National Tyre Distributors Association

In his speech at the 2009 TWG Annual Lunch, The Wholesalers Grtoup Chairman Ashley Croft described the past year as a “harsh period”, but made clear that the recession had hit hardest in the tyre business where manufacturers were most committed to supplying original equipment. However, he stated, “replacement market traders have once again proved themselves to be relatively recession-proof”.

speech in full...... 

"It was at this time last year that the forecasts of the prophets of doom warning of global meltdown and pending economic depression looked as if they would be proved correct.  It has indeed been a harsh period, with the strategy of bank bail-outs and Government support in order to prevent collapse of the worldwide economy continuing to be critically analysed.  Thankfully the forecast potential depression did not happen; a deep worldwide recession has been endured, and we now have countries beginning to lift themselves technically out of the definition of recession.  Will we have learnt from our mistakes?  Will we be better placed to avoid the same pitfalls in future?  Time alone will tell, but the cynic in me says that man’s greed will cause him to suffer memory loss, and the same mistakes will be repeated.  We already have a Government whose desire for the banking sector seems to be for it to return to the lending levels of before, apparently forgetting one of the major causes of the problems we have so recently faced.

"So what has the last 12 months meant for our industry?  The forecasts of gloom and doom have certainly applied if you are a tyre manufacturer supplying O.E;  they have certainly applied if you are involved in the commercial tyre fitting business;  they have certainly applied if you are a vehicle manufacturer whether it be car, van or truck.  But if you are involved in the car tyre replacement market, as either retailer or wholesaler, our trade has once again proved itself to be reasonably recession proof.  I first became involved in the tyre trade almost 40 years ago as a “Saturday boy” at our local tyre and exhaust centre.  Since then I have now experienced 3 recessions, and the car tyre replacement side of this industry has proved remarkably resilient through all.  This year our market has remained static in volume, although a shifting from premium through mid-range to budget has certainly been experienced.  This is a cause for concern, as premium brand sales decline from what was already a weak position within this market.  This is undoubtedly a challenge for our industry, particularly when we also consider that as yet we have seen little impact on budget tyre pricing within Europe through the 35% tariffs on Chinese tyres imported into the USA.

"This is not the only challenge that faces our industry.  We have a raft of new legislation bearing down upon us, some of which has major implications for wholesalers.

"The Government’s fiasco over the introduction of s-marking legislation has led them to comment “it will be vigorously enforced from the day it becomes law”.  What a shame the enforcement bodies do not pursue tyre tread depth legislation with the same zeal!  The percentage of tyres removed with illegal tread depth continues to grow.  Statistics prove they cause accidents, injuries and deaths, yet the focus of enforcement will be trying to discover who is stocking and selling noisy tyres.  How many people will noisy tyres kill or injure?

"From January of next year, the use of PAHs in the manufacture of tyres to be sold within Europe is banned.  The concern faced by all is that there is nothing on the sidewall of a tyre showing it conforms, nor is there a simple way of testing the product to find out.  This is further complicated by the fact this is not a worldwide ban.  Wholesalers are going to need to exercise extreme caution in sourcing tyres to ensure they are compliant with this legislation.

"Francesco Gori, MD of Pirelli Tyre and President of the ETRMA, states “he is concerned to see a level playing field”.  The introduction of tyre labelling in November 2012 could be what he is looking for.  Compliance with the requirements of this legislation will be a challenge throughout the industry, from supply by the manufacturer through to displaying and including the relevant information within a retail premises and on quotes and invoices.  It will certainly prove interesting to discover consumers’ reaction to the information they will be provided with.  What price, I wonder, will tyre labels have on the “black market”?

"One thing that has been apparent with the run-up to the s-marking requirement was the high level of ignorance within the retail sector of this and indeed any of the other forthcoming legislation.  Whilst NTDA members and those unaffiliated but owned or franchised by tyre manufacturers received plentiful communication, there is a large number of outlets that have no contact from these channels and do not subscribe to the trade press.  With minimal representation “on the road” by manufacturers, the only contact these outlets enjoy is from tyre wholesalers, either from telesales or wholesale representatives, and also significantly from the delivery drivers of the wholesale businesses.  In the absence of licensing of tyre retail outlets from the government, something that may be considered desirable but unrealistic, I consider there to be an obligation on the trade to ensure these outlets are educated and informed of forthcoming legislation and product developments within the trade. 

"This obligation extends through wholesalers to distribute information, to manufacturers in supplying it, either individually or collectively through the TIF.  A better educated and informed retail trade will provide more likelihood of an effective “ level playing field” so keenly sought by the ETRMA.

"Well, there are now just over 2 weeks to Christmas Day: ‘tis the season to be jolly!  We can look forward to this next 12 months, hopeful that the worst of the recession should be behind us, with a car replacement tyre business that should continue to be strong, and with the expectation of improvements in the replacement truck tyre market.  We have some significant challenges ahead of us, but with a continued desire to co-operate and support I am sure that we will enjoy together the fruits of meeting these challenges and of success within this market place.

"It remains only for me to wish you a Happy Christmas!"...................