Wholesalers See Great Potential in Russia
The Tires & Rubber show was unmistakably a genuine tyre trade show, despite its appearance as an event mainly attracting machinery and raw material suppliers. Among the 197 exhibitors at the show, which took place in Moscow from March 4-7, 2008, were only a handful of tyre manufacturers – but plenty of resellers, importers and wholesalers. And most of these companies are only interested in the distribution of tyre brands produced outside of Russia, i.e. in China, Korea or Europe.
Together with Russian importers such as Petromaster (Hankook, Sumo Firenza), Avantek (Alliance), Satim (Mitas) or Yarshintorg (Sumitomo), TransGaz Komplektatciya presented itself to visitors of the Moscow Tires & Rubber show and featured the “Primewell” brand. This brand is produced by Giti Tire in China and TransGaz is initially importing only truck tyres from this range. Later, however, Giti’s new importer in Russia will also import and distribute Primewell and Runway passenger car tyres. Runway is yet another brand from the GT group (Giti Tire from China and Gajah Tunggal from Indonesia). To what extent, if at all, TransGaz will play a major role with regards to importing the group’s core “GT Radial” tyre brand has yet to be decided, says Richard Lyons, sales director with Giti Tire Europe and thus responsible for the Russian tyre market, in an interview with Tyres & Accessories.
According to Mr. Lyons, TransGaz is launching Primewell truck tyres “high up into the B segment of the market.” And he also points out that these tyres will not be marketed as just any other commodity. According to Giti Tire, its Primewell truck tyre partner will also take on the job of servicing the market and customers. Although the Russian truck tyre market currently has a service level similar to that in Europe 15 years ago, Giti Tire does not want to compromise with regards to added value offered together with the product itself. As Lyons emphasises: “We are also offering extensive fleet services.” Thus, for example, the fleet concept “GT Assist”, including a breakdown service and retreaded truck tyres, will be established in Russia. Although the ultimate plan is to cover the whole of Russia, Giti Tire will by necessity start off in major metropolitan areas in the Western part of Russia, launching a professional truck tyre service together with TransGaz and its customers in Russia’s tyre trade. It is no secret that the Russian tyre market “is a very complicated market”, meaning that not only are logistics in Russia more demanding than in Western and Central Europe but that also competition is growing strongly in hand with a fast developing market.
All in all, the Russian truck tyre market will be developed and approached “in the same way as we have done in Western Europe”, says the sales director while explaining the goal of establishing a proper fleet service in Russia. It will involve covering the market with a variety of tyre brands from the group’s portfolio and at the same time offering a professional fleet service together with its partners on the ground. TransGaz’s role will be to either supply end consumers directly or through other tyre dealers; Giti Tire’s new Russian importer will sell a large proportion of the Primewell truck tyres directly to fleets, as TransGaz’s general manager Andrey Voronin points out. However, it will certainly take time and a lot of hard work before Giti Tire reaches its goal in Russia. For this goal to be attained, for example, customers would have to rethink their approach in regards to the use of tyres – truck drivers and fleets usually consider their tyres as a consumable instead of a production factor. But this process of rethinking is currently under way in Russia, according to Richard Lyons.
Also interested in establishing its tyre brands in the growing Russian tyre market is Deldo Autobanden. The Belgian wholesaler exhibited – just like Giti Tire – for the very first time during the Tires & Rubber show in Moscow. “It is a new market for us,” says Ilse De Poorter, who joined Deldo half a year ago as a sales manager for the Russian market. But the Belgian company is eager to change this situation as soon as possible. As the sales manager points out, initial contacts in Russia with potential customers have already been made and first shipments have been sent. The Russian speaking sales manager comments that it is in the major cities of Moscow and St. Petersburg where Deldo is acquiring customers. As she continues, together with her colleague Maciej Szargut who is responsible for the Eastern European market, Deldo’s approach to Russia is not only based on its portfolio of private and exclusive brands such as Minerva, Fortuna, Wanli, Sunny or Roadstone but also on the distribution of all other tyre brands. Currently, Deldo Autobanden is intensively seeking Russian distribution partners. It goes without saying that this requires time, however, approaching the local market in Moscow and St. Petersburg has not been overly difficult given that local demand is very similar to that in any given area of Western Europe. The structure of the car pool in Moscow and St. Petersburg is very similar to that in Western Europe, thus local tyre demand also is not too far removed from other areas in Europe. In the Russian countryside demand is an entirely different story.
Although Deldo’s new sales manager believes that Russian tyre factories have some potential on the European tyre markets, in particular in Eastern Europe, the Belgian wholesaler was not too keen on marketing such brands here. “We are not too interested in the Russian brand tyres.” Furthermore, comment was made that exporting tyres from Russia is barely possible without a major bureaucratic effort.