GREENVILLE, S.C. (Jan. 23, 2002) — Michelin North America Inc. will discontinue its nearly 3-year-old Maximum Value Policy (MVP) pricing program for the BFGoodrich Radial All-Terrain T/A KO light truck tire, effective Feb. 1.
The highly-publicized MVP program established minimum pricing for the tire and its predecessor, the All-Terrain T/A, to prevent dealers from selling the product below cost and to restore profit margins. Michelin is ending the program because “it worked,” a company spokeswoman told Tire Business.
“(MVP) did what we wanted it to do, which was put the value of the product in line with the price of the product. That's happened, and now we can move on,” she said.
Under the policy, Michelin pledged to drop any dealership that sold or advertised the All-Terrain T/A KO below the minimum price or sold the tire to entities other than retail consumers. The Greenville-based tire maker also promised to audit the sales records of any dealership it suspected was not abiding by the MVP program, though the spokeswoman said most dealers kept the policy's pricing standards.
She said the company does believe the pricing points established by the program will hold after it ends as both dealers and consumers have realized the value of the product in the past few years.
When asked about the risk of warehouse clubs selling the All-Terrain T/A KO below price, the spokeswoman said: “We'll have to see what happens. We obviously wouldn't (end MVP) if we didn't think it had a very, very high chance of success.”
The tire maker does reserve the right to reinstate the program if it becomes necessary, she said, “but that's not the plan. The plan is for (MVP) to go away.”