For every business there are items that you can hold in stock and you can sell them at any time. Tyres, wheels, exhausts, batteries, all can be sold off the shelf. If you don’t sell them today you can sell them tomorrow. For some businesses their stock in trade is time. The hotel trade doesn’t sell rooms, it sells time. The rooms will always be there, but they are each allocated time which they sell. The problem with selling time is that you can only sell it once. The fast fit operator – indeed any garage operator – has the same difficulty which we call ramp time. Fast fits may not actually sell the ramp time, but every minute the ramps are not occupied by vehicles undergoing profitable work the option to sell work on that ramp is vanishing down the plughole of time. Most service managers recognise this and try to minimise the time vehicles spend on the ramps. Buyers will ensure that the exhausts they buy have a problem-free fitting procedure. In the efficient garage, time management is everything. However, even with the best time management of jobs there is, for many depots, the point where the work being done fails to fill all the available time.There can be three outcomes to this. The first, and most likely, is that the time allocated to the job is stretched to fill the time available. We all recognise the scenario – we take our car to the garage for a repair – the garage is devoid of customers, four mechanics sit reading the newspaper – it takes all day to do the job. On another day we arrive and the cars are lined up outside the doors. The same job is done in an hour. The second outcome is that the jobs are carried out as efficiently as possible and the ramps lie ready for their next customer. This may well be a better practice than the first, but it doesn’t sell the time when the ramps are not in use. The third option is to find another profit centre which will see the ramps in use.Since we are in the wheel and tyre business there is a tendency to keep the business revolving around the four corners of the car – brakes and shock absorbers are the most popular additional parts’ areas for fast fits. Skill levels required are relatively low, so labour costs remain low. The parts are often, though not always, fast fit. Pull off the old and fit the new. Some have dabbled in so-called fast fit clutch operations – but fast fit is all relative. If someone drives in with a Ford Mondeo or a Transit and asks for a fast fit clutch they may think your fast fit description is stretching the realms of credibility. Further, your mechanic’s time with the vehicle on the ramps – possibly special ramps – ties that bay up and, again, you can only sell your time once.There are, of course, other options; basic servicing is only a short step from fast fit work, though your reputation depends upon the skills of your mechanics. Can you afford to pay a mechanic rate to someone who may spend most of his time as a tyre fitter? MoT bays are yet another option. Both MoT bays and service operations can be used to open doors to enhanced tyre, exhaust, and accessory sales. However, there is one profit centre which may well be worth considering as a development to ensure those ramps are never left empty.As one commentator told T&A, “without diagnostics all the service garages are going to be left with are tyres and exhausts.” That statement should send shivers down the spine of every fast fit operator in the country. If the service garages are being forced to move into tyres and exhausts in a big way in order to retain their revenue, that must ultimately have a detrimental effect on the wellbeing of the fast fit depot – dragging revenues down.
The disastrous sales of winter tyres in Germany at the end of last year have shown at least one thing: hope has no place in the calculations of business administration, and whoever has not yet understood that will have no future in this business. All the hand wringing of the tyre retailers does not help in this situation. Considering declining gross yields and the many new distribution channels for tyres, tyre retailers are forced to diversify and widen their service offers in order to compensate for loss of profit. One example of how this can be achieved is car servicing, which brings in gross yields between 40 and 50 per cent on average. A lot of business members have long ago realised this fact and extended their range of service offers. So car servicing is no longer a question of “if” but of “how”. The differences between the service offers and the quality of tyre retailers engaged in car servicing are huge. They range from the traditional Fast-Fit-Sector, covering the classical elements (exhausts, brakes and shock absorbers) to the fully equipped and professional working car repair station, offering every kind of car servicing. In this issue of NEUE REIFENZEITUNG the present level of involvement of German tyre retailers in the car servicing business will be explained and described, including some examples.
Aftermarket wholesaler SDL, which went into Receivership when parent company Finelist collapsed recently, has been purchased by Belgian exhaust manufacturer, Bosal Group. SDL was one of the biggest customers of Bosal UK and the acquisition ensures continuity of supply of Bosal exhausts, catalytic converters and other accessories to the UK aftermarket. No details about the terms of the deal was revealed.
Pit Stop, the fast-fit group belonging to Kwik-Fit (and thus, ultimately, Ford) is pushing ahead with plans to open up to 400 centres in Germany within the next two years. Pit Stop focuses on exhausts, brakes, shock absorbers, etc., as well as selling tyres.
Bosal has been named as a General Motors “Supplier of the Year” for its superior performance in quality, service, technology and price. 165 suppliers from 19 countries were named in total, and this is the fifth time that Bosal has won the award. The company supplies exhausts for a number of GM vehicles.
In the 80s and 90s a lot of tyre dealers invested in auto service knowing that there were limits: without employing a master mechanic for car repairs, certain works are not allowed to be carried out. But many dealers cared for the qualifications of their employees, sent them on courses in order to get the permission to do the typical works that car service stations normally do. Some tyre dealers were on their way to making a success of auto servicing. But there are also examples of diversification going in the wrong direction. Some fields were portrayed to tyre dealers as being the business of the future but which failed later: Steering wheels? The airbag killed this business. Batteries? Today most are maintenance-free. Exhausts? Better quality steel has led to better rust-proofing. Numbers of car services will decrease over the next few years, meaning that tyre dealers, independent car repair stations and licensed car dealers will have to fight much harder for the customer than they do today. Generalists, who attempt to do all the work around the car, will have to invest a lot of money in their outlets. Specialists – for example in tyres – can recommend themselves to the customers with their special services and products whereas car service stations might be overstretched regarding an increasingly complicated tyre business because of the progress in electronics, such as tyre pressure warning system. Easy solutions are not available. But it is dangerous to follow each trend of diversification, to invest a lot of money merely in order to realise one day that you have built up a new service in a specific auto part, only for the demand to wane and another part comes into focus. However, in twenty years’ time cars will still need tyres, and who will replace the defective tyres if not a tyre dealer?
Tenneco Automotive is spending one million Pounds (1.6 m Euro) on a refurbishment programme at its Walker exhaust manufacturing factory at Tyseley, Birmingham in the UK. The investment will improve flexibility and reduce downtime between manufacturing different products. The factory produces two million exhausts a year.
The car fleet market varies from country to country across Europe, but in countries such as Germany and the UK, it is an important percentage of the car market. Increasingly, the owner of the car fleet is paying a fleet management company to maintain the cars and carry out maintenance, tyre replacements and so on. Many leasing companies expect to expand on a pan-European basis, which means that, increasingly, the service provider has to have continent-wide coverage. In the UK, the market leader in this field is Kwik-Fit Fleet, followed by ATS Euromaster, FTM Tyrefit (an affiliation of independent retailers, giving nationwide coverage and which has linked up with point S for coverage on mainland Europe) and National Tyres & Autocare. All these have operations outside the UK. It is easy to see the attraction of the fleet market – it is estimated that sales of tyres, batteries and exhausts to this sector are worth £180 million in the UK alone – and for the tyre manufacturers, it is strategically important as a means of increasing market share. The fleet customer is extremely demanding; not only in terms of service, but also in management reports and information, so the fleet service provider has to be much more than a mere tyre supplier. The market is very competitive and the motto of the provider is ‘service, service, service’. The attitude is summed up by Simon Roper, Managing Director of Kwik-Fit Fleet, who says, “Nobody takes tomorrow’s business for granted.”
Authorised VW dealers will integrate a fast fit service in Germany under the name “Car Center” by the end of 2001 open to all car brands. Besides brakes, exhausts and shock absorbers the offer will also include accessories like alloy wheels.
In this year Mercedes wants to establish a so-called “Express-Service” covering the range from exhausts to brakes. Within one hour customers utilising this special service are assumed to be on the road again.