Cultures, climates, food and fashion may be different around the globe, but it seems that no matter where you are the business of tire retailing and being an independent tire dealer are pretty much the same.
Two good examples of this are Lee Do Il, owner/manager of Automaster Kimpo in Seoul, South Korea, and Arie van der Veen, owner of Kroonband B.V. in Enschede, The Netherlands two independents on opposite sides of the world. Tire Review had the opportunity to visit these two dealers in recent months.
Despite their divergent backgrounds, both van der Veen and Lee have much more in common than perhaps even they could imagine. Both put in treacherously long days and take tremendous pride in their accomplishments. Both are quite expert in their crafts, having spent years learning the ropes from others before going it alone. And, both have built successful ventures based foremost on quality service.
In the Kimpo section of Seoul, Lee’s four-bay Automaster store does a good business. Even though it’s located on a side street, well away from heavy street traffic, the store turns about $100,000 per month in retail sales of tires, custom wheels and basic vehicle services. Lee also wholesales passenger and medium truck tires to smaller dealers in his area, though it is a minor part of his business.
Every inch of the 7,000-square-foot facility is quite clean, from the well-lit service bays to the customer showroom. The showroom has two sales desks and a counter, with plenty of product literature for customers. Because he is a wholesaler, Lee stores tires wherever he can, including in a space behind the rear wall of the service area. Despite the presence of hundreds of tires, the Automaster location doesn’t appear the least bit crowded.
One big fooler, though. A five-level tire storage rack stretches from the sidewalk to the building, with hundreds of passenger tires all chained in place. They’re all for show, however, and each has an inch-diameter hole to both prevent use and facilitate drainage.
Uniformed technicians, including Lee, do all the work. Speed and precision are key as Lee and his staff deftly move about two dozen cars in and out each day. And “each day” runs from 8:30 a.m. to 8:30 p.m., seven days a week. Automaster, in fact, is closed only on the first and third Sunday of each month the two days Lee gets to take off each month.
As owner, Lee has the obvious responsibilities to his four-man staff and his customers. He also has a pretty hefty responsibility to his benefactor Kumho Tire Co. After 15 years with another dealer, Lee had saved up enough money to buy his own store and lease the land. Seven years ago, he did just that, and for the last six, he did passable business nothing great, but not too bad.
Just over a year ago, Lee signed on with Kumho’s then new Automaster program, sort of a cross between a franchise and an affinity program. Kumho fronted Lee the money to remodel the facility and purchase new displays, lifts, and mounting, balancing and alignment equipment. Lee only has to repay 25% of those costs.
The store is 100% Kumho, and Lee gets program pricing. In return, Lee must make sales of at least $70,000 per month. His Kumho rep comes in every six months to evaluate his progress and success. If he ever misses the target, Kumho can take back its support and leave Lee holding the financial bag, something Kumho says would be unlikely unless it became a troublesome account. That doesn’t seem likely in this case.
“My sales doubled when I joined Automaster,” Lee said. “It has been a big help to me and my business.”
The Automaster program insists on a clean and consistent look for the stores, and Lee is an example of that unified look. Compared to most other independents in crowded Seoul, his inviting store clearly stands out. And, it has allowed Lee to branch out; Automaster Kimpo recently became an associate dealer for Renault-Samsung Auto Manufacturing, handling light repair and warranty work for an adjacent RSAM dealer.
Lee said his customers are “very interested in their cars,” and most are very performance oriented. He maintains a computer file on each one to keep track of the service work done as well as pre-schedule customers for future rotation or oil change appointments. Most of his customers are regulars; given that his market area stretches less than a mile in any direction, having regular customers is important to his future.
Half a world away in Enschede, The Netherlands, Arie van der Veen, owner of Kroonband B.V, also understands the value of good customer relations. He hasn’t done any advertising in 20 years, he claimed, because his best advertising “is to treat customers and people who work for me the right way. Otherwise, word gets around.”
Enschede is like any small town a mix of houses, stores and industry. One of the biggest employers is one of van der Veen’s suppliers Vredestein Tyres B.V. In fact, van der Veen’s single store nearly sits in the backyard of the factory, giving him easy access to customer support.
Still, Vredestein makes up 25% to 20% of his sales, van der Veen said. Michelin makes up another 25%, Uniroyal 20% and Continental 10% to 15%.
He also gladly tracks down special orders for his customers, regardless of the brand. Kroonband B.V. also wholesales to local car dealers and small area repair shops.
A second-generation dealer his father founded the business in 1938 van der Veen is actually on his second career. He started out as a schoolteacher, giving up the classroom for the showroom some 35 years ago. When he was a child, his family lived above the shop, and he helped out after classes.
His son now works at Kroonband, but van der Veen questions whether his son has the desire to continue the family business. “The tire business for a small dealer gets tougher and tougher,” he said.
Kroonband concentrates on consumer tire sales, and it was only 10 years ago that van der Veen added custom wheels and repair work to the mix. Today, tire sales represent 75% of his business, but service represents 50% of his profits.
The seven-bay store is located in an older neighborhood but is quite accessible. Van der Veen has such a great relationship with his customers they literally drive up, toss him the keys and leave.
If a customer is in a hurry and can’t wait for his or her car, Kroonband has a ready solution a fleet of bicycles to get them on their way. That’s right, bicycles. There are some 32 million bicycles in The Netherlands two for every person and it remains the most practical form of transport in most towns and cities and a true sporting passion among the Dutch.
By comparison, there are barely 7 million cars registered in The Netherlands, or 0.44 of a car per person. To the Dutch, cars are important for transportation purposes but don’t hold the same cultural value as they do in many other European countries. And, since the price of gas there hovers between $5 and $6 a gallon, few new vehicles will be added to the registration rolls.
That places additional pressure on Kroonband to get it right. It can ill afford to lose a customer. So van der Veen and his staff have to go the extra mile in customer service (by offering winter tire storage, for example) and product/application knowledge.
Dutch drivers know quite a lot about vehicles and tires especially when it comes to the value of maintenance so going above and beyond takes a lot of extra training.
That extra education comes in handy when making tire recommendations, said van der Veen, to meet the challenging weather conditions Dutch drivers face. For the most part, customers rely on his tire recommendations, he said, but when one insists on a particular tire, “I don’t argue.”
“Even when they just hand me the keys, I always offer them three or four tire options,” he said.