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Plimsoll: U.K. Tyre Industry Recipe For Uncertainty

(Clacton, U.K./Tyres & Accessories) A study of the UK’s leading tyres, exhausts and batteries companies suggests few are fully in control of their overall business strategy.

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The survey by business analysts Plimsoll indicates a remarkable inconsistency in the companies’ commercial and financial behaviour. Very few of the tyres, exhausts and batteries firms planning to come out on top in 2007 in terms of profit and sales will actually achieve their goals.

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David Pattison, senior analyst on the project, says: “In today’s highly competitive tyres, exhausts and batteries market, you cannot sit still for a minute. If you have seen sales increase this year and good profits, there is a fair chance that next year you will not be able to maintain it. Likewise, if you did not increase sales this year you are going to have to set a priority of trying to grab some growth in the next trading period.”

The survey comes a year on from a previous Plimsoll study of the tyres, exhausts and batteries market. The company, based in Stockton-on-Tees, is one of the leading business performance analysts in the U.K., France and Japan.

Last year, Plimsoll carried out a survey grading each company based on how successful they were based on their sales and commercial success; and their overall financial strength, taking into account profitability levels and the level of debt carried by these companies. This year, Plimsoll has revisited and updated the analysis to see how the companies have coped with another year of competitive trading. The findings show that more than half of the 1,000 companies analysed have changed strategy in the last 12 months – and not all by choice.

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Of the 331 “winners” last year, 172 have retained their winning status. 237 are new to the winners category, having switched strategy since last year.

Of the “losers” last year, 93 have found themselves in this less than prestigious category for a second year. More worryingly for the industry, they have been joined by 77 other new ‘losing’ companies.

Of the 213 companies awarded chaser status last year, 102 continue with their pioneering strategy. They have been joined by another 137 companies, bringing the total number of chasers in the industry to 239.

Last year, Plimsoll ranked 235 companies as sleepers. 99 of these continue to preserve financial strength at the expense of sales growth, and they have been joined this year by 83 other companies who have switched strategy.

Said David Pattison: “What this analysis is clearly saying is that, in a very competitive market, of the companies planning to be a winner by the end of 2007, few will actually achieve their goal.”

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