ATS Euromaster More Than Just a Tyre Provider
With 130 mobile units for cars and vans on the road, 200 car/van/truck dual-purpose units and 550 truck service vehicles in use throughout the UK, ATS Euromaster can lay claim to operating the nation’s largest mobile servicing programme for car, van and truck fleets. This places the company in a good position to observe happenings within industry in 2009. Indeed, ATS Euromaster has seen fleet operators react to the economic slowdown in a number of ways.
“As far as car fleet is concerned, that has remained reasonably stable,” reports ATS Euromaster group sales director Peter Fairlie to Tyres & Accessories. “We have witnessed fewer new vehicles entering fleets, but increased contract extensions. Fleets are typically looking at longer-term leases. Instead of 34 or 35 months, leases of around 38 months are increasingly being adopted. This pushes cars into requiring an MoT while out on contract, an occurrence that presents opportunities for us.” The chance to snap up further car fleet business comes as icing on an already growing cake; Fairlie reports that ATS Euromaster currently holds a 28 market share amongst FN50 (Fleet News top 50 car leasing companies) fleets – up from 20 per cent in the last eighteen months to two years.
The recession punched sectors utilising road freight transport more forcefully, however, and the group sales director reports this has been reflected in its truck business: “Truck has been hard hit, with a decline of approximately 20 per cent. There are fewer vehicles on the roads and those still on the road are travelling fewer miles.”
Fleet operators have responded to declining business differently. “It’s been a mixed market,” Peter Fairlie observes, adding that smaller sized fleets are more likely to have adopted a ‘raise the drawbridge’ approach. “Smaller truck operators are taking a more price sensitive view of the situation,” he explains. “Premium tyre brands have been losing ground to budget brands. Many operators are not just opting to buy tyres that are a level lower, they have gone right down to the bottom level. Smaller operators want to survive today. They feel the need to ‘baton down the hatches’ and manage cash effectively.” Some smaller operators, Fairlie continues, are simply parking some of their trucks and trailers, and cannibalising them for tyres and other needed components rather than purchasing these items. Larger fleets, in contrast, appear much more open to looking at value solutions: “They are looking at the whole life of the tyre instead of initial price. We are winning contracts on this basis. Sizeable mid-range players in the market have taken a more realistic approach and are looking at factors such as fuel consumption and wear instead of just buying the cheapest.”
Looking forward to 2010, Peter Fairlie believes a three to four per cent improvement in the market to be likelier than a dramatic uplift. “Even then, we don’t see things starting to pick up until the second half of quarter two and the second half of the year,” he elaborates. I think next year will be a bit more of the same, but with gradual improvement. The first quarter of 2010 will most likely be flat, while the next quarter will show shades of improvement.”
ATS Euromaster holds maximising tyre life and reducing operating costs as its key priorities. As Peter Fairlie explains, the company is a service organisation, not just a firm that sells tyres. One area where this can be seen is in ATS Euromaster’s view of regrooving. “Our philosophy is to maximise value,” he states. “Yet the industry doesn’t always help itself. Most service providers regroove truck tyres, but the price they charge to do so barely covers the technician’s costs, let alone any additional expenses. Therefore tyre service providers are not particularly keen to regroove, and often the customer has to instead cover the higher cost of a new tyre. The industry must find a win/win solution with the customer, and the real value of regrooving must be appreciated.”
Addressing the well-publicised closure of ATS sites this year, Fairlie says the closures won’t have any impact upon the company’s business: “The affected outlets were small, remotes centres. We have transferred our B2B customers to mobile service or other centres, and have introduced an extra 25 car mobile units.” Furthermore, says the group sales director, ATS Euromaster’s customer mix of 80 per cent B2B and 20 per cent retail makes it unique within the industry. “This is the opposite of our competitors’ situation. They need ‘bricks and mortar’ for retail customers. B2B customers don’t care where the work is done, as long as it is done. Therefore we can go to them rather than them coming to us.”
Peter Fairlie shares that B2B customers prefer a reliable mobile service, and to meet this need ATS Euromaster will focus next year upon telematics and communication systems within its vehicles. “This enables to prearrange an accurate timeslot instead of telling them we’re coming morning or afternoon.” In 2010 the company also intends to increase market share amongst its regional customers through offering them greater flexibility. “A few years ago we tried to centralise,” Fairlie explains. “This constrained some activities, and we couldn’t deliver flexibility and level of service on a local basis. We will now give centre managers more control over regional business.”
Another important development ATS Euromaster plans to roll out in 2010 is the offering of maintenance solutions. This is an area, says Peter Fairlie, where interest from the car fleet sector is growing: “Companies are open to saving money in maintaining vehicles. There is an increasing move towards fast-fit operators, not just for tyres and brakes, but also for service. We are now investing in diagnostic equipment, and will roll this out in our retail and comprehensive centres over the next six months. We’ve already began the process, and are now finalising exactly what tools will be adopted. We have chosen to focus on retail centres first as they service car leasing.”
Presently ATS Euromaster operates 380 centres and a total of 880 mobile service vehicles in the UK, and the company plans to utilise these assets to facilitate further growth in the coming years. As mentioned, the service provider holds a 28 per cent share of FN50 contracts; it intends to increase this to 30 per cent. ATS Euromaster currently services 25 per cent of the large truck fleet sector, and according to Peter Fairlie the intention is to bring this up to 30 per cent over the next three years through focusing on service delivery. Regional truck fleet market share, on the back of the aforementioned improvements, is anticipated to grow from 15 to 20 per cent during the same timeframe. Such growth, notes Fairlie in closing, will occur by adhering to an important company principle: “We genuinely believe it is about managing costs, not just fitting tyres. Today, when costs are critical, it is important to manage a customer’s costs.”