ORLANDO, Fla.—Independent tire dealers will play a significant and vital role in Goodyear's struggle to become the world's largest tire maker by the year 2000. That's the overriding message delivered by Chairman and CEO Samir Gibara and other Goodyear executives at the firm's 1997 dealer conference in Orlando, Feb. 9-12.
Goodyear, which ranks third in worldwide tire sales behind Bridgestone Corp. of Japan and Group Michelin of France, hopes to regain the No. 1 spot it enjoyed before these two competitors took to the acquisition trail nearly a decade ago and greatly expanded their global tire sales.
And in order to accomplish this objective, officials said, Goodyear is counting on dealers to widen its lead in North America while it pursues expansion on a global front.
``Our mission calls for Goodyear to regain its rightful position as the undisputed leader in the tire and rubber industry. And our mission calls for North America to be the centerpiece of our global strategy for leadership,'' said Mr. Gibara.
Moreover, he added, ``I want to assure you that our independent dealers continue to be the leading component of Goodyear strategy in North America.''
Later, during a news conference, Mr. Gibara said the company's once-controversial expansion into other non-traditional distribution channels, such as mass merchandiser Sears Roebuck and Co. and Discount Tire Co. Inc. of Scottsdale, Ariz., is largely completed.
``So if we want to grow, it will be with our base; and our base is—and will remain—with the dealer organization,'' said Mr. Gibara. "That is why we have developed programs to support their expansion."
Among these efforts, he pointed out, is the company's Blue Ribbon Program, which over the last two years has provided financial assistance for the expansion of 167 Goodyear dealerships in total and added 100 more dealer locations to Goodyear's distribution network during the last 12 months alone.
Another similar effort is the company's ``Competitive Action Program,'' which offers financial incentives to dealers for switching over to Goodyear from competitive brands. To date, that program has helped convert more than 120 former competitive-brand outlets, company officials said.
Goodyear's first foray outside its traditional base of independent dealers and company-owed stores five years ago touched off a storm of protest. But dealer dissatisfaction resulting from that move has largely abated, officials said.
Eugene Culler, executive vice president of North American Tires, said Goodyear wants to ``dominate'' rather than simply lead the North American tire market—the world's largest.
Vice President of Sales and Marketing Marco Molinari said the company's greatest strengths lie in having ``the strongest brand name, most innovative technology and product development team and the best distribution system in the industry for getting its products to consumers.''
But it was Goodyear's Vice President of Replacement Sales Edward Gallagher who provided statistics to back up the company's contention that its dealer organization once again is on the march.
Since 1994, he said, Goodyear dealers have increased their cumulative share of Goodyear's consumer tire business in the U.S. from 59.2 percent to 64.3 percent. In 1996, he said, Goodyear dealers sold 2 million more of the company's passenger and light truck tires than the previous year, increasing sales of the Goodyear brand by more than 18 percent while the industry as a whole was growing at a more modest 5.5-percent rate.
At the same time, dealers' share of the company's medium truck business also continued to climb last year, accounting for 75 percent of Goodyear's replacement sales.
Independent dealers accounted for 93.7 percent of the company's replacement farm tire sales last year; and Goodyear retreaders since 1992 have improved their market share by 23 percent.
In view of such accomplishments, Mr. Gallagher said, it's easy to understand why executives are praising Goodyear's dealer network as ``the envy of the industry.''
Mr. Culler told dealers that Goodyear is testing two new retail formats in the Buffalo/Niagara Falls, N.Y., area to determine whether changes should be made in its present store format.
The first of these new formats, All Systems Go, is ``sort of an update of the traditional Goodyear franchise outlet,'' Mr. Culler said. Similar to the tire maker's 800 traditional company-owned stores, All Systems Go outlets carry only Goodyear-brand tires while offering a full line of automotive services. However, they make more extensive use of computer technology and direct mail advertising to suggest such services to customers on the basis of automakers' recommended service intervals.
In the second new format, Tire Max, tire productivity is the driving objective supported by a limited selection of undercar services, Mr. Culler said. An outgrowth of the Just Tires format introduced by Goodyear in 1990 and still under evaluation, Tire Max is designed to appeal to customers looking for fast tire installation and low prices. Such outlets carry Goodyear and the company's Concorde associate brand tires.
Mr. Gibara said Goodyear is thinking of redesigning its present retail store format to meet changing consumer needs. If successful, these two new formats will be deployed by the company elsewhere in North America and offered to dealers. Goodyear's objective, he said, is to have fewer but larger retail outlets that sell more tires. The company last year closed about 100 unprofitable stores in the U.S.
At the same time, it began phasing out all 120 of its company-owned stores in Canada, offering such outlets to Canadian dealers wherever possible.
Unlike their counterparts in the U.S., Mr. Gibara said, Goodyear's company-owned outlets in Canada were not vital to its tire distribution system and therefore not of the same strategic significance.
The Canadian stores were losing money. So the company decided to get rid of them, he explained. And by the end of this year, he added, Goodyear will be completely out of the retail market in Canada—at least on paper.