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Customers will pay 9% more for service

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Customers will pay 9% more for service

A wide range of topics were discussed by industry executives during the featured conference at the Latin American & Caribbean Tyre Expo.

After a welcoming speech by Gustavo Lima, show CEO, Dr. Roy  Littlefield, Tire Industry Association Executive Vice President, explained the many tire safety and training materials that they were producing. Of importance to the audience, Littlefield stressed the number of programs that are now available in Spanish.

Wilberth Campos, director of human relations for Bridgestone of Costa Rica S.A., brought a unique perspective to attendees. He cited surveys of executives about their plans for employees of companies. One survey of European CEOs revealed that 78% of them planned to make changes in their personnel, but 31% felt their companies lacked the talent to be moved upward.

And 70% of the CEOs said they did not know the talent level in their companies.

Campos compared this to other surveys that cited 85% of consumers would pay more to get customer service from companies. He emphasizd that customer service meant better interaction with people in companies, not infrastructure. The same customers said they would pay a full 9% more for this increase in service.

Campos used the results, and the need for increased productivity and employee satisfaction, to emphasize the necessity of on-going training programs for employees and management. Campos said companies polled with satisfied employees had a productivity increase of 16% and 2.4 times greater profitability.

The other benefit to companies is much longer employee retention.

"I believe HR is not the most important thing for companies, but it is talented HR that should be the most important thing," he said. His own company, has been voted as the third best place to work in Costa Rica. He said Bridgestone has a variety of training initiatives for its employees; it also provides a whole host of employee benefits, including a gym, medical center, theatre and sports sponsorships.

Campos said that all of this is important, but it must be sustainable to the company in order for the company to be competitive. Campos revealed that Bridgestone spends about 50 cents per $100 in sales in HR.

An in-depth look at worldwide retreading was done by Heriberto Romero, director general of Hules Banda of Mexico. Using the year 1970 as a starting point on an index scale of 100, Romero said the world had 50% fewer retreaders by 2000 still producing the same number of total retreads.

While the number of retreaders is stable for 2013, the total production has dropped so far to 90% of 1970 totals.

Romero's prediction for 2020 is for there to be 25% fewer retreaders producing 120% more retreads. He also pointed out the emerging production of retreads by Chinese companies. Romero estimates there are roughly 2,000 to 3,000 retreaders in China, and they have the capacity to produce 15 million truck tire retreads annually. He believes these companies will increase their capacity to 20 million by 2017.

Romero also cited a new law in Ecuador that says if a company imports 10 new tires, it must retread three tires. The law is designed to increase retreading and help the local economy.

Romero ended his presentation to laughter with a business truism that everyone appreciated: "A sale is a gift until you're charged for it."

Walt Weller, vice president of CMA LLC, provided attendees with an inside look at Chinese tire company production and positioning worldwide. Weller said Chinese tire companies produce 55% of global truck tire units.

He said  tire companies in total produced 144 million radial truck tires in 2012. Weller cited changing attitudes toward Chinese products, similar to what happened with Japanese tires in the 1980s, as one of the  reasons the companies continue to grow.

Weller showed a chart of the changing nature of the positioning of brands in North America as an example of what is happening in the market. In the 1990s, the three tier one tire companies held a 65% share of market in truck tires. Tier two companies held a 25% SOM, while tier three companies (that included Hankook and Kumho at the time) stood at 10%.

Currently, tier one companies hold between 45% to 50% SOM, with tier two companies (that now include Hankook and Kumho) at 25% and tier three companies (now almost exclusively Chinese manufacturers) at 30%.

Modern Tire Dealer will report more on Weller's speech in an upcoming issue.

For more information on the show, check out these links:

"Early resutls from Latin American expo are positive."

"Latin American & Caribbean Tyre Expo expands."

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