It is now official: In a MBO, the retail chain NTS and the wholesaler Viking International, have been sold to their top executives. Although neither side wishes to comment on the price, it is now common knowledge that the price is more likely to be 40 million Euro than 50 million Euro. At the end of the 80s the Continental group bought the chain from Michelin for 140 million pounds Sterling because the Monopolies and Mergers Commission signalled that it would not accept the total acquisition by the French company. Continental managers are convinced that the details of the sale will ensure further co-operation with the new owners. Continental is convinced that it will consolidate, or even improve its current position in Great Britain through co-operation with the now independent retailer NTS, under the umbrella of the now named Axle Group.
US company Bridgestone/Firestone Inc. has announced a new corporate structure from Dec. 1st. The reorganised company will be known as Bridgestone/Firestone Americas Holding Inc (BFAH), which will be the holding company for a number of subsidiaries. John Lampe will be CEO and president of BFAH. The change has been made to take advantage of better financing rates and to re-focus on core businesses.
Bridgestone/Firestone Inc. has acquired a majority shareholding in Morgan Tire & Auto. This equity has, after it purchased rival Tire Plus Limited in the summer of last year, more than 550 depots in 24 states of the USA and was second biggest independent equity in the USA, referred to as a “retail-powerhouse”. Turnover of Morgan Tire & Auto exceeds 800 million Euro. Larry Morgan, who began his career as an employee of Firestone, remains CEO. The acquisition is a clear sign that, despite the Firestone recall disaster in the USA, the tyre manufacturer intends to stay in the market with the Firestone brand.
This year’s meeting of the German co-operation of independent tyre dealers under the umbrella of the retail brand “premio” had as its motto “time for take off”. Round about 125 outlets are members, with only a few having more than one service station. The downside of the premio network is that the “brand premio” is not well-known among end users. One reason for this is the fact that the chain is relatively young, about five years old. Of course a brand would be more popular if it were spread all over the country or – as service provider Goodyear would say – if more stations are on the net. But the premio managers are realistic, and it is not possible to grow by leaps and bounds. The competitors among the other groups of tyre dealers have restricted the market. And of course sometimes a member leaves the group after selling his business. Premio is part of the controlled distribution network of Goodyear in Germany which today covers round about 600 outlets. Premio wants one day to be what the group managers call the “lighthouse of the market”. Because the quantity targets have to be limited, Premio wants to be the best in terms of quality. In all criteria of an independent customer satisfaction analysis Premio performed better and even much better than the competitors – in all but two aspects, that is and these two were brand awareness and prices for endusers. It is hard to become the best in the market, but it is also hard to stay the best. How does it work? The best way is to continue to improve and optimise the modules of the system which the Premio Centre in the Goodyear headquarters makes available for the members. They not only try to develop new modules but also have to decide whether some of the older modules are no longer relevant. With more than 50 (!) modules the Premio offer is a leading player; taking just one of the modules available, the new software solution for the tyre trade called “tiresoft II” may well be the most modern in the market.
Continental has ended its co-operation with Autobytel Europe. The tyre manufacturer had intended to invest 15 million Euro in retail sales via the Internet. The company has revised plans and is eschewing B2C activities to concentrate on B2B developments. Swedish customers in the test market can already access the tyre module from car broker Autobytel.
Someone who acquires a seat at the top, and even reaches the CEO position at Continental, will neither be fired nor will he just quit. There is what is called “a separation on friendly terms”. The question whether Kessel and von Grünberg could ever have been friends is not even relevant. Whoever thinks that von Grünberg just shrugged and happily retired to some comptroller’s position will find out that he was wrong. Von Grünberg is the type of man who may occasionally loosen the handcuffs, writes a German daily newspaper, but he also tightens them again. His thumb pointed downwards, and that gesture determined Kessel’s future, and the whole board went along, including the banker Weiss.
In the UK, wholesaler Stapleton’s Tyre Services has announced that it is to invest two million Pounds in an internet-linked network of service outlets, called Tyreserve, aimed at the car fleet market. Stapleton’s retail division (50 outlets) will be the first member and Tyreserve will begin trading next April. The new move has the full backing of Itochu, Stapleton’s parent company.
SmarTire Systems, the tyre pressure monitoring equipment supplier, has launched the US distribution of its new aftermarket products through the Tire Rack and Big O Tires. SmarTire CEO, Robert Rudman says, “These orders follow our initial distribution in Europe and represent the beginning of our marketing strategy for SmarTire’s aftermarket products in North America.”
The tyre tests appear normally twice a year in spring and in autumn. Millions of people at least notice them, and among these many even study them very intensively. The topic discussed here is the tyre tests which appear regularly every year in the big end consumer-oriented automotive magazines in Germany. Their judgement has a significant impact on the consumers. The tyre manufacturers know this for a fact and promote positive test results in their advertising campaigns. A note as “very recommendable”, for example, serves as a kind of award, which has a strong convincing effect in the tyre retail shop. However, if the product fails in all important magazines the result will be the opposite and the whole thing can end in disaster. Tyre manufacturers fear these situations, specially when they have introduced a new product to the market. Tyre retailers use positive test results often as an additional argument in a sales discussion with the customer. There is just one small problem: the exact influence of tyre tests on sales in the retail shops – in the sense of knowing the precise percentage of customers who buy a special tyre just because of the test result – is very difficult to measure. But there are some qualitative characteristics of tests that can be found out without problems:Tyre tests have a different relevance and coverage. The effect of tyre tests on customers is of a limited time – especially in the winter-season. The sell-in of the retailer is just as influenced indirectly (backwards) by tyre tests. Experiences from the previous tests play a role. The influence of winter tyre-tests is regarded as much higher than those of summer tyre tests by retailers and customers. Tyre tests have an effect on a certain segment of customers: people who are already concerned about the problem of safety.
Manfred Wennemer, management board chairman of Continental AG, is reported to have said that the company expects to sell its UK equity chain National Tyre Service by the end of this year. Earlier this year, Continental UK closed National’s truck tyre operations when it formed ContiNetwork; a partnership with independent truck tyre service providers. This left 210 retail outlets in the National chain. A spokesman in Hanover confirmed Mr. Wennemer’s comment, but would not reveal any further details. The news was only revealed because Continental had to enter a figure into the fourth quarter accounts which was picked up by analysts.
NBGI Private Equity, a fund focusing on traditional economy companies, has bought 41 Lex Autocentres from Lex Service PLC. They will be rebranded as Nationwide Autocentres and will offer high quality, fixed price servicing for retail and fleet customers. Further acquisitions are expected and Tom Dunn, formerly operations director at Lex Autocentres, has been appointed managing director of National Autocentres. The newly established Nationwide Autocentres network announced that the firm's focus would be on MoT testing and general maintenance for both the retail and fleet sector. However, they also had plans for future development and were piloting additional services to cover air conditioning, GPS tracking and LPG conversions.
Nokian Tyres has purchased the 13-outlet tyre chain of Dackaffaren for the sum of 4.3 million Euro. Dackaffaren had a turnover of 110 million Swedish Crowns (11.5 million Euro) last year and employs 70 staff. The company will be incorporated into Nokian’s Vianor tyre retail chain, which now consists of 50 outlets in Sweden and a total of 170 outlets in five countries. Kim Gran, Nokian’s President and CEO, says that the acquisition completes the company’s coverage in Sweden.
Michelin North America has selected Modern Media, a e-retail software specialist to develop its B2C initiative in North America. Michelin North America Inc’s Debra Track said, “Modern Media will help us create a platform that will allow us to go after a new generation of consumers that don’t necessarily use traditional media in their shopping habits”. The value of the deal has not been disclosed.
Nokian has released interim financial figures for the first nine months of this year. These show an increase in net sales of 7.4 per cent to 277.7 m Euro and an operating profit of 25.3 m Euro (11.9 m Euro for the same period last year). Net profit reached 9.1 m Euro (2.7 m in 2000). Nokian’s target for the year is to achieve a sales growth of around 10 per cent and improve on last year’s profitability.
Cooper-Avon Tyres has reshuffled many of its management team. André Korynevsky – responsible until now for retreading materials – has been appointed European Sales Director, liaising with the company’s offices in Germany, France and Switzerland. He will continue to manage the retread materials business. Phil Caris is the new European Sales & Marketing Director with responsibility for multi-brand strategies, coordinating global product management. As European Major Accounts Director, Steve Cundy will head a team of three, which will service the business with European retail chains, marketing Avon house and private brands, as well as developing fleet business.