Tyre size proliferation poses challenge

MAINTAINING and financing stock of more than 500 tyre sizes across around 200 brands poses an impossible challenge for tyre shops, but Kumho Tyre Australia believes the company that succeeds in cracking this nut will be rewarded with greater market share.

Speaking at the Ecsta PA51 performance tyre launch near Goulburn in New South Wales, Kumho Tyre Australia sales and marketing director David Basha said customer expectation of instant tyre availability was out of step with the reality facing tyre retailers.

“We’re driven these days – and it’s part of the eBay phenomenon – where if you buy something today you want it delivered tomorrow, not five or seven days,” he said.

Mr Basha estimated there were between 500 and 600 tyre sizes on the market today, compared with around 200 when he joined the business 30 years ago.

“Most tyre shops will have something at an entry-level price, a mid-range product like Kumho and then a Japanese or European product,” he said.

“For each of those brands you’ve got between 300 and 800 products – you can’t carry them all – and when a new vehicle comes out, in a lot of cases, out comes a new size. Or, in some cases, staggered fitments, so two sizes for one car.”

Against this backdrop of complexity, Mr Basha observed that customers still expected “that tyres will be there to fit their car” when arriving at the retailer, or at least that the job would be completed within hours rather than days.

“We’ve got to find a way of getting tyres to tyre shops within two hours,” he said.

“This is where logistics comes in. The biggest challenge any of us have in the tyre industry is being able to get tyres to tyre shops as quick as possible and that’s only going to be more of a need in future; there’s going to be more and more emphasis on that.”

Mr Basha predicted that implementing a just-in-time tyre delivery infrastructure would be costly but worthwhile.

“A lot of cost comes into play but whoever wins this battle will gain more market share, so we see it as something we have to work on,” he said.

As reported, Kumho Tyre Australia is seen by its South Korean parent company as something of a standard-bearer due to having the largest market share outside Korea and China as a result of strong distribution operations and retail partnerships.

“We’re responsible for the branding of Kumho in Australia but our day-to-day effort is storing tyres in warehouses and getting them out to the tyre shops,” said Mr Basha.

“There’s an old saying in the tyre trade that we all sell things that are black and round, so how do we make sure that more of our tyres get onto the shelves in the tyre shop and are recommended to their end-user customers? By providing excellent customer service (to the tyre shops).”