The 2006 Autosport/Aftermarket Show confirmed its position as the largest dedicated motorsport exhibition in Europe with 94,000 visitors in total. According to the organisers, 27,000 of these were trade visitors, an 8 per cent increase on 2004.
Blackcircles.com is aiming to turn 700 independent garages across the UK into franchisees. And what’s more, managing director, Mike Welch, has a five-year plan to capture 10 per cent of the market and plans to enter Europe in 2006.
Blackcircles.com is something of dotcom success story. Founded in 2001 when Mr Welch was 23, the company currently operates a network of 987 independent garages serving consumers from “Thurso to Truro.” Next the 27-year-old managing director is aiming to capitalise on this position by turning 700 of the garages into branded franchisees, making local independent garages into outlets linked to Blackcircles’ ordering and stock checking systems.
Whether you like it or not, the world is turning more and more into a technological marketplace. And all aspects of business are being affected, including the tyre trade. Here Tyres & Accessories looks at two of the Internet’s best-known names, and asks how their businesses might affect yours.
According to the Office of National Statistics, by the end of 2004, 52 per cent of households in the UK had access to the Internet at home. And by the end of 2005, 99.6 per cent of the UK will have access to broadband if they want it. Furthermore, the Internet was the fastest growing retail sector last year, attracting one in four shoppers.
Auto Express’ decision to make its recent tyre tests their “biggest ever” goes some way towards demonstrating the increasing interest surrounding these reports. And with so many brands on the market all claiming to be the best at something, who can blame consumers for wanting a second opinion?
However, Auto Express is not alone when it comes to testing. Other well-known magazines including Which? Autocar and Evo also publish tyre test results. But in terms of coverage and frequency Auto Express’ tyre tests currently lead the way in the UK. And when you consider that that this particular publication is Britain’s biggest selling motoring weekly, it is clear that winning or being recommended by such a report can have very positive repercussions on the tyre business.
Relatively unknown brands particularly have a lot to gain. By winning or being recommended in tests, these companies stand to gain a leg up in the estimation the country’s motoring millions, without investing in publicity or marketing campaigns. The theory is that product quality will speak for itself.
Since John McNaught took over at Bridgestone UK there have been a number of changes including some high profile acquisitions in the commercial vehicle sector. But in general the developments of the last few years can be summed up in one word, growth.
It has been a “phenomenally busy period,” John McNaught told Tyres & Accessories at the company’s Warwick, headquarters. “Bridgestone is in a very high period of growth and for all our staff it is a tremendously busy and rewarding time,” said Mr McNaught explaining that this is part of a long-term plan developed in conjunction with the company’s European management based in Brussels. John McNaught praised the efforts of all his team and highlighted the fact that the company has been awarded the prestigious Investors in People award.
CVC Capital Partners has sold Kwik-Fit to French private equity firm PAI for £800 million. The news follows months of speculation including suggestions that a Bridgestone/Mitsubishi joint venture was pulling out in front when it came to bidding for the UK’s largest fast-fit chain. Bloomberg reports that PAI plans to open more fast fit retail outlets as a result of the acquisition.
Bridgestone UK Ltd has acquired Bulldog Remoulds (Holdings) Ltd, the companies have announced in a joint statement. The deal is said to have been the subject of discussion for “some time.” Both parties agreed that the pricetag attached to the purchase would remain “commercially confidential.”
The purchase took effect on 29 April and will not affect existing trading arrangements with Bulldog customers and suppliers, the companies have confirmed. Bridgestone says the acquisition will strengthen its long-term capability to look after and expand its Truck Fleet customers within the UK.
It would be something of an understatement to say that high raw material costs, the weak dollar and unprecedented competition from the Far East is affecting UK alloy wheel manufacturing. But, in the cases of the selection of companies that Tyres & Accessories spoke to, it is more a question of ingenuity triumphing over adversity. So, in the face of such pressing circumstances, how are UK manufacturers holding firm? Work smarter, not necessarily harder, they say.
The AA has announced that it intends to close AA Tyre Fit, which currently provides a national mobile tyre fitting through a fleet of 130 vehicles, and its Vehicle Inspections business, currently offering inspections on used cars for consumers. According to the company, both businesses have been operating at a loss.
Vredestein: Two years with Bert Stellinga at the helm in the UK
Bert Stellinga has now been installed at Vredesteins Wellingborough UK headquarters for two years. In that time Vredestein have launched new high performance tyres and taken steps to develop the brand awareness in the enthusiasts market in the UK, whilst at the same time developing their share of the agricultural tyre market. It has very much been steady as she goes for the Dutch tyre manufacturer.
Bert Stellinga told T&A that the UK is a major market for Vredestein and that progress was being made in both the UK and the Irish markets. However, to get a better picture of the company it was important to understand the wider position of Vredestein as an organisation.
2003 saw Vredesteins year on year sales on the increase and the company managed to record a profit, very close to that earned in 2002. During the year there was also a stock reduction exercise which released funds and made the whole business more profitable. The fact that Vredestein is making a profit, says Stellinga, enables the company to invest in people and product, to develop new services. For instance, in some markets in the European Union we have our new Internet Ordering facility in place. This allows customers to access stock records, place orders and arrange delivery on line, at their convenience. The strength of being in profit also allows us to develop our marketing with advertising and of course attendance at events such as the Autosport International Exhibition.
One of the biggest developments for the company last year was the return to private ownership. Having removed the obligation to the shareholders that put the company in a position where it could increase its flexibility and invest in research and development. At present we are in a transitional period but the move will have positive consequences in the future. This will be seen in the investment in new lines this year with a new winter tyre arriving later in 2004.
One question that arises about Vredestein is its ability to stand alone. Other smaller manufacturers are working together with off-take agreements to fill capacity, or enable ranges to be extended. There is a deal of technology exchange and shared product development. As an independent, manufacturer can Vredestein continue to develop its own products as a stand alone business?
Vredestein is very much a self contained operation and I dont think that we would envisage such close co-operation with competitors. Our own R&D facility swallows a considerable element of the finance budget but we need to develop products that the market appreciates and wants. We produce niche products that appeal to specialised markets – Sportrac and Ultrac are the only designer tyres in the world and our cooperation with Giugiaro Design is proving to be very successful, for instance. We do not need vast volumes because we are selling premium quality products where we can maintain good prices for everyone in the chain. We do not deal with OE in passenger car tyres, so we can survive on our limited capacity. Our OE market is strictly agricultural and again, we offer a premium brand tyre to a specialised market, says Bert Stellinga. We are determined to go it alone and I cant see any reason why we shouldnt.
Goodyear Dunlop has been chosen as tyre supplier to UK police forces for the next three years. Goodyear first secured the contract in 1994 and the new deal means that around 100,000 Goodyear and Dunlop tyres will be fitted to police cars, vans and motorbikes for each of the next three years.
It was in August last year that Tim Parker (48) was named as the new Chief Executive Officer of Kwik-Fit, following the purchase of the company from Ford by CVC Capital Partners for a reported £330 million.
Ashley Croft, previously Managing Director of Stapletons Tyre Services until October of last year, has joined Micheldever Tyre Services (MTS) as Director. His prime responsibilities at Micheldever will be the Wholesale and Logistics development of the business.
Kirkby Tyres is a major wholesaler in the agricultural sector and is increasingly turning towards that market to develop its business. Kirkby Tyres has been around for a long time, almost 50 years in fact. In that time the business has seen many changes but through all the changes it remains in the hands of the Rosenthal family, with Gordon Rosenthal, grandson of the founder Joe Rose at the helm.The company started as a casings collector and dealer, before developing into wholesaling. When the wholesaling of new tyres outgrew the casing side, the company made the decision to concentrate on new tyre distribution. Gordon Rosenthal took over from his father, Leslie Rosenthal, as Managing Director in 1980. Gordon is now Chairman, with Dave Dorrity joining the company in 1999 as Managing Director.Kirkby Tyres operates with three depots to cover the British Isles. The head office is at Liverpool and there is a depot in Perth, Scotland which offers a very similar stock profile to that in Liverpool, though the demand for high performance and premium car tyres is stronger north of the border. Ireland is covered from Dublin by Kirkby Tyres (Ireland) Ltd and in addition to the full range offered in the UK is the Irish agent for Ohtsu/Falken, and is the sole distributor of Wolfrace and Smiths alloy wheels in Ireland. The Group has a turnover in excess of 16 million pounds and employs 61 staff. It is worth noting that the breakdown of the business puts the agricultural sector at 45 per cent of the Groups turnover, truck at 35 per cent, and car and earthmover at five per cent each.
When Ian Wilson retires from his post of managing director of Vredestein UK at the end of March, he will be replaced by Bert Stellinga who has been with the company since 1994 and is currently the companys export manager. Bert will take up the post on 1 April.