Sunny Locale, Sunny Prospective

MAST outlines successes at annual meeting

When Michelin Americas Small Tires (MAST) gathered for its annual dealer meeting last month on Paradise Island in the Bahamas, the company’s goal was two-fold.
First, MAST wanted to discuss its views for both this year and the future. Secondly, it wanted to sing the praises of what it considered a successful 1999.
“We can sum up our success in 1999 using three simple statements,” said Pete Selleck, CEO of MAST and executive vice president of Michelin North America. ®Our supply chain is now healthy, we gained considerable marketshare and we exceeded our financial targets.
“In many ways, we turned the corner in 1999 and we sense your confidence in us as we have delivered on commitments that we made to you to improve our performance and become the best all-around tire manufacturing partner available in North America.”
Turn the corner it did. According to Michelin, the tire maker’s top three brands all experienced above-average growth last year.
“In a market that grew about 3.5 percent, Michelin sales were up 11 percent in 1999. BFGoodrich was up 19 percent. And Uniroyal was up 9 percent,” said Ken Kruithof, vice president of sales for the eastern United States. ®The associate brands — Riken, Cavalier and Medalist ®” all were up considerably.®
MAST attributed a lot of that growth to its ability to give dealers the product they need, when they need it. Michelin feels confident that it can continue to achieve higher fill rates, which, in turn, will increase profits for all involved.
“(Another) point of progress we need to work on is to integrate our respective supply chains,” said Jean-Michele Guillon, vice president of sales for MAST. ®We made tremendous progress in 1999, achieving 89 percent fill rate for all our brands. We can do better and achieve class figures at about 95 percent, if we work with you (the dealers) on these challenging goals.®
  But experiencing continued growth isn’t just related to fill rates. Increasing marketing efforts and playing off brand equity can have a major impact as well.
“First, we want to work with dealers to enhance the consumer tire-buying experience,” said Scott Clark, vice president of marketing for MAST. ®This includes sharing retail best practices and working with you to test service and retail concepts for the future.
“Second, to capitalize on the growing brand orientation among consumers, we will continue to build the equity of our brands and strengthen our multi-brand portfolio. Finally, we need your help to increase our multi-brand advantage by making our brands easier to find and by helping to protect their equity.”
As stated by Kruithof, the major Michelin brands grew well above industry standards. But that wasn’t the unexpected part for Michelin brand manager Alison Heiser.
“I must say that we knew that 1999 would show significant gains in fill rate, but the real surprise was how quickly we achieved our goals,” she said. ®In April, Michelin’s fill rate was 90 percent and in the last eight months of the year, we have sustained what amounts to about a 15 point increase in fill rate over our historical average of 75 percent.
“Backorders are practically non-existent, and this is all being achieved while we are shipping record monthly volume. We’re not perfect … but our supply chain is healthy and the improvements are systemic and predictable.”
Even though the BFGoodrich brand saw the highest levels of growth, dealers can still expect more things out of the brand this year. By the end of the first quarter of 2000, BFG will have introduced two new tire lines.