A frank talk about strategies with Continental’s Andreas Gerstenberger
In case you haven't noticed, Continental Tire North America Inc.'s General and Continental product lines have been going through some almost revolutionary changes over the last two years.
On the General brand side, the Exclaim UHP and Grabber UHP were introduced to fill a niche in both the passenger and light truck tire market segments, respectively. The Altimax powerline, introduced at the SEMA Show, officially will be launched in April; it is expected to satisfy all-season demand in the high performance (Altimax HP) and broad-line (Altimax RT) segments.
The General Altimax Arctic winter tire, unveiled this week in Big Sky, Mont., completes the overhaul of the General passenger tire line. No doubt the next generation of the Exclaim UHP will join the Altimax family.
On the Continental brand side, the new ContiSportContact 3, which will replace the ContiSportContact 2 over time, and the ContiProContact will continue to evolve. Marketed as the company's flagship passenger tire lines, they will add new sizes of their own in 2007, and more than 100 over the next three years.
The additions -- and some subtractions -- are all part of a strategic plan to revitalize the General brand and position the Continental brand where it belongs, says Andreas Gerstenberger, executive vice president of sales and marketing for Continental Tire's P/LT replacement tire business unit.
Modern Tire Dealer sat down with Gerstenberger in Big Sky to discuss the plan in more detail.
MTD: Please explain the importance of your "platform strategy," which you have alluded to in the past, to your General brand overhaul.
Gerstenberger: Our platform strategy works almost like it does in the automotive industry. For example, the Mercedes E-Class and the Chrysler 300M share the same platform. It's the same with the Mazda 6 and Ford Fusion, or the Porsche Cayenne and the Volkswagen Touareg. Although these vehicles share a platform, they have different performance characteristics to satisfy different consumer needs or demands.
We will use similar green tires throughout our Altimax HP, RT and Exclaim UHP lines. It will reduce complexity in manufacturing and research and development, which has two main effects: It reduces costs and gives you faster time-to-market because you use fewer compounds and parts in order to accomplish the same goal. We haven't done that extensively in the past, at least in the United States.
MTD: What is your overall consumer tire strategy in the short-term?
Gerstenberger: We are introducing 500-plus SKUs in our replacement and OE lineup in the next three years. That includes Continental, General and our proprietary brands. The majority of the new products will be General tires. We also will take out old SKUs and old lines, obviously.
The General Altimax HP and RT will be pure replacement tires. They will be available in 68 sizes ranging from 13 to 18 inches. Altimax will replace the GS60, the G4S and the Exclaim -– not the Exclaim UHP. In the ultra-high performance segment, the Exclaim UHP will double its current size offering with sizes up to 24 inches.
If everything runs well, by the end of 2007 our General brand passenger tire set-up will be very streamlined. There will be nothing "general" about it! Then we will work on the light truck side.
MTD: Have you been at a competitive disadvantage in the North American market without a strong two-brand strategy?
Gerstenberger: We needed two brands. The U.S. market is different than the European market. Americans like a variety of product offerings which appeal to a wide range of driving needs and price positions.
We can't be too crazy with the Continental brand in terms of design. We will focus on the ContiSportContact 3 and the ContiProContact, which are both heavily supported by OE -– BMW, Mercedes, Audi, Ford, Chrysler, you name it. We also will add 11 sizes to the ContiCrossContact LX line. But we will be more aggressive with our General designs to satisfy the demands of consumers.