Continental re-boots truck tire strategy
Continental Tire North America Inc.’s (CTNA) decision to enter the retread arena (see page 21) is just one step in the revitalization of the company’s commercial tire program.
This past March at the Mid-America Truck Show, CTNA introduced five new truck tires, the firm’s biggest commercial product launch in years (see “Commercially Viable” on page 35 for more information).
The company also unveiled its ContiFleet program, which is designed for owner-operators and small fleets that don’t qualify for traditional national account programs. In addition, CTNA is stepping up its sales efforts. The company recently increased its sales force by 50%.
All of this adds up to what is, in essence, a complete re-tooling of the way CTNA approaches the commercial truck tire market, says Paul Williams, executive vice president, Commercial Vehicle Tires, the Americas, CTNA. Commercial Tire Dealer recently caught up with Williams and Clif Armstrong, director of marketing, Commercial Vehicle Tires, the Americas, CTNA, to discuss the company’s strategies and goals.
CTD: CTNA held its largest new truck tire launch in quite a while this past March. Given the fact that the market is down, why conduct such a big launch at this time?
Williams: Because we had all of these new products coming on board, we took the opportunity to bring a new message about what Continental truck tires are. We’ve gone out there and listened to the dealers and fleets to try to understand what the industry is looking for and where they see Continental within their sourcing strategy.
We thought, “Let’s at least address one of the aspects we’ve heard when we were making all of those fleet calls,” which was, “You have excellent products, but you don’t do enough to talk about them and you don’t do enough to support them.”
One thing that annoyed me is everyone said, “You’re second tier. You’re a second tier product and you’re in a second tier position because you don’t have all of the attributes that the first tier providers have. You don’t have the retreading, you don’t have the national footprint, you don’t have the programs and you don’t have the support infrastructure.” So we said we needed to work on that. And recognizing we had all these new products coming on, we said, “We need to ramp up and reorganize ourselves.”
CTD: The ContiFleet program has been designed for small fleets and owner-operators who don’t qualify for traditional national account programs. Do you see these groups as being under-served by tire suppliers?
Armstrong: What we see from the standpoint of small fleets and owner-operators is they sometimes find themselves in a position where they can’t control their on-the-road purchases because they aren’t linked with someone who has a national emergency road service network.
The ContiFleet program was designed to give them another avenue to manage their on-the-road purchases.
CTD: Is ContiFleet exclusive to your independent tire dealer network?
Armstrong: No. We work through a third party vendor... (which) has their arms throughout the entire U.S., not only with our network but a complete, separate network of partners they can work with.
CTD: Speaking of your dealer network, do you have aggressive plans to increase your dealer points of sale this year?
Armstrong: We have great customers; what we don’t have is the right penetration. We do business with most of all of the key customers in the U.S.; what we don’t do is service them the right way. We have a renewed focus on making sure we service customers not only from a fleet standpoint but from a dealer standpoint with programs and products they want to take to market.
CTD: What voids in service do you hope to fill?
Armstrong: We would like to be more of a part of somebody’s business.
Williams: If you remember where we’ve come from, we were probably too sparsely populated out in the field. Tires are sold person to person in fleet yards and fleet offices. When you don’t have the number of people you need and you have lots of competitors calling on people, they obviously have a bigger impact.
CTD: What are your plans for the General truck tire program in 2009?
Williams: We’re never going to ignore General. It’s an important brand for us. We have a new steer tire coming out, the S581. In terms of value, it’s going to be a very important product for us. But our main focus is to push the Continental brand because that’s our premium brand.
CTD: What’s your take on the general health of the U.S. truck tire market? What challenges do you face as a manufacturer that’s trying to raise its profile?
Williams: We had our kick-off conference — both our sales conference and dealer conference — in January. One of my opening remarks was, “There’s a lot of speculation about how bad the market will be this year.” For me, it’s completely irrelevant. There will still probably be 12.5 million to 13 million radial truck tires sold in the replacement market in the U.S. in 2009, and we’re not selling them all. So there’s plenty of scope for us to increase our volume and market share, and in the first quarter we’ve done both.
Because of today’s economic pressures, fleets “are more open than ever to getting value out of everything they buy,” adds Williams.
“If you win the business in times like this, they will remain loyal to you when the market recovers.” ■