Tyre Agents Become New Intermediaries
The booming Chinese tyre industry has not only created various new business relations between manufacturers and distributors but it has also supported the growth of so-called tyre agencies. These companies act like wholesalers although they have no own stock capacities available. In turn the tyre agents are professionalising the interface between Chinese manufacturers and suppliers and foreign customers. The Aufine Group Co., Ltd. based in Qingdao is one such company.
The privately owned company was founded in 1998 and since then has gained a respectable level of expertise in its business. In the list of available product segments (catalogues of Chinese tyre agents are often sorted according to application and not to brands) there is a whole range of radial tyres as well as bias OTR, agricultural and industrial tyres. The brochure also contains well-known Chinese brands such as Wanli, Linglong and Triangle. All in all Aufine has about 30 different tyre brands in its portfolio.
In addition to a number of brands which are relatively alien to the European market, the tyre agent also has a private brand called Aufine listed in its catalogue. This new brand is not available yet, but will be from next year on. The Aufine name will initially be used on the sidewalls of radial OTR tyres Later on the production of a UHP passenger car tyre is envisaged. In the TBR tyre segment Chengshan and Austone are the best-selling tyre brands, Austone says. In the OTR tyre segment this is Triangle, and in PC radials this again is Chengshan and Triangle.
Of course the tyre agent was always obliged to respect special arrangements between the manufacturer and foreign customers. If a Chinese tyre manufacturer for example has granted a status of exclusivity to a wholesaler in Europe or in a state within Europe, Aufine cannot sell this brand to a competitor within the same market. Thus Aufine is confined to the markets were its business depends on the relations between the tyre manufacturers and their direct customers. But, where it is legally possible Aufine, also grants exclusive distribution rights to dealers from around the world, provided that the tyre manufacturer does not have any contradicting plans with its own tyre brands.
According to David Sun, Aufine’s export manager, the tyre agency offers a “one stop shop service.” This gives customers around the world the opportunity to save costs and time. “We know the market, we know the tyres and we know the manufacturers,” Mr Sun points out in an interview with Tyres & Accessories, explaining customers advantages associated with doing business with tyre agencies over doing going directly to manufacturers.
Since Aufine was founded eight years ago its business has developed strongly, the export manager says. According to him Aufine ships to about 100 containers every month. From the day a container-load of tyres is ordered with Aufine, it takes the tyre agency one and a half months to supply the tyres. This delivery time of course always depended on the logistical and administrational circumstances, Mr Sun adds. The Aufine Group has a preferential order scheme with most Chinese tyre manufacturers. Thus this special right allows the tyre agent to save a considerable amount of time between ordering and delivering tyres – Aufine’s orders are dealt with first, then other single orders are processed.
In 2007, says the export manager, the Aufine Group wants to increase its tyre agent business by 50 per cent. Furthermore the company says it has particular growth strategies for the German and UK markets. Currently the tyre agent is not present on all Western European markets.