. team for the next stage of its expansion program.
Bridgestone Americas Holding (BSAH/Nashville), subsidiary of Bridgestone Corporation, announced its financial results for the six month period ending June 30, 2005. At BSAH, first half sales increased 13% over the previous year, to $4.89 billion. Operating income improved over the prior year to $185 million (from $159 million in the first half of 2004, a 16% increase). The improvement in operating income was due to enhanced tyre product and brand mix and increased efficiencies which helped offset unprecedented increases in raw material costs. Net income also rose in the first half of 2005 by 35%, to $138 million from $102 million in the first half of 2004. BSAH benefited from strong growth in its Latin American Operations and in BFS Diversified Products, LLC. BFS Retail & Commercial Operations, LLC also exhibited growth in the first half of 2005.
General Motors, Ford and Chrysler have posted double-digit US sales gains for July. Toyota and Nissan North America also posted their best sales month in the United States.
DaimlerChrysler, including Mercedes-Benz, sold 260,945 units in July, a boost of 25.1 per cent for the month. Year-to-date, the car manufacturer has sold 1,547,536 vehicles, up 6.9 per cent from the same period in 2004.
GM’s July sales rose 15.2 per cent, boosted by the GM Employee Discount for Everyone incentive programme said the company. Its US sales totaled 524,218 vehicles in July compared with 454,963 in July last year. GM has sold 2,844,839 vehicles to date, a 4.3 per cent increase from the same time last year.
Paul Ballew, GM’s chief sales analyst, said 71 per cent of retail sales in July came from trucks, and he predicted that the company would achieve a market share of 27 per cent for the year.
Since John McNaught took over at Bridgestone UK there have been a number of changes including some high profile acquisitions in the commercial vehicle sector. But in general the developments of the last few years can be summed up in one word, growth.
It has been a “phenomenally busy period,” John McNaught told Tyres & Accessories at the company’s Warwick, headquarters. “Bridgestone is in a very high period of growth and for all our staff it is a tremendously busy and rewarding time,” said Mr McNaught explaining that this is part of a long-term plan developed in conjunction with the company’s European management based in Brussels. John McNaught praised the efforts of all his team and highlighted the fact that the company has been awarded the prestigious Investors in People award.
In tyre circles the Kleber brand is a well-known name. And in mature European markets like France and Germany, the tyre is likely to be amongst the top ten brands that dealers call on. But what about the UK and the unique challenges that this market presents? With a new product set to be released in the early part of 2006, Tyres & Accessories took the opportunity to catch up with Kleber’s UK brand manager, Dominic Clark.
The Tyre Industry Council is to endorse tyre safety related products and services. The first such endorsement is an aftermarket product, allowing the motorist to monitor the pressure in his spare tyre and inflate it easily, if required.
Chris Kisby joins Hi-Q, the Goodyear Dunlop retail network, from his position as key account director within the company’s consumer business unit, where he has worked for three years. During this time, Mr Kisby focused on key accounts such as Kwik Fit Europe, ATS and Hi-Q Retail.
Euro Car Parts has been appointed as the UK’s largest distributor of Contitech drive belts. The deal ensures that Euro Car Parts, the UK’s largest independent supplier of car parts, can meet the highest volume demands from trade and retail customers 30 branches nationwide. Contitech is an original equipment manufacturer on some of the world’s leading car marques including BMW, Mercedes, Porsche, Volvo, Seat and Audi.
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