Kal Tire, Canada's largest retail and commercial tire dealership, has expanded into Ontario by taking minority shares of three dealerships there- J&M Tire International, Timmins Tire and Tire People-with 13 stores combined.
For Kal Tire, the move eastward into Ontario required rethinking its traditional methods of doing business-namely building new stores or purchasing existing dealerships.
``We've done very well with the old model,'' said Archie Stroh, general manager, ``but when this opportunity came up, we had to consider new ways of making it win-win.
``We've teamed up with some excellent operators with strong businesses that will leverage the best of both our worlds,'' Mr. Stroh said. ``We're a well capitalized, private company. We've now got more options to offer to dealers whether they want to sell their businesses outright or want to stay involved-but with the advantages of being a part of the Kal Tire system.''
For the forseeable future, there are no plans by any of the new Kal Tire partners in Ontario to rebadge their outlets, a Kal Tire spokesman said, or change their product offerings.
For J&M Tire, primarily a commercial dealership with one outlet in Oshawa, Ontario, the deal will allow it to expand its OTR and retreading operations.
``We needed capital to meet our growth objectives but wanted to continue to run the business,'' said Allen O'Reilly of J&M Tire, ``and with Kal Tire we got not only the capital, but a partner who can also share what they've been doing well so we can benefit from that, too.''
J&M of late has been expanding its business in the U.S. to complement its traditional Canadian sales base. J&M has developed its own proprietary OTR and solid tire retreading programs, called ``Polar Lug'' and ``Polar Solid,'' in addition to its Bandag truck tire retread plant.
Tire People is a 10-store operation in northern Ontario-including one store on the Quebec-Ontario border-that was created a year ago when several established local dealerships joined together.
Tire People's focus is a combination of passenger/light truck and commercial/OTR business, Kal Tire said.
``We wanted to keep operating independently,'' said Guy Desjardins, a spokesman for Tire People, ``and when we started talking to Kal Tire, we noticed lots of similarities. They're straight-shooters and totally focused on exceeding customer expectations. That was another reason this deal made sense.''
Timmins Tire in Timmins is part of the Tire People network, but also operates two stores separately, a Kal Tire spokesman said.
``There's nothing broken with our business model,'' said Jim Martin, principal owner of Timmins Tire. ``We pride ourselves on providing great service to our customers and have always been profitable. Now with Kal Tire as a partner, we're better positioned to capitalize on future opportunities.''
Kal Tire has more than 100 company-owned outlets and another 50 to 60 affiliated dealers throughout the western provinces.
Kal Tire markets the Bridgestone, Firestone, Michelin, Yokohama and Nokian brands, whereas Timmins Tire and Tire People are primarily Goodyear dealers.
Tire People also lists Michelin, Uniroyal, BFGoodrich, Yokohama, Continental, General Tire and Bandag retreading services on its Web site.