Stamford Tyres Adjusts Its Plans For China - Tire Review Magazine

Stamford Tyres Adjusts Its Plans For China

(Clacton, U.K./Tyres & Accessories) For Stamford Tyres, the Chinese market is not new. There they have a local partner that produces some of Stamford’s private brands such as the Sumo truck tyre.

Also, the new passenger radial private brand “Sumo Akina,” which will be launched by the end of this year, will be manufactured in China.

China is becoming more interesting not only as a production base, but also as a potential sales market. China the giant is taking centre-stage for many wholesalers, including Stamford Tyres from Singapore.

Consequently, the company already operates two distribution offices in China (Shanghai and Guangzhou) and a third one will be established this year. More important than these offices is the plan to build up Stamford’s own retail network in China, with the outlets called “Stamford Mega Mart.”

Currently the company operates in a “full distributional mode,” says Joseph Yeong, who is running the Shanghai office. This should be changed in order to improve margins on the ever-more competitive Chinese replacement market. Wholesalers and manufacturers that continue to approach this market from a mere distributional side, without operating a network of proprietary retail outlets, will eventually lag behind competing companies that are following both marketing approaches.

In order to be prepared for the changes that are expected to take place in China soon, Stamford Tyres has now established its first Mega Mart outlets; more will follow so that there will be about 10 Stamford-owned tyre shops by the end of this year in the cities of Guangzhou, Shanghai and Qingdao.

What is happening right now is regarded as a “test run,” explains the manager in an interview with Tyres & Accessories during the CITExpo in Shanghai last December. “The critical factor now is speed,” Yeong says. In a tyre market with at least 4,000 tyre retail shops, a growing commitment of tyre manufacturers and wholesalers to retailing (for example Michelin sells in about 300 exclusive retail outlets in China), as well as decreasing prices everywhere, it is now time to struggle for a good starting position, enabling Stamford to be well prepared for the upcoming retail market consolidation.

First signs of these developments have already been experienced by many tyre manufacturers suffering from costly surplus capacities. This puts prices under pressure, says Yeong. In 2005 alone, sell-in prices for international tyre brands in China fell some 5%; domestic brand prices have dropped even more. Increasing competition and price pressure generates a situation where short distribution channels without many intermediate dealers are becoming important.

The ideal solution to this would, according to Stamford Tyres, be to establish its own retail network that can work its own cash register.

Because the establishment of a proprietary retail chain is quite costly, Stamford’s Mega Marts have “to be a major part of the turnover.” Obviously this is tried by means of a centralised offer and price policy approach, and the premises for the shops are rented. All in all Stamford “ensures that our products go to our consumers in a very professional way” – Stamford is setting all the rules for its retail chain.

Thus Stamford Tyres will operate a “double system”: on the one hand there will be the well established distribution system in China with plenty of independent costumers, and on the other hand there will a retail network on its own account. Stamford also runs Mega Marts in Thailand and in Singapore.

You May Also Like

Sally Thomas taps into her tenacity to build on the success of her family’s tire business

Today, Sally Thomas and her brother, Bryan, operate eight retail stores, two commercial locations, three wholesale distribution warehouses, a Mighty Auto Parts franchise, and an e-commerce business.

sally-thomas-1400-REV

Sally Thomas is a second-generation tire dealer with ambition, grit, and heart for the tire industry. Her father, Paul, founded the business in 1981 out of the driveway of their family home, and he and his wife, Sandra, soon blossomed the company into a full-blown tire and service location in Asheboro, North Carolina.

Hankook Tire America recalls select Kinergy GT tires

Certain Kinergy GT tires, size 235/60R18H H436, are missing the missing the four-digit week and year code mark.

Recall
Radar Tires adds six SKUs to Renegade-X M/T tire line

The company is now offering 16 SKUs for this line, which was originally launched with 10.

Radar-Renegade-X-4
Three facts about modern electric power steering

EPS has enabled key vehicle advancements like stop/start systems, hybrids and advanced driver assistance features or ADAS.

TRIB’s new website offers tailored services for members

One of the highlights of the redesigned website is the introduction of the retread environmental savings calculator.

TRIB-new-website

Other Posts

RNR Tire Express to give away NASCAR tickets for Father’s Day promotion

The RNR team will be taking submissions until midnight on Sunday, June 16.

RNR Tire Express
How Phaelona Bradley champions customer service and breaks barriers

Phaelona’s commitment to making those around her better and improving customer relationships is helping to shape a customer-centric culture at Yokohama.

3633-Phaelona bradley
Kevin Speroff’s passion for learning and analytical approach make him an industry asset

Kevin approaches everything he does with the mindset of the eternal student, constantly looking to develop himself.

Even in the face of adversity, Randy John proves he will remain resilient

Randy leverages his expertise and customer relationships to strengthen Double Coin’s brand presence.

3633-Randy john