News from the tyre wholesale sector
Newark based Tanvic Tyres is planning to make “wholesale” changes to its operation. In order to streamline the business and improve efficiency, from 1 January 2006, Tanvic Tyre Distributors Ltd and We Sell Tyres (Wholesale) Ltd will come together to form The Tanvic Group Ltd.
The major change will occur when the Newark based TS Wholesale re-brands under the We Sell Tyres (wholesale) name before the end of 2005. Tanvic Spares Ltd will remain a separate company.
Net sales of Nokian Tyres plc were up by 17.8% to 295.4 million euros in the first half of the year (250.8 million euros in the corresponding period in 2004). Operating profit amounted to 46.1 million euros (32.8 million euros).
Group Tyre claims to have seen “huge benefits” by continually investing in IT and embracing the e-commerce route. “We are constantly innovating,” says Group Tyre chairman John Church, “because we are committed to delivering a national-strength service, with immediacy of response on a truly local basis. By making IT work positively for us, we can provide a service that is literally second-to-none.”
The Group Link Virtual Warehouse is the main service offered to Group Tyre’s national wholesale network. The Windows based system confirms stock availability by providing real time stock data and expected delivery times. Together with mark-up guidelines, Group Link enables a customer enquiry to be processed with delivery and cost advised on the spot. The benefits of offering an e-commerce solution have been an improvement in customer care and sales which have had a massive impact in the independent tyre sector, says Group Tyre.
In February 2005 Supply Direct managing director, John Prout, closed an exclusive distribution deal with Chinese equipment manufacturer, Ever Eternal. Now, as a result of “mass demand” Ever Eternal exports its equipment to the UK at an accelerated rate.
Supply Direct’s management team regularly visits China in order to maintain strong relations with the company’s supplier. The most recent visit was in July with product development for the UK market at the top of their agenda. With the company reporting such strong business in the UK, John Prout, hints that expansion into Europe could be the next step.
Goodyear UK’s MD Dick Johnston recently paid a visit to Ireland’s Modern Tyre Service to congratulate directors and staff on their 40th anniversary.
Having started in 1965 the company now operates through two headquarters based in Newry and Enniskillen. Following extensive investment, and the acquisition of several new depots, Modern Tyre now has a total of 26 branches making it the largest independent tyre retailer in Northern Ireland. The company services the private, fleet and wholesale markets with all major brands of tyres as well as batteries, exhausts and alloy wheels.
(Akron/Tire Review) Tire Group International Inc. (TGI) has acquired a 600,000-square foot warehouse facility in Miami that will be converted into its new headquarters.
(Akron/Tire Review) Automotive News has reported that the Los Angeles-based investment group, Leonard Green & Partners will buy a 49 per cent stake in the Tire Rack. Leonard Green & Partners, which also owns shares in the Rite Aid drugstore chain and Diamond Triumph Auto Glass will effectively buy out The Tire Rack founders, Peter and Wilma Veldman, while remaining family members and senior management would retain 51 per cent in the South Bend, Ind., mail order and wholesale tyre and wheel company.
Family members and senior management that will retain majority ownership include Mike Joines, Tom Veldman, Matt Edmonds and Mark Veldman. In addition The Deal.com suggested Leonard Green & Partners’ would spend in excess of $350 million for its minority stake in The Tire Rack.
National wholesaler Southam Tyres, a trading division of Micheldever Tyres Services Plc, has an established position when it comes to private brands. And as the home of the UK’s first exclusive own-brand tyre, the company is in a good position to comment on the future of the private brand concept. Similarly Stapletons Tyres Services is another of the UK’s most influential tyre wholesale businesses and sells significant quantities of private brand products. When Tyres & Accessories spoke to the company’s two marketing managers (Stuart Amos representing Southam Tyres and Stephen Marsh, Stapletons), they explained that there is an art to selecting the right brand and sizes and that private brands are moving away from being synonymous with yesterday’s technology, towards the forefront of consumers’ high performance demands.
(Akron/Tire Review) Federal Tire Co. has appointed Henry Lin as vice president of sales and marketing. Mr Lin had previously worked for Federal before leaving and then formally rejoining the company in March.
(Akron/Tire Review) Treadways Corp has announced several organisational changes, effective 1 May. First, Lyle Symonds has been appointed senior vice president of private brand sales. Mr Symonds will oversee Treadways’ Laramie, Eldorado, Jetzon and Telstar tyre divisions and will report directly to Roy Araki, president. Previously, Mr Symonds was vice president, sales and marketing for the company’s Eldorado division.
National tyre wholesaler, Stapletons has made strategic supply chain appointments. Ian Kirkpatrick will move from his role as national logistics manager becoming head of supply chain as part of the company’s ambitions to work even closer with UK and worldwide tyre manufacturers.
Goodyear has announced the appointment of John Tseng as chairman and president, Goodyear Greater China. Tseng previously served as corporate vice president and general manager digital and film imaging systems for Eastman Kodak’s North Asia operations.
One year after becoming chairman of the NTDA’s Tyre Wholesaler Group (TWG), Peter Gaster addressed his second TWG annual lunch. In his speech the managing director of Kings Road Tyres conveyed the TWG’s support for three millimetre tread depth, shared his thoughts on how businesses can protect their ever-decreasing margins, while warning members of the continuing and expensive reality of health and safety scrutiny. One of the industry’s best-known figures, Sir Tom Farmer, also addressed the collection of members and invited guests.
According to TWG chairman, Peter Gaster, profits margins are under continued attack: “In reality we all face many of the same problems and as we know tyre prices are on the way up, I think we will all have to carefully consider the need to remain competitive and take into account our rising costs, as I don’t think that wholesale margins can absorb these increases,” he said adding, “as wholesalers we need to focus on maintaining service, as essentially that is what we are, service providers. But rising costs are putting us under pressure to maintain this level of service and keep prices down.”
In his speech, Mr Gaster went on to define one source of this continuing pressure, the requirements of the health and safety executive. “I am not complaining about the need for proper and safe working conditions, and I understand that this needs to be monitored, but it appears to me that the tyre industry is under scrutiny and I can only repeat what I have said before – if you have not had a visit, you probably will,” he explained.
Wholesalers are not tax collectors
For Mr Gaster, the devil is in the detail: “I don’t hide from the fact that I am personally concerned about the increasing bureaucracy, red tape and legislation that this government continues to burden the industry with.” Warning that the powers that be were responsible for the current situation, the TWG chairman told of his frustration at being treated as an unpaid tax collector: “If anyone from the government should hear or read this speech, I will be very happy to explain in detail about my frustrations. I recently received a letter from our local MP who wanted to know how all the advantages of ‘government working with business’ was helping our company – I am still working on my response.”
However there was definitely a positive side to the story: “The good news is that the NTDA has been working closely with the health and safety executive and has recently agreed upon an advisory package regarding the manual handling of tyres in the workplace. I think it is fair to say that if the NTDA had not been consulted, the resulting regulations would have been extremely difficult to apply.”
When is an E-marked tyre not a European tyre?
The love/hate relationship between wholesalers and manufacturers was also briefly touched on. “I received a letter, as many of us did, from Goodyear/Dunlop regarding their right to protect their trademark on the one hand, and warnings about compounds etc on the other. In seeking clarification of these intentions I would ask one question. If a tyre is E-marked and is homologated for the EEC, wherever it is made, is that tyre not legal and fit for use in the UK?” From Sir Tom Farmer’s point of view this kind of banter comes with the territory. “They are just doing their job,” he said, adding that “its all part of the fun.”
Mr Gaster also highlighted the TWG’s “unanimous support” for the current campaign to improve awareness of three millimetre tread depth, which is being driven by Brian Smith of Continental. “We at the TWG and the NTDA are firmly behind this campaign and will do all we can to support it via out association and by choice as individual companies. Let us not forget that our parliamentarians and police forces do not ride on tyres with less than three millimetres tread depths.”
Referring to the government’s landfill directive, Mr Gaster explained that he was “delighted” to confirm that “the current thinking is the industry has taken care of the problem so far and has increased the recovery rate away from land fill up to approximately 85 per cent. Therefore the government has agreed to monitor this progress and in the meantime will not be putting forward mandatory legislation.”
BMTR celebrated its 85th anniversary at the end of 2004 and to mark the occasion Group Tyre hosted a special dinner and presentation eveningat a prestigious hotel in Sutton Coldfield.
For BMTR, motorsport involvement began in the years after WW2, when motor racing commenced at Silvestone and Goodwood. The pattern continued in the 1950s and 1960s when Don Smith successfully raced Jaguars. Paul Smith Followed in his father’s tyre tracks by competing with Nigel Mansell, Derek Warwick and Geoff Lees in Formula Ford. Progression into Sportscar racing saw two class wins at Le Mans and subsequently a successful move into Thouroughbred Grand Prix cars, one of a number of UK and European race series that BMTR supplies.
“BMTR has been a pillar of the West Midlands motoring scene for longer than any of us can remember, and yet it is a company that has matched the latest technology with its heritage provide a unique depth of service. At Group Tyre we want to pay tribute to what is a continuing industry achievement and to congratulate our colleagues at BMTR,” said Group Tyre chairman, John Church, commenting on the company’s anniversary.
On another side of the business, the company continues its policy of “expansion on all fronts,” with the recent acquisition of an additional 20,000 square feet of new warehouse space. Paul Smith explained that this is geared towards the wholesale area of the business, enabling increased levels of stock to be held across both front line and budget brands. “This initiative is better enabling us to offer service to both our existing and new customer base. Service support radiates around 40 miles from Birmingham city centre. Our aim is to continually improve service to enable us to give better first time availability on all Group Tyre supported brands,” he said.
Magowan Tyres is a family-owned and run retail and wholesale tyre business, based in Belfast. The founder, Darryl Magowan, has been in the tyre industry for more than three decades and is still in charge of the overall direction of the company.
His son, also called Darryl, is managing director of the company and his speciality is purchasing. With the Northern Ireland market being, in his phrase, “exceptionally price conscious”, it is a distinct advantage if you can buy cleverly. Magowan is very active on the parallel market, importing around eight containers a month from Europe and the USA.
For almost 20 years, Magowan Tyres was purely a retail business, moving into wholesaling only three years ago. I put it to Darryl Magowan (Jr.) that this was an odd time to enter the wholesale sector, with rising transportation and associated costs. His response was that the company had examined the situation carefully and weighed up the pros and cons. The main reason was that there was a growing demand in the Irish market for ultra high performance tyres and a lack of wholesale supply.
The main market for Magowan Tyres is Northern Ireland, especially Belfast, where the company offers deliveries up to five or six times a day, if required. The service in the Irish Republic is less frequent, but a next-day delivery is standard. Because of the low density of population, which, apart from the major towns and cities, is very spread out, running a wholesale operation efficiently and profitably means keeping a close eye on day to day running.
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