As Continental Tire the Americas seeks to ramp up its retreading business, the company is opening up company-owned stores in certain markets.
In March, the tiremaker began operations at its third commercial tire, service and retreading center in Taylor, Mich. CTA also owns and operates a facility in Tolleson, Ariz., and Memphis, Tenn.
The stores, which are designed to serve “key fleet accounts” through new tire sales, retread production, maintenance, tire management programs and other services, operate under the name BestDrive.
“The market demands that if you’re going to sell new tires to the large key fleets, you’re going to have to be in the retread business as well,” BestDrive Managing Director Clif Armstrong said. “BestDrive is a route to market for Continental and the ContiTread product. It gives us another point of light for that option in the marketplace.”
While the company is willing to open company-owned stores in markets where key accounts demand ContiTread product, it only uses BestDrive as a last option, according to Armstrong. CTA first approaches independent tire dealerships in markets where the tiremaker is looking to set up shop.
“Our first hope is that we find independent dealers to convert,” Armstrong said. “We would certainly like to have dealers become a part of our ContiTread network, but there are certain fleets in certain markets where we don’t have a conversion that tell us that they want to buy new Conti tires and Conti retreads.”
In 2011, CTA introduced ContiLifeCycle, a retread product designed to be “a complete seamless solution for fleets that offers a full product and service suite from Continental,” Paul Williams, executive vice president of Continental’s commercial truck tire business unit, said. In the time since, Conti has signed 16 ContiLifeCycle licensees: 15 operate in the U.S., one operates in Canada.
Through a mix of licensees and company-owned stores, CTA is seeking to expand its ContiLifeCycle service centers across the U.S., Canada and Mexico, according to Armstrong.
“All of this is so we have the ability to service key fleets in U.S., Canada and Mexico,” Armstrong said. “BestDrive and the conversion option for independent tire dealers is just the next step. You invest in your product, you invest in your people and now you have to invest in your points of light.”
Last year Armstrong was appointed managing director of BestDrive, leaving his position as director of marketing for Conti’s commercial operations. He is located at CTA’s headquarters in Ft. Mill, S.C.
As managing director of BestDrive LLC, a subsidiary of CTA, all BestDrive stores report to him. He appoints general managers at each BestDrive location who and works with them to manage each facility’s business decisions from hiring and recruiting to budgeting and sales.
“Each store is a separate profit center for Best Drive LLC,” Armstrong said. “Everything we do flows through Continental. We create budgets, sales forecasts, P&O and work through all of the financial tools as an independent.”
Since Armstrong has taken the position of managing director, CTA has opened two facilities in a six-month window. Its Memphis location began operating Sept. 2014 and its Taylor location in March 2015.
“What we’ve done with these three locations is we’ve found an existing building, retrofitted it to our needs and opened it as a commercial tire dealership,” Armstrong said. “You can be a lot quicker to market that way.”
CTA’s first BestDrive location opened in 2011. Because CTA’s retread product was recently introduced, the tiremaker set up the facility in the Phoenix-area as a way to learn best practices and test its own product.
CTA also established the Phoenix-area BestDrive to cater to national account fleet in the area that was testing Continental’s retread product, according to Armstrong.
“Quite frankly, we didn’t know what we were doing,” Armstrong said. “But, we grew, we learned. We did a lot of tried and tested processes. We wanted to make sure that the retread process was sellable to conversion of our independent dealer base.”
The Phoenix-area BestDrive operation has two locations: a retread plant operating within the Lewis Arizona state prison complex and a commercial sales and service location in Tolleson, Ariz. Armstrong told Tire Review that its retread plant is a part of a state program that puts prisoners to work learning a trade in exchange for a savings account and board.
At this point, Armstrong said that CTA does not have concrete plants to open more BestDrive locations, but “that doesn’t mean that we aren’t constantly looking for opportunities to serve the fleet customers that we have.”