Wheels
The high performance tyre market is traditionally the area where good margins are to be made. It is also a growing sector, with an increasing number of new cars routinely fitted with tyres that, a few years ago, would have been reserved for sports cars. Wheels are getting bigger and profiles getting lower – where will it all end?
From the beginning of May, Superior Industries has been supplying Mitsubishi Motors North America with three types of cast aluminium wheels for the 2004 model Endeavour SUV. This expands Superior’s OE business even further, with the company supplying a number of auto manufacturers, from Audi through to VW.
Group Tyre has successfully negotiated with Deldo to become the exclusive UK distributor for the Sunny brand; a tyre for which Deldo has exclusive European rights. Sunny tyres are available in 17 sizes, for wheels up to 17″, with new sizes being added as the brand develops. It joins Group’s other exclusive offerings of Stunner, Trayal and Eurotour tyres. Deldo’s decision to choose Group Tyre underlines the latter’s performance as a national distributor, furthermore, one who has the strength and ability to establish the brand in the UK.
The humble tyre changer – or not so humble if you can afford it – has to be one of the hardest-working pieces of kit in a tyre shop. And it is probably the most vital, so you need something on which you can rely. The fast-fitter needs a machine that can cope with innovations such as PAX and EMT and can handle the seemingly ever-increasing sizes of wheels, preferably without damaging the customer’s expensive alloys. Is it worth paying extra, or will a basic model do the job?
Cooper Tire & Rubber has purchased Max Trac Tire Co, which is better known as Mickey Thompson. Max Trac leased locations in Stow (Ohio) and Temecula (California) where it distribues tyres for specialist racing applications and off road use. Cooper acquires two tyre brands with the purchase – Mickey Thompson and Dick Cepek. Cooper Tire has supplied Mickey Thompson for a number of years, providing tyres under the Mickey Thompson and Dick Cepek names. In addition, Mickey Thompson has distributed and provided trackside assistance for Cooper’s Avon racing tyres, which are produced in Melksham, England. There are no anticipated changes in Mickey Thompson’s current relationship with suppliers of tyres, wheels or other accessories.
South African Tiger Wheels is planning to realign its investments in wheel manufacturing, which might lead ultimately to an overseas listing for the company. This was announced by CO, Eddie Keizan, as he unveiled an impressive set of financial results for the six months to December.
Patrick E. Miller has been appointed Vice President of Sales and Product Engineering for Hayes Lemmerz North American Wheels Business Unit. Prior to his new appointment, Patrick was a Vice President and General Manager for Alcoa Engineered Automotive Products.
Although turnover decreased by 0.8 per cent in 2002, compared with previous year, the Michelin group outperformed even analysts highest expectations with an operating income of 1.225 billion Euros (which is 7.8 per cent of turnover, and 18 per cent more than 2001). Net profit more than doubled to 614 million Euros. At the same time, management succeeded in reducing the debt mountain by more than one billion Euros – all within one year. Consequently, Michelin continues to be the best-earning tyre company worldwide.
Automotive supplier Montupet SA has completed a 75 million Euro investment at its Chateauroux plant in France. Montupet is one of the biggest suppliers of aluminium motor parts and produces for many car makers, especially the Ford group. The investment has given the plant the ability to produce 2.5 million cast aluminium wheels each year, making it the second largest facility in Europe. The company’s next project will be to invest in its wheel plant near Belfast to increase capacity from 700,000 to about 2.5 million units annually within the next three years. Montupet is the biggest aluminium wheel supplier to the PSA group (Peugeot and Citroen), one of three dominating suppliers at Renault and has recently begun supplying Nissan UK and Seat.
Lichfield-based Sherbrook International Ltd is entering the alloy wheel market and aims to hit the big time. It may be a new name in the wheel sector but the company has a long-standing heritage in the automotive industry and, for a newcomer to the wheels’ market, has an excellent record for getting things right. This could be just another player trying to make a few extra pennies from selling wheels while the market lasts but nothing could be further from the truth. The company has grown to a staff of 25, sourced from the automotive industry, each an expert in his or her field, carrying out negotiations between both ends of the supply chain. The company offers a 24/7/365 office service to the trade with constant monitoring of schedule performance and awareness of in-transit goods. This is built on effective customer communication and enables stock to be ordered from across the continent, or around the globe to meet Just In Time production processes. Rapid reaction to customer demands and a local technical support team result in quick problem solving which, with an agreed stock buffering system, eliminates supply chain down time from the manufacturing process. Now the company has a turnover in excess of 30 million Pounds and the financial backing of a large Turkish commercial organisation. Koç, this Turkish conglomerate, took over Sherbrook in 1998 giving the company a secure financial future and access to an even wider market and production base. Koç operates in Turkey on many levels, and its company logo of a Ram’s head in red outline is visible everywhere, especially in the Izmir area. In 2000 the Koç group had 9.2 billion Dollars of consolidated sales from 92 group companies employing 35,500 people. Core businesses cross many sectors, including automotive, banking, construction, household appliances, IT, and food and tourism. In the automotive sector the company has strong links with Land Rover, Ford, Iveco, Fiat and in components covers almost all areas. However, it is the Döktas foundry business which has led the company into wheel distribution in the UK.
Kirkby Tyres is a major wholesaler in the agricultural sector and is increasingly turning towards that market to develop its business. Kirkby Tyres has been around for a long time, almost 50 years in fact. In that time the business has seen many changes but through all the changes it remains in the hands of the Rosenthal family, with Gordon Rosenthal, grandson of the founder “Joe Rose” at the helm. The company started as a casings collector and dealer, before developing into wholesaling. When the wholesaling of new tyres outgrew the casing side, the company made the decision to concentrate on new tyre distribution. Gordon Rosenthal took over from his father, Leslie Rosenthal, as Managing Director in 1980. Gordon is now Chairman, with Dave Dorrity joining the company in 1999 as Managing Director. Kirkby Tyres operates with three depots to cover the British Isles. The head office is at Liverpool and there is a depot in Perth, Scotland which offers a very similar stock profile to that in Liverpool, though the demand for high performance and premium car tyres is stronger north of the border. Ireland is covered from Dublin by Kirkby Tyres (Ireland) Ltd and in addition to the full range offered in the UK is the Irish agent for Ohtsu/Falken, and is the sole distributor of Wolfrace and Smiths alloy wheels in Ireland. The Group has a turnover in excess of 16 million pounds and employs 61 staff. It is worth noting that the breakdown of the business puts the agricultural sector at 45 per cent of the Group’s turnover, truck at 35 per cent, and car and earthmover at five per cent each.
India’s largest four wheeler tyre manufacturer celebrates its silver jubilee. J. K. Tyre is a division of J. K. Industries, which is itself a flagship company of the J. K. organisation; one of the largest industrial groups in India. As well as tyres, the group’s manufacturing activities include paper, cement, textiles, hybrid seeds, cosmetics, power transmission – the list is as varied as it is extensive. J. K. Tyre was established in 1977 and has established itself as India’s number one manufacturer of tyres for four wheel vehicles under the JK Tyre and Vikrant brands. In this sector, J. K. Tyre claims a domestic market share of 20.8%. In the truck and bus tyre market, which accounts for around 80% of the Indian tyre market by value, J. K. Tyre claims a market-leading 25.8% share. In 1997, J. K. Industries took a major strategic decision to acquire Vikrant Tyres Ltd., an ailing tyre manufacturer. With the input of J. K. Tyre’s expertise, systems, marketing and work practices, Vikrant achieved a remarkable turnaround, returning to profit after only ten months. Today, J. K. Tyre has four Indian production facilities, with a capacity of 5.5 million tyres. This growth is set to continue, with production over the next two or three years rising to some eight million tyres. The company also boasts India’s first, and only, all-steel truck and bus radial plant. Being a pioneer of radial technology involved J. K. Tyres in a great deal of hard work and effort to spread the word about the benefits of radials, but this has been rewarded as the J. K. Tyre brand is strongly associated with radial tyres. The company’s marketing strategy was focused on offering high performance radials with service being the brand differentiator. One aspect of this was the establishment of a chain of retail outlets, offering a one-stop sales and service centre. Going under the name “Steel Wheels”, there are more than 100 such outlets in India and J. K. Tyre claims that they have revolutionised tyre retailing in India – offering services such as wheel balancing and alignment and advice on tyre care by well-trained technical staff. Another marketing initiative is the “Dial-a-Tyre” service, which allows customers to have tyres delivered and fitted in the comfort of their own homes. This is the latest in a line of innovations, which includes India’s first T-rated tyre, the first H-rated tyre and the country’s first Dual Contact tyre, the “Aquasonic”. The company manufactures a range of tyres to suit all four-wheel applications, from cars to trucks and buses, agricultural vehicles and tractors, plus there is also a range of tyres for animal-drawn vehicles. Both radial and bias ply tyres are produced.
For every business there are items that you can hold in stock and you can sell them at any time. Tyres, wheels, exhausts, batteries, all can be sold off the shelf. If you don’t sell them today you can sell them tomorrow. For some businesses their stock in trade is time. The hotel trade doesn’t sell rooms, it sells time. The rooms will always be there, but they are each allocated time which they sell. The problem with selling time is that you can only sell it once. The fast fit operator – indeed any garage operator – has the same difficulty which we call ramp time. Fast fits may not actually sell the ramp time, but every minute the ramps are not occupied by vehicles undergoing profitable work the option to sell work on that ramp is vanishing down the plughole of time. Most service managers recognise this and try to minimise the time vehicles spend on the ramps. Buyers will ensure that the exhausts they buy have a problem-free fitting procedure. In the efficient garage, time management is everything. However, even with the best time management of jobs there is, for many depots, the point where the work being done fails to fill all the available time. There can be three outcomes to this. The first, and most likely, is that the time allocated to the job is stretched to fill the time available. We all recognise the scenario – we take our car to the garage for a repair – the garage is devoid of customers, four mechanics sit reading the newspaper – it takes all day to do the job. On another day we arrive and the cars are lined up outside the doors. The same job is done in an hour. The second outcome is that the jobs are carried out as efficiently as possible and the ramps lie ready for their next customer. This may well be a better practice than the first, but it doesn’t sell the time when the ramps are not in use. The third option is to find another profit centre which will see the ramps in use. Since we are in the wheel and tyre business there is a tendency to keep the business revolving around the four corners of the car – brakes and shock absorbers are the most popular additional parts’ areas for fast fits. Skill levels required are relatively low, so labour costs remain low. The parts are often, though not always, fast fit. Pull off the old and fit the new. Some have dabbled in so-called fast fit clutch operations – but fast fit is all relative. If someone drives in with a Ford Mondeo or a Transit and asks for a fast fit clutch they may think your fast fit description is stretching the realms of credibility. Further, your mechanic’s time with the vehicle on the ramps – possibly special ramps – ties that bay up and, again, you can only sell your time once. There are, of course, other options; basic servicing is only a short step from fast fit work, though your reputation depends upon the skills of your mechanics. Can you afford to pay a mechanic rate to someone who may spend most of his time as a tyre fitter? MoT bays are yet another option. Both MoT bays and service operations can be used to open doors to enhanced tyre, exhaust, and accessory sales. However, there is one profit centre which may well be worth considering as a development to ensure those ramps are never left empty. As one commentator told T&A, “without diagnostics all the service garages are going to be left with are tyres and exhausts.” That statement should send shivers down the spine of every fast fit operator in the country. If the service garages are being forced to move into tyres and exhausts in a big way in order to retain their revenue, that must ultimately have a detrimental effect on the wellbeing of the fast fit depot – dragging revenues down.
Wheel balancing is much more than sticking a lead weight on a wheel – increasingly, people do not want their nice, expensive alloy wheels defaced with a lump of metal, so new programmes have to be introduced to make sure that the weights are hidden, yet safely attached. And the weights differ too, depending on the car model and wheel type. Then there’s the “ban lead weights” argument – all in all there’s more to balancing than appears at first sight.
The National Tyre Distributors Association has formally endorsed the new Tyre World event, scheduled for October 2003 in Earl’s Court, London. Buzz Carter, of organisers IDEX Media, said that London had been chosen after extensive research showed that it was the preference of domestic and international visitors. Tyre World will include a programme of seminars and associated events, including the NTDA’s annual conference Intyreactive and the national “Tyre Technician of the Year” competition. Further details are expected soon.
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