Continental's share of commercial segment set to escalate

Four months have passed since the new commercial range was unveiled to the press, distribution network and end user trade. We caught up with Brian Clark, GM Commercial Vehicle Tyres for Continental, to check on the progress of the new tyres and gain some insight into Continental’s aims and ambitions where commercial market sector is concerned.

Brain, thank you for meeting with us. Your presentation to the market a few months back ably demonstrated your complete confidence in the new product range. Will the full product line be manufactured locally, and if so, is the range already in circulation?

It is our strategy to have as many products as possible locally manufactured and yes, I’m please to report that most of the new generation products are available already.

We believe the initial testing process is well underway. What kind of feedback are you getting or is it too early for you to obtain any meaningful results?

Tyre testing has been in progress since January 2010 and again, I’m pleased to say that the results so far are impressive, both with respect to mileage and fuel economy.

How do you intend achieving market penetration for this new product range?

A combination of both above and below the line advertising has already commenced as part of our strategy to improve our visibility to the end user. Over and above this, in recent months, we have improved our OE presence significantly and are also planning to boost sales in the replacement sector via our loyal dealer channel.

The ContiPartner programme traditionally concentrates on the passenger tyre segment. How do you intend on bridging the gap?

ContiPartner is primarily a passenger tyre channel but there are many ContiPartner outlets that only specialise in truck….Tonway Tyres in Rosslyn is but one example. Where no ContiPartner outlets exist, we have several kwikfit and independence tyre dealers such as the likes of Tyres 2000. Auto & Truck or Tyrecorp to fall back on. They are well equipped to support us in the commercial tyre sector.

What about after-service sales, such as on-site tyre maintenance. Do you currently offer this service and if so, through whom?

Continental has always provided after-sales service through a specialised sales force and customer service department direct to the end user and dealer channel. As for an on-site service, at this point we prefer to leave the servicing to the experts. Our job is to provide a top quality new tyre through them.

That being said, it is possible that in the future, Continental SA will be in a position to secure contracts on behalf of its sales channels.

How would you go about encouraging a greater number of ConiPartner stores to become more involved in the commercial market?

One of the primary reasons why many tyre dealers are reluctant to enter the tyre market is the risk. Bad debt is a problem in most B2B industries and tyres are no exceptions. However, for dealers with good risk management systems in place, the rewards are well worth it. Effectively servicing and meeting the needs of end users in the commercial sector can make for profitable businesses. Continental supports many of these successful truck tyre businesses and we are confident that our new generation tyres will benefit their business even further.

The market has changed with the commercial sector expecting an entire sales package, one that encompasses new tyres, retreads, on-site maintenance, on-road servicing and the like. Do you believe that Continental, through its preferred dealer network, is equipped for this task, and if not, what must be done in order to achieve this?

The market is far from homogeneous. Some traders we speak to require only the cheapest tyres possible, while others take a long term approach to their fleets. The ‘cheap tyre’ market is not our market. Similarly, the dealer network differs in its ability to supply various services required. Continental does not offer a retread solutions as yet, but we are in the process of finalising a cradle-to-grave package. The first step was to improve the core product. Now that this has been done, further developments in this regard will soon be announced.

What are you immediate areas of focus not that the product has been officially released?

Our immediate focus is to ensure that the quality of the product is the same as the European equivalent. The next focus area is to release the balance of product that has yet to be introduced to the market. And of course, simultaneously, we are concentrating on making the market aware of features and benefits of our new range.

What do you believe is the biggest challenge facing Continental Tyre SA in its quest to strengthen its position in the SA commercial tyre market?

Continental does not have unique challenges. I believe that all tyre companies in SA face the challenge of rapidly increasing raw material and input costs. Added to that, the influx of low priced imported tyres continues to threaten local manufacturer market share and employment, not to mention the issue of availability of human resources – this has become a serious area of concern in recent years.

Overall, I believe that timely investments in a new truck range has positioned Continental well to strengthen our position, which does not imply that we can rest on our laurels. Continuous development will be required to maintain and grow market share.