‘We are The Bubkas of the Tyre Business’
When asked to sum up his company’s year “business is going well,” is the response given by Deldo sales manager, Stani Delcroix. By this he means that the company has once again broken its own sales records with turnover growing 10 per cent to 235 million euros. Delcroix said he believed this was impossible to beat, that was until the company achieved a further 8 per cent growth (year-on-year) in the first quarter of 2006.
1.8 million of the 5 million tyres Deldo sold last year were sourced through the company’s Chinese manufacturing connection, South China Tire & Rubber (the manufacturer of Wanli and Sunny tyres). And Stani Delcroix reports that the company’s studable winter product received particular attention from customers in Eastern Europe, Ukraine, Russia and Belarus. However, the company’s two largest markets remain Germany followed by the UK.
“Everybody wants to have a piece of the EU cake,” Delcroix comments, observing “there is still demand for 13-inch tyres.” This is said to particularly be the case in markets like France and Spain, where companies are aiming at drivers of small Seat, Fiat and Renault cars. And across Europe, “the price fight is only starting.” Despite raw material price increases, some 17-inch tyres are cheaper than in 2005.
Deldo continues to consistently outgrow the market, according to Delcroix. The reasons behind this are said to be the company’s better sales, logistics and approach. (On the subject of logistics, Delcroix points out that Deldo has purchased 8 new trailers this year). “We are the Bubkas of the market,” says Stani Delcroix, likening his company to all-time pole-vaulting great, Sergey Bubka. Deldo it seems is comparing its consistently improving performance to that of a man who broke the pole-vault world record 35 times – a lofty goal!
But that is exactly the ‘Deldo difference’ that Delcroix is trying to communicate – when others sit back and think they have arrived, Deldo push forward with new ideas. One of the ideas the company is considering in this respect is the introduction of a new winter tyre programme, more details of which will be available by the end of the year. It is hoped that this tyre could be produced with the expanded capacity that South China will add in the next few months. In addition the company is definitely interested in producing a new studless winter tyre primarily for German, Austrian and Swiss markets.
Next the company is preparing plans to serve the 2nd/3rd owner market in the relatively new SUV segment. Delcroix expects that these consumers will not be willing to pay OE replacement prices, leaving room for Deldo to provide its alternative.
Furthermore the SUV segment is reportedly growing in Russia and the new EU market. “We have a big job to do here,” Delcroix comments, referring to the Russian market.
As Deldo looks forward to the next winter season, the sales department reports that it has observed two purchasing tendencies. Firstly that clients are increasingly “putting out large orders in private brands before the beginning of the season. They want to assure their available quantities during the season and thus answer to growing demand for affordable tyres. For this they are prepared to take a big stock even before the summer has started.” And secondly: “Many traders are reluctant to take up premium brands in their warehouse. Therefore, they rely on the just-in-time deliveries by Deldo – parcel service has once again become more important in the tyre business.”
Commenting that the Essen show is “the best tyre show in the world,” Deldo representatives observed that what differs from previous fairs, is the country of origin of the visitors. “During the last couple of shows there was always a growing number of foreign traders, especially from Asian and North-African countries. This year’s edition brought however a relatively large number of European contacts. Within Europe it was especially Germany, North and Central-Europe that were represented,” Deldo’s Germany, Switzerland and Austria salesman observed.