How do you view the changes happening in tyre retailing, and its future course into a digital world?

I was born and raised in the tyre industry. My dad had a wholesale company along with 13 retail locations so I had the opportunity to work on the wholesale and retail side. Retailers have always faced challenges, whether it be size proliferation where you look back 25 to 30 years ago where 80% of the market was dominated by 10 sizes while today 80% market is dominated by 250 plus sizes. That poses challenges that retailers have to manage because it’s not in their domain, it’s all about tyres and sizes and it’s their specialty. 

The biggest challenge that I see retailers being faced with now is the new digital age. It’s out of their comfort zone! They have to rely on marketing themselves through social media platforms and Geofencing. So now retailers have to sit down and think of how they can be different and how can they attract an audience and bring people through the door, rather than how it was before. This is an aspect of the business that is out of their comfort zone. Many do not understand it and have to rely on third party software’s or consultants. The market structure in the US is still predominately driven by independent tyre retailers, where over 65% of the industry is run by ‘Mom and Pop’ shops. Everybody wants to think about the large chains but the bulk of the business is by these independent operators, and they’re competing against these Giants that are trying to gain that customer base. 

What strategies does TGI adopt in the current changing business environment?  

Size proliferation is a big driver and one of the things that benefits companies such as us Tire Group International, is that we are a large wholesaler with large inventories & large warehouses. The reason for that is we have to stock a lot of tyres because retailers no longer have the luxury to stock tyres. They may have financial constraints, space constraints, etc , to be able to stock all the different sizes in order to service whatever car is coming through one of their doors. So, they have to rely on wholesalers like us to offer them a good solid product range. It all depends on the type of consumer coming in. Once that is satisfied then you have to meet the requirement of getting there on a timely manner to get them those tyres.

One of the things that we have been able to do is to increase the service side of our business. It's really been changing our business. It’s not about just providing tyre support. You have to have great customer service having a great relationship with your customers and being able to deliver to them more than three times a day in-order to offer what they call ‘Hot Shot’ delivery, where you get your tyres within 30 to 60 minutes to the retail location. They are heavily relying on that supply chain to be able to satisfy their retail customers.  So as a part of our strategy to bring that all together and meet the needs of today’s market, we have opened up additional smaller distribution centers so we can service regional locations as opposed to having to drive from our main hub to one of our farthest customers almost three hours away. Opening up a location closer to customers has now given us the opportunity to deliver a customer a 30 to 45-minute delivery window rather than having to wait almost a day for delivery. In Latin America which we have invested in, single shop operators and multi branded stores are very prevalent and they rely on fast service and getting tyres to customers in a timely manner and that is something that we will continue to push on.

How much has the pandemic and its impact forced you into bringing in new changes?

The pandemic has taught us many things. Most importantly is has taught us how to lean on our digital platforms and software systems that we’ve been developing over the years. Being forced to use them more and other digital platforms has taught us a lot. Video calling has been a great tool to showcase our product line to dealers from all across. It has definitely opened our eyes to the use of technology and how important it is to have the right technology in the workplace. We felt the first impact of the pandemic when I got a call from our VP of Sales asking if one of our dealers could get a 30-60 stay on his trade receivables as he was being forced to shut down due to having to adhere to CDC guidelines. That was the start. A lot of our customers were asking for more time to sort out and figure out what was really going to happen. The pandemic was affecting all of us and this solidarity came out from everyone. People were very accommodating and understood the situation.

Surprisingly consumer demand never dropped off. For most, if you had a job, you continued to have your revenue stream coming in, but you didn’t go out to eat 2-3 times a week, you weren’t spending money on gas, on a vacation, or going out. You had to stay at home, and this led to consumers having more spending power and wanting to travel locally. Rather than air travel, people started opting for more road trips and so tyre purchases which may have been a faraway thought, now became a front and center and customers had the discretionary income for it.

Manufacturing plants were shutting down but consumer demand never dropped. These plants tried to come back but with workers going back to their hometowns and not being able to travel back, there was suddenly this supply gap in the industry that started to drive the price up but demand kept increasing. Everyone thought that consumers were not going to buy tyres or spend much on them but it was the complete opposite. Even today demand is extremely strong and supply has not caught up with it. Over the last couple of years, we have seen retailers go thought a price decline, but with the market demand increasing they are going through a price incline which is good.

What is your take on online retailing? What are its advantages as well as disadvantages?

We divide our business into many units and the online retail sector is one that has taken off in the last 3-4 years. It is the wave of the future as more and more things become automated and we adopt a ‘buying everything online’ type of world. The challenge with tyres is, you cannot just click and get them to your house, but you have to get them installed. That creates the challenge which people are trying to meet, whereby coupling the service of buying online with mobile service via appointments to get the tyres fitted. These are the challenges faced in the online sector but it is by far the largest growing sector. The online space is the first place where customers go to find out when they should buy a new tyre, what size they need and see what their options are. The challenge is, how do you put your product in front of a consumer or how can you get that consumer into your virtual door. We service a lot of B2B platforms where customers can place their orders and we ship those orders directly to the consumer. We started doing this in 2017 and this has grown by over 400% year over year.

What are the challenges in retailing multi-brand products?

Back in the days there were only single branded tyre retailers because at that time there were only limited tyre sizes. But now with so many tyres sizes available in a particular spectrum, even if you wanted to be a single brand retailer, you wouldn’t have all the tyre sizes that you would need to be able to service every consumer’s needs. This forces you to become a multi brand outlet. It has its own challenges. No particular tyre can be branded as the best as it’s a subjective decision and so as a retailer it depends on how you are going to market it. We as a retailer need to understand what are our objectives. How we tier our products in our portfolio matter.

Which segment of tyres is more in demand than others?

In the US market, with the new import restrictions and import duties on tyres from certain countries, the biggest challenge has come in the passenger and light truck segment. Tyres which were imported and that were once available at a certain price point are now more expensive because of the cost of the duties to import them. It is estimated that with the new duties imposed on tyres imported from Taiwan alone, there is about two and a half percent of the market share of the US that is now priced out of the market. So now there is a tremendous supply gap in the passenger and light truck segment because of this new import law and the duties that have been imposed. This also works as an opportunity for those who have inventory to increase the price a bit. Passenger and light truck segment is where the demand is more but trying to secure product for that segment is now a challenge.

Do customers demand any specific features for the tyres they seek?

For the vast majority of our consumers, the main question in their mind is pricing. The second question is how good is your cheapest tyre. It’s always a mental game of price for quality. Most consumers don’t know a lot about tyres, and most of the time, the lower priced tyres are from brands that they’ve never heard off. Consumers put a lot of trust in the retailer as far as quality vs price go. From a retail side, bridging the gap from price to quality as in safety,is crucial. On the wholesale side, it’s very different. We wholesale and buy tyres on the open market and that’s where competition comes in. Profit margins and pricing plays a big part, bridging the gap between the cost, quality, exclusivity make a difference.

For the most part, general consumers don’t ask for specifics about a particular tyre, like the kind of grip or longevity it offers. But you get specific consumers who are performance oriented. An educated consumers will ask more questions about the benefits each tyre brings. Top US publications in the US ran a survey last year and about less than 20% of the consumers we get come in well informed and are looking for specific features. As per a survey done here in the USA, 80% of the time, a consumer walking in to a retail tyre shop, will buy a tyre that the counter person recommends. Customers also look at what tyre they have already on their car, and feel that those tyres served them well, but according to the survey, customers only left buying the same brand of tyres 30% of the time. 70% of the time, customers bought the tyre that the counter person recommended. So there’s a lot of power in what the counter person recommends.

What is your take on tyre manufacturers doing their own retailing? Does that affect your business?

The first here in the US to get into that was Michelin. They developed their own online platform and then Goodyear and a lot of the Tier1 manufacturers followed. But some have taken a step back. The channel disruption it was creating was more a drag on their business than a benefit. They did create a MAP pricing (Manufacturers Authorised Price). This way they wanted to make sure that their tyres were being sold at the same price across platforms and dealerships. But by setting a ceiling price on a tyre, you’re also setting a ceiling on how much a shop or tyre channel can make. Whereas if I’m selling an in-expensive brand of tyre, I can buy at my cost point and the retailer can sell it at their cost point where both make a profit margin.

There are a lot of dynamics at play. The younger the consumer becomes, when they start buying tyres, the more they’re going to look for online purchasing. The challenge is a retailer’s consumer is becoming younger and becoming more fleet driven with the likes of Uber, Lyft, etc. These fleet buisnesses are becoming more of our consumer base than an individual car owner. The old ways of going to a tyre shop and talking to the guy, having a cup of coffee and talking about tyres is over, the younger generation of buyers want to buy everything online. This is where online providers are trying to bridge the gap between product and service, as you need specialized service as far as tyres go. Automated tyre installation bays is being worked on and I think that will be the future. (TT)

As part of a strategic effort to increase its presence in the region's premium original equipment (OE) market, Kumho Tire has confirmed its plans to establish its first tyre production facility in Europe by 2027.

The company has shortlisted Poland, Serbia and Portugal as possible locations for the plant, which is projected to need an investment of more than KRW1 trillion (USD 705 million). The decision is closely linked to Kumho’s ambition to strengthen its partnerships with European automakers and was revealed by Kumho Tire CEO during the South Korean premiere of Kumho's new Ecsta Sport tyre line.

Kumho has recently secured OE supply contracts with major brands such as Mercedes-Benz, BMW and Volkswagen Group. At the moment, Kumho runs eight tyre production plants in China, Vietnam, South Korea and the US. Its capacity to compete in the premium OE market, however, has come to be perceived as being constrained by the absence of a European production base. Through the benefits of local production, the new facility will improve response to European client requests, save freight costs and shorten delivery times, all of which will strengthen the company's partnerships.

Sentury Tire USA has opened pre-enrolment for its two associate dealer programmes (ADPs), the Delinte HYPERDRIVE Associate Dealer Program and the Landsail Elyte Associate Dealer Program, underscoring the company’s commitment to rewarding dedication and partnership to the Landsail and Delinte brands.

The ADPs, which are customised for each brand and intended to encourage dealers, will formally start on 1 June 2025. Both programmes give dealers access to special benefits, incentives and strong tools to help them expand their businesses. This involves dependable customer service, effective marketing and worthwhile financial incentives to promote dealers' success at every stage.

Beginning in Q3, dealers may earn up to USD three per tyre through the Delinte HYPERDRIVE Associate Dealer Program. Dealers can receive retroactive benefits for purchases completed in Q2 if they register before 1 June. The awards are available for all Delinte PTR, LTR and the new DV3 LMD AS last-mile delivery tyres. For all Landsail PTR and LTR tyres, independent dealers that sign up for the Landsail Elyte Associate Dealer Program can also earn up to USD three per tyre. For customers who sign up by June 1, the new LMD 100 AS last-mile delivery is also eligible for the benefits and will get the same early bird incentive for Q2 2025.

No initial order is necessary. Dealers only need to register to begin making money. According to the monthly programme rewards structure, 48 tyre purchases each month are eligible for a reward of USD one per tyre, 120 tyres are eligible for a reward of USD two per tyre and 240 or more tyres are eligible for a reward of USD three per tyre.

ENSO, a London-based tyre manufacturer engaged in the production of sustainable tyres specially designed for electric vehicles (EVs), has launched its new ENSO Premium range of EV-specific ultra-high-performance (UHP) tyres aimed at drivers of high-performance EVs such as the Tesla Model 3 and Model Y.

Specifically designed for electric passenger vehicles, the ENSO Premium range comes with A/A EU-label ratings for both energy efficiency and wet grip. The tyres are designed to provide safety, increased range and a reduced total cost of ownership. Conventional tyre designs frequently fall short of the special performance needs of electric vehicles, which include greater vehicle weight, regenerative braking and higher torque loads. By lowering tyre wear and rolling resistance, ENSO Premium takes care of these issues.

The company is an authorised provider of replacement tyres for LEVC's electric taxis and has partnered with Uber to install its tyres in high-mileage metropolitan areas. The company now plans to grow throughout Europe and North America, and with ENSO Premium, it is now offering its services to individual EV owners throughout the United Kingdom. According to ENSO, the range offers advantages including longer tyre life and fewer replacements, lower energy usage, fewer charging stops and lower CO₂ emissions and tyre particle pollution.

Gunnlaugur Erlendsson, CEO and Co-Founder, ENSO, said, “We’re plugging a long-standing gap in the tyre market by offering EV drivers a purpose-built, affordable, premium EV tyre alternative that matches the innovation of their EV.”

Kraton Corporation, a leading global sustainable producer of specialty polymers and high-value bio-based products derived from pine wood pulping co-products, has announced a general price hike in North America for its SBS, SIS and HSBC product lines with effect from 1 May 2025.

Following a careful analysis of the effects of recently implemented tariffs, related cost increases and a conclusion that the company cannot independently absorb these repercussions, Kraton is adopting these pricing hikes, according to a company statement. The company further said that it will keep an eye on the scene and reassess these measures promptly in the event that conditions and US import tariffs alter.