Still in Vogue: Hathcock Discusses Car Dealers, Tire Dealers, Products and the Future - Tire Review Magazine

Still in Vogue: Hathcock Discusses Car Dealers, Tire Dealers, Products and the Future

Founded in 1914, Vogue Tyre has always been a little different, a bit more upscale. Best known as “that Cadillac tire,” Vogue catered to top-end cars and sold what was touted as the industry’s first whitewall, a stark contrast to the day’s solid black tires. Later, it added its now trademark white/gold sidewall stripes.

A family-owned company then as it is now, Vogue has never aspired to be a major tire player, but rather wants to be known as a quality company with quality people (180 of them) offering quality products. The Mt. Prospect, Ill.-based Vogue is also a quality customer, celebrating its 70th anniversary as a Goodyear customer – and as Goodyear’s oldest private brand account.

Today, Vogue is headed by Greg Hathcock, president, and has broadened its product screen to include custom wheels, performance products and vehicle trim. Tires remain some 45% of Vogue’s business. While car dealers remain Vogue’s primary target market, tire dealers are becoming a larger part of the picture.

Tire Review sat down with Hathcock recently to discuss Vogue’s plans for the future.

Talk about where you are with the tire dealer segment and where you see that heading in the future.

“Well, we are always looking to do more. You need to be careful that you are reasonable in your approach and the distribution you have set up is a positive arrangement for all of the parties involved. You want your distributors to be successful with your product so that they can deliver the kind of service and support you need for the end user. We try to be careful in that. We want our distribution to be as thorough and pervasive as possible, and we try to reduce redundancy as much as possible. In an ideal world you wouldn’t have any redundancy, I guess, but that gets difficult at times. So we need to make sure that as a business proposition, it does make sense for all of the parties involved rather than just pumping out as much product as we can. That said, we are always looking for opportunities to increase business and have more complete coverage in all markets without overloading them or taking away business from partners who have done a nice job for us.”

Is there a prototypical tire dealer customer for Vogue?

“Not necessarily. From market to market the opportunities will vary. You’ll have some markets where you’ll have a dealer like Belle Tire that does a nice job in retail, or a Discount Tire or Les Schwab. There are other markets where it is more appropriate to have a wholesaler who can sell to the smaller independents. They are an important part of our business, as well. Part of it is driven by opportunity and what infrastructure exists – as long as you can provide good retail distribution and service in the market. Either way works out.”

Are you approaching things on a territorial basis? Is there a parameter you look for?

“Is there a parameter when we are considering a new distributor? Sure. We have to look at things like making sure we’re not creating redundant distribution. We want people who are going to service the product, honor the warranty and so forth. A big part of our product is the warranty that comes with it and we want to make sure that’s done correctly. Some dealers are better set up to do that than others. You need to take that into account.”

What are you finding from car dealers about how they are treating tire sales? Are they becoming more aggressive with it or less aggressive?

“They are all different. I think car dealers are becoming much more serious about selling tires. I think they see the opportunity in customer retention and selling other services and products that come with that retention. I think, to generalize, I do see that continuing to be a growing part of their business. Vogue has been selling tires to car dealers for years and stressing those same kinds of benefits. It makes perfect sense to us.”

Is there a certain type of car dealer you look to align with?

“We have two different programs. We have the direct program where the dealer purchases the inventory and then retails it and services it. And then we have the custom center program where we run a turnkey aftermarket program in the dealership with our people, our equipment and our inventory. So there’s two different models there. Obviously we need certain volume levels to support the custom center program because of the expense we incur by running an operation there, but virtually any dealership can be a direct dealer.

“In terms of a specific type of dealer, it’s been more Cadillac in part because we have been with that brand longer. We’ve also been in several Lincoln and Chevrolet dealerships over the years. It all depends on how well you can get all of the different parts of the dealership working together with you to generate the business you need to support the infrastructure you have in place.

“We have dealers who have GMC, Hummer, Buick, Chevrolet, Pontiac, etc. Every different franchise in a dealership offers us more opportunities to sell product and make the dealership money. Hummer being paired with Cadillac dealerships is common and it’s been great for us. But we’re not necessarily tied to any one badge. As it works out we have been more successful with Cadillac, but we’d like to diversify into other brands as well and we’re working on that.”

Talk about your relationship with Goodyear.

“2008 marks our 70th anniversary with Goodyear. The big 7-0. We were their first private brand customer. We’re proud of that. I’ve been with the company since 1991 and right now we have the most projects in development with Goodyear than we have had since I came on board. So we’re very excited about 2008 and all of the opportunities we have. The more new products you have, the more niches you can fill on both the new car channel and the tire dealer channel.”

During your last new product introduction, you said one of the reasons for that product was to fill voids in your offering. Are you finding that more and more, and is that because of the propensity of the OEMs to have broader SKUs?

“What we’re finding is that it’s not necessarily driven by the OEMs anymore. The tire we introduced, the 245/40R20, was in that market segment for bigger wheel sizes and we wanted a 20-inch tire for OE and replacement channels, so that was an obvious product niche. Some of these other projects are the same kind of situations where they really are driven more by pure aftermarket needs and opportunities. We’re trying to fill in niches where customers with a mid-sized vehicle cannot fit a Vogue that we built for a full-sized Cadillac. We think these new products will bring a lot of incremental opportunities for us and our distributors.”

Is there a vision on your part that Vogue could be a bit broader, with more products and more dealers instead of being somewhat exclusive and limited?

“Do I think we can take our brand and create new products – whether it’s a new sidewall design or different sizes or different speed ratings – and broaden our appeal to different markets? Yes, and those are some of the projects we’re working on now – to take the Vogue name and have it not just be white/gold stripe tires. Maybe there is something else we can do and still leverage the equity in the brand and appeal to other consumers.

“Maybe there are people who don’t want whitewalls and one of our goals is to appeal to them, to have a premium tire they will aspire to have on their cars. And that is different for us, but I think that’s a growth opportunity for us. There are some car dealerships out there that don’t want to sell whitewalls. We have a very strong brand and we think we can use that to branch into other areas.”

Is there any thought to make a Vogue private label brand, maybe a broader approach to the market but without the Vogue name on it?

“We’re certainly open to new ideas. With the way manufacturers are approaching private label tires these days it might be tough to do something like that, but maybe so. I don’t know how you would. Unless you’re high-end, it’s hard to give dealers the margins they need and be competitive with everything coming in from offshore.”

Another way to look at it is, are you looking to broaden the business in different fashions or are you looking to build the business with a traditional approach?

“I think it makes more sense for us to focus on the things we know and stay in the premium end of the market. That is probably the best way to go. That said, there is a lot of opportunity for growth there for us without having to change our distribution infrastructure. With the sales force we have and the business model with the custom centers and the tire dealer distribution we have now, we think we can grow within that framework. We just need to have the right kind of product. I’m not sure going down market works with what we have set up. It’s really about finding out what the market wants.”

How much feedback and help do you get from Goodyear in terms of where market opportunities might be?

“We get information from a variety of sources. We’ll talk to our tire dealers, we’ll talk to car dealer customers, we’ll look at independent sources of data to see what cars are coming with what tires. We’ll run things by Goodyear and consult with them and get their feedback because they obviously have some ideas of market trends. It’s really a combination of things.

“Goodyear is really a great partner. They give us a lot of support and we’re very fortunate to have that kind of support.”

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