The Netherlands Authority for Consumers and Markets (ACM) announced today that Global Automotive Investments Holding BV, parent company of major tyre wholesalers Inter-Sprint and Van den Ban, intends to acquire PBG BV (Pon Tyre Group), the company that previously distributed the Continental tyre brand in the Netherlands. Global Automotive and current PBG owner Pon Holdings requested permission for the transaction on 29 January.
The effects of the coronavirus and Brexit have led to an increasingly severe shipping bottleneck. The inevitable result of all of these factors is price increases. Tyres & Accessories spoke with Micheldever Tyre Services (MTS) wholesale director Graham Mitchell in order to find out more about what this means for the tyre retail sector.
Getting right to the point, are prices going to go up in 2021? “Undoubtedly,” was Mitchell’s immediate and definite response, with the wholesale director pointing to the three main factors behind the current and forthcoming price hikes as well as the different variables associated with each: “Containerised cost of product coming out of the far east…that’s not doubled, that’s quadrupled…a significant on-cost not to be underplayed…and then you’ve got a currency element that’s forcing manufacturing costs up as well.” The good news is that wholesale sources are confident that the containerised element is temporary, but the same cannot be said about other factors.
A couple of weeks after the end of the UK’s second lockdown, Tyres & Accessories spoke with Micheldever Tyre Services wholesale director Graham Mitchell. Since Mitchell was part of the panel in our inaugural “Kickstarting your tyre business” webinar in May 2020 at the end of the first lockdown, we thought it would be good to catch up at the end of the year and compare the differences between the first and second lockdowns. In short, while many shops closed during the first lockdown, the vast majority were open for business during the second. We also discussed 2020 as a whole and looked forward to 2021.
Micheldever Tyre Services (MTS) has expanded its tyre distribution capacity with the addition of a new warehouse in Exeter and the expansion of its Nottingham and Walsall sites. The new 22,078 square foot Exeter location became fully operational in the summer. According to the company, the site expands stock-holding capacity by roughly 50 per cent from 11,000 to 16,000 tyres, whilst also providing an improved stock-keeping unit (SKU) range of 2,518 SKUs.
Black Friday has established itself as a fixture in the retail run-up to Christmas here in the UK and in Europe, and even tyre distributors benefit from the associated purchasing euphoria. Heuver Tyrewholesale shares that it sold more tyres in one day than ever before, giving the company a Black Friday that represents the “pinnacle of an upward curve” that began with the sudden, corona-related increase in online orders in March.
The Springwater Capital financial group has made a binding offer for Fintyre, which is currently controlled by Bain Capital. No details have officially been released, but some Italian news sources are reporting that the Springwater offer includes a capital increase of 50 million euros. The company has been in talks with potential new investors since May.
Work on RH Claydon’s new 20,000 square feet warehouse in Launceston, Cornwall is almost complete. RH Claydon (RHC) representatives are aiming for the location to be fully operational in January 2021. For them, more space means more stock to supply the tyre wholesaler’s “already growing customer base in the south west of the UK”.
There have been serious challenges to tyre distribution in 2020, and while demand has returned with the end of the national lockdown, Covid-19’s autumn rise means the spectre of spring’s market conditions looms over the winter months. This year, companies have needed to manage the operational problems posed by the Covid-19 pandemic and lockdowns throughout Europe; they also needed to weigh up wildly fluctuating supply and demand. Whether there is a return to a concerted national effort similar to the UK’s actions in April and May or not, the lessons learned during this period continue to prove relevant. Meanwhile, the sector was already experiencing difficult times prior to the outbreak, with European tyre market demand flat overall in the light vehicle sector – a situation that certainly deteriorated in the pandemic. For the October magazine’s wholesale feature, Tyres & Accessories spoke to a range of players in the wholesale sector in Western Europe to look at the lessons of this year, and how recovery is progressing. We start with Micheldever Tyre Services, a leading UK player in the light vehicle tyre market especially, which has experienced a “strong” return of demand in the second half of the year, according to wholesale director Graham Mitchell.
Bush Tyres is set to open three new locations during the next couple of weeks. First off, the company is opening retail centres in Norwich and Immingham. In addition, Bush Tyres has invested in a new 70,000 square foot warehouse as well.
With its AU$48.7 million (£26.7 million) acquisition of Tyres 4U assets in Australia and New Zealand, National Tyre & Wheel becomes one of the region’s largest tyre wholesalers and the largest independent, multi-branded wholesaler in both countries. The transaction was finalised in August and more than doubles National’s distribution centre footprint in the two countries, with its nine company-owned and four third-party facilities complemented by 11 Tyres 4U centres in Australia and three in New Zealand. Combined tyre volume for the Australian financial year ending 30 June 2020 exceeded 2.5 million units, with a revenue of $450 million (£247 million).
Same-day service is convenient, but Tire Group International (TGI) can go you one better. The Miami-based tyre wholesaler is now offering its customers in South Florida guaranteed deliveries within 90 minutes of ordering. It is providing this ‘TGI Fast Pass’ programme in addition to its existing twice a day delivery service.
Netherlands-based tyre wholesaler Heuver has grown through its acquisition of the Bevri Groep, a wholesaler from Zeewolde in central Netherlands. Heuver will operate the two Bevri businesses, Bevri Banden (Bevri Tyres) and Bevri Wheels, as an independent company within the Heuver Group, retaining a separate corporate identity. The wholesaler says that by combining the strengths of both companies, it can now “offer an even more complete range” of tyres and wheels.
The current COVID19 crisis has posed the biggest challenge to Micheldever Tyre Services (MTS) in over 45 years of operating in the 4×4 market, the company reports, resulting in MTS increasing support to its dealer network to unprecedented levels.
Anyone wanting to know how Reifen Krieg founders Holger Krieg and Tobias Fink would react to the bankruptcy of the tyre wholesaler they founded in 2007 and then sold to the Fintyre Group in 2018 no longer needs to wait. They have founded Tyroo GmbH in Neuhof, Germany.
Last month this column considered the range of 2020 market projections that existed. In short, as the column concluded, the consensus is that tyre demand will decline somewhere between 15 and 26 per cent during the course of this year. However, such a conclusion may also be on the conservative side. Certainly, when you talk with tyre wholesalers and distributors on the ground, some of those that didn’t opt to close their doors for a few weeks experienced even more marked declines in the short-term. Reports of tyre shops running on demand 70 to 75 per cent less than pre-lockdown levels are not uncommon. And yet, as lockdown eases across various UK and European markets – as well as beyond – the focus is quite rightly shifting to recovery.
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MTS
RH Claydon
MTS
Silksheen Photo, Bush Tyres
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Tyroo
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