Some local AAA chapters have decided to take on the $130 billion-a-year repair business. Since the first AAA-branded shop opened in Santa Clara, California, in 1999, local American Automobile Association chapters have opened some 20 repair shops under the AAA name. In North Carolina and South Carolina, AAA Carolinas has opened five AAA AutoMark repair shops in Raleigh and the Charlotte area over the last three years – more than any other affiliate in the country.
The industrial tyre sector consists of some very specialised products to suit very specialised vehicles and applications. But it is not all about just supplying products, as the fitting and servicing of industrial tyres is a job for experts, involving considerable investment and commitment. Understandably, the user of industrial equipment wants service immediately – idle machines are losing money – which puts even more pressure on the service provider.
In the United States, Michelin Retread Technologies has won a two-year contract to supply retreads and servicing to the vehicle fleet of utility company Alabama Power Co. The fleet includes around 1,900 passenger and light truck vehicles, 840 heavy trucks, 1,000 trailers and 30 off-road vehicles.
More than half of garages across the UK deliver low standards of service to customers, according to new research published recently. Key car industry figures have met with Consumer Minister Melanie Johnson and Industry Minister Alan Johnson to discuss the problem. The Ministers welcomed a pledge from the industry to sign up in principle to develop a ‘Good Garage’ scheme to tackle the low standards. A recent government-sponsored mystery shopping survey found that 51 per cent of garages missed one or more safety-related defects in cars or items that should have been picked up in a regular servicing. The survey also revealed that, only five per cent of garages sampled carried out a thorough service against the manufacturer’s schedule and were judged to be ‘very good’, · 86 per cent of garages missed at least one introduced fault · 40 per cent of garages missed at least one service item; 51 per cent if the customer was female, 33 per cent if the customer was male; and · 27 per cent of fast fit centres recommended unnecessary replacement of parts.
Government sponsored mystery shopping in the UK revealed that 51 per cent of garages missed one or more safety related defects and that the standards of servicing varied widely and that 86 per cent of garages missed an introduced fault on test vehicles. Some 27 per cent of fast fit centres recommended unnecessary replacement of parts. The government and industry are to work together to promote the “Good garage” scheme to deliver a better deal for consumers.
Cooper Tire & Rubber and Pirelli have announced the restructuring of their three-year-old alliance in the US market. The object is to improve the competitive strength of both companies and both agree that, while the alliance had proved generally positive, a new approach would be beneficial in pursuing separate brand strategies. From July 1st, Pirelli will resume responsibility for sales and customer servicing of the Pirelli brand in the USA, while Cooper will continue to manufacture certain sizes of Pirelli tyres for sale in the US, as well as providing logistics support. The two companies will investigate the feasibility of Pirelli manufacturing selected UHP Cooper tyres in the future. It is intended that the transition regarding existing Pirelli dealers will be smooth, ensuring that customer service is not adversely affected. The changes in the alliance are mutually acceptable and both companies continue to regard themselves as partners in technical and other related matters. D. Richard Stephens, President of Cooper Tire, and Francesco Gori, General Manager, Pirelli Tyre Worldwide, issued a joint statement, as follows: “Our companies have learned to know and appreciate each other since the beginning and are looking forward to a new and different phase of our alliance which will benefit customers for both brands.” Under the terms of the original alliance, signed in February 1999, Cooper managed the sales and distribution of tyres in the replacement markets of the USA, Canada and Mexico. Pirelli developed products for the US market and strengthened brand awareness via participation in motorsports.
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?
The car fleet servicing market in the UK is a very tough business. The size of this segment become evident looking at new car registrations in the UK last year, 57% of more than two millions were fleet vehicles. In absolute figures the German market surpasses the British, but the proportion of fleet cars is less. The potential is enormous: Industry sources say that the average fleet car needs 1.8 tyres replaced a year, which gives a total market of 9 million tyres in Germany. And it should be remembered that fleet cars are normally newer than the average, travel more miles per year and fitment rates of winter tyres are higher than for private cars. A fleet service provider knows how much he has to pay for tyres per mile. It should be routine to ask whether the fleet has the right cars and the most suitable tyres, but could another model of car be more appropriate to the needs of the fleet because of how it is used? Car fleets need a mobile fitting network wherever the cars are driving. The tyre dealer carrying out the service on behalf of a leasing company must know the state of the tyres, has to ensure that they are at the correct pressure, has to identify the reasons for unbalanced abrasion patterns and has to fit the car with winter tyres before the first snowflakes fall. Whoever wants to participate in the growing market segment of car fleets has to be fully professional – and he has to invest money. For example, an integral component of car leasing or full service fleet management systems is the use of the Internet. All those involved in the package use the Internet as a communication platform and they want to reduce the costs for the fleet parc. Customers are very interested in quality; the package they anticipate is more than “only” good tyres. Car fleet servicing might be an opportunity, but not a cheap one.
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.
Tyreserve is a new company aiming to create a big impression in the UK car fleet servicing market, which is reckoned to be worth around 200 million Pounds a year. The company is a wholly-owned subsidiary of national wholesaler Stapleton’s Tyre Services and is being launched at the beginning of April, backed up by an investment by Stapleton’s of two million Pounds. The fleet car market is extremely competitive, with the market leader being Kwik-Fit, followed by ATS Euromaster, FTM Tyrefit and National Tyres & Autocare. These first three have a market share of around 85% and, last year, Kwik-Fit acquired the shares of FTM. FTM is an association of independent retailers, banding together to provide a national fleet service and facilities. Tyreserve is aiming at FTM as its main target – when FTM was acquired by Kwik-Fit, there was some unease expressed by some independents, who wondered how this would affect the status quo. It promises to be an interesting time, with a new player entering the market and, presumably, the existing players determined to defend what they already hold. What makes it more interesting is that the main directors of Tyreserve were all working up until recently for Kwik-Fit Fleet. At least two names will need no introduction to the UK tyre trade – Managing Director David Goodyear and Network Director Charles Hespin.
Siemens Automotive has developed a universal tyre pressure monitoring system suitable for use with all OEM tyre makes and models. The system tracks pressure, temperature and acceleration and can identify tyre location on the vehicle on a near real time basis.
Kwik-Fit Fleet is to launch its mobile tyre fitting service in Ireland, servicing mainly business car users at their offices or homes. Kwik-Fit currently has 37 service points in Ireland, with plans to expand. When it comes to mobile service units, the group has 538 vehicles operating in Europe.
The two cooperatives team Reifen-Union/Top Service Team KG (currently about 400 outlets) and Vereinigte ReifenFachhändler GmbH (VRG; currently about 200 outlets) have agreed a far-reaching cooperation on all levels, including the servicing of large customers and fleet management. An important ingredient is the immediate creation of a company called “Team Reifen Partner” GmbH + Co. KG (TRP), which will gradually incorporate both VRG and new companies as members. VRG members will still have to approve this measure officially in a meeting at the end of January. The team group, to date with a membership of 25 regionally successful tyre traders and as such the number one marketing group in the tyre market, will thus embrace also smaller and medium-sized tyre trading companies, whose members have already given their official consent to the plan. The new group based on the team/VRG cooperatives with more than 600 outlets is set to expand its base. An essential precondition for tyre dealers with local and regional operations and aspirations also to serve trans-regional customers, especially fleets and leasing companies, is full geographical coverage throughout Germany. At the same time the new partners want to coordinate their procurement and stocking policy and improve their purchasing terms and conditions.
A report by the Consumers Association says that UK franchised motor dealers cannot compete effectively against rivals in every area of business, from new car sales to servicing. When it comes to repairs and sales of spare parts, the dealers cannot match prices and performance of competitors such as the large fast-fit chains, the study concludes.
This year’s Commercial Vehicle show at the NEC was a combination of three exhibitions – the SMMT’s CV show, the IRTE Show and Tipcon. No fewer than 579 exhibitors filled 42,500 square metres of floor space. Held over three days, the event attracted a remarkable 22,556 visitors and was generally held to be a great success. The tyre sector was well-represented, with manufacturers, retreaders and service providers, illustrating the importance of the commercial fleet market to tyre companies. Competition in this sector of the tyre business is fierce, with margins consequently depressed. TYRES & ACCESSORIES spoke to ten tyre manufacturers and retreaders at the show and the overwhelming message was that customers were demanding ever-increasing amounts of information and more sophisticated back-up services. The actual product of the tyre, given that it is of an acceptable level of quality in the first place, appears to be of less and less importance in today’s market. An increasing number of fleet customers are looking for a partner to handle every aspect of their tyre policy, from supplying product to carrying out maintenance and servicing breakdowns. How do the smaller companies, which lack the resources of large manufacturers, survive in such an environment? Read the views of the following ten companies in the May issue of TYRES & ACCESSORIES. Bandag, Bandvulc, Bridgestone/Firestone, Continental, Dunlop, Goodyear, Marangoni Tread, Michelin, Truck Tyre Specialists and Vacu-Lug.
If you would like the latest news from the Chinese tyre industry in Chinese, visit our partner site TyrepressChina.com. Or click below to continue on Tyrepress.
