Point S snubs Michelin in France
The point-S organisation has made the headlines again. Following the dismissal of point S Germany’s managing director Jürgen Benz last December, a move that took many by surprise, point S France now appears to have interesting times ahead as it distances itself from the most important player in the nation’s tyre market: Michelin. French media sources report a “thunderclap in the tyre world,” in which point S in France has failed to reach a consensus with Michelin regarding terms and conditions for the coming year and as a result has excluded tyres sourced directly from the market leader from its range. Michelin reportedly accounted for at least 40 per cent of the point S operation in France’s total turnover, thus market observers view the organisation’s decision as quite a dangerous one. But where exactly lies the danger?
Along with this action, company managing director Christophe Rollet has also called upon all point S dealers in France – 280 independent dealers operating a total of 430 outlets – to join in this strategy of Michelin avoidance. In other words, Rollet is seeking support for a boycott of Michelin. Naturally the managing director realises it is also possible for point S dealers to source Michelin tyres through wholesalers and through the company’s own “point S24” B2B platform. “But I hope that members will play along with this as the conditions proposed by Michelin were not acceptable,” Rollet was quoted as saying. “The royalties suggested were too small and our requests too important.”
Roller estimates that sales of Michelin products through French point S dealers during 2012 will be 30 to 50 per cent lower than last year. This translates to a potential 20 per cent drop in revenue for dealers should they participate in the proposed boycott. The managing director says point S is “not angry” with the tyre maker, however “you need to understand that nobody can simply dictate their terms to point S.”
Now point S France can only offer its partners two premium segment brands: Goodyear and Bridgestone. While the Matador (Continental) and Debica (Goodyear) brands are offered for the mid-range segment, in the budget segment dealers can only buy the Summerstar/Winterstar brand (manufactured by Continental) tyres via their national network. During the course of this year more than a million of these private brand tyres are expected to be sold throughout Europe.