Page 17 - CTB N7 - 2014-03

INTERVIEW
Dixon International recently switched to Michelin X Line Energy across the whole of its fleet, after a trial showed it could save over 5% in fuel costs.
and expand its position, and why?
GH
A key target area for Michelin is to improve our position with smaller hauliers - fleets with less than 20 vehicles. They make up some 50% of the market place, but it’s an area where we have historically struggled to service properly because of the vast numbers of companies involved and the difficulty in contacting and visiting them.
However, we need to get our message across more effectively to this type of fleet customer, and this will be an important area of focus for us in the future. We will, of course, be able to reach them through the likes of ATS Euromaster and our network of Michelin Truck Professional dealer partners, as well as through social media and internet based tools. As the market evolves to a PPK orientation at that level, we will need to penetrate the market. This is a key challenge for us.
CTB
You recently introduced the Riken brand into the UK market to take advantage of growth in the tier 2 market. How successful has that been?
GH
The tier 2 market is growing rapidly for us. We have historically focused on Michelin and Remix but we now recognise the reality that not everybody fits into this market. For some people Tier 2 is the right product. We approach this sector of the market with Taurus, Riken and Kormoran, emphasising that they are made in Michelin factories in Europe at a competitive price, meeting the need for a Tier 2 alternative. They
are also all regroovable and retreadable. Our aim is now to increase the range and performance of these products, and our ambition is strong to increase volumes in the sector over the next year. Taurus is currently sold exclusively through ATS Euromaster, Kormoran through Michelin dealer partners and Riken through International Tyres in the UK and Tractor Motors and Midland Tyres in Ireland.
CTB
You have recently announced the introduction of a Michelin breakdown service. Why do this now and not before, and what are the main benefits to the user?
GH
Historically we have used the ITDN to manage breakdowns, but our customer base has proved to be more demanding, particularly with regards to fill rates. We were also looking for a more consistent service in other areas.
The new Michelin network offers a guaranteed Michelin policy fitment, on-time fitment, lower priced fitting than the ITDN and regular reporting and most importantly a guarantee that the breakdown will be managed by our partners which all carry a REACT (Roadside Emergency Action Concerning Tyres) licence. The network was launched at the CV Show and there are now already 300 centres in the UK.
CTB
You recently ran a campaign which involved the giveaway of a Euro VI truck. Are there any plans for specific marketing actions like this in the future?
GH
The Euro VI truck giveaway was a highly structured campaign and delivered good value for money. We received 400 entries from people who bought 5,000 tyres between them and the majority of entrants were fleets of fewer than 20 vehicles, therefore fitting in with our target segment. We got a lot of publicity out of it. It was also beneficial in that it helped us to get the message across that Euro VI is not a compromise because the 315/70 size is usually better on mileage than the 295/80 fitment. We will certainly be doing this promotion again, but next time it will be in continental Europe.
CTB
What can you tell us about the growth in all weather tyres across Europe?
GH
All weather tyres are important because they increase mobility in difficult conditions. This fits in with our strategy of making sure our customers have maximum mobility, and many of our products are marked with the 3PMSF symbol (Three Peak Mountain Snowflake). Overall there is growth in the winter tyre market in business cars and vans, while the blue light services have been convinced for some time. People who are out in all weathers understand the benefits of winter tyres. In the truck sector, fleets are also starting to buy into the concept a bit more.
CTB
What is the future of retreading within the Michelin Group? With labelling on the horizon for retreads,
is there a future for the Encore product?
GH
There is most definitely a future for retreading. We have made a £26 million investment in our UK retread factory in Stoke-on-Trent, which we believe sends a very strong message to the market. We wanted to do this in the UK, in order to allow us to produce retreads with our latest technology tyres as well as providing a significant increase in volumes. Our message is that you can only get the best out of your investment in premium tyres if you retread and regroove the tyres according to manufacturer recommendations. Our tyres are designed to be both retreaded and regrooved. It is true that Michelin tyres are priced at the top end of the market, but there is a reason for that. If a brand new Michelin tyre cost £400, the cost per axle can be reduced to less than £200 per axle, but only if you use retreaded and regrooved tyres on most of your axles.
Overall, we don’t expect the UK retread market to grow, but we do expect to increase sales of our Remix product. There will also be a future for Encore. There are some customers in the market who want remoulds rather than cheap tyres so there is some growth there. There is also an increase in demand for retreading tier 2 brands, in addition to the role that Encore can play in the management of fleets which are switching over to Michelin from other premium brands.
Michelin’s X Multiway 3D tyre fitted on a vehicle belonging to fleet customer Suckling Transport
Commercial Tyre Business 17