Michelin Retread Technologies Inc. (MRTI), hoping to expand the sales of retreads from its franchisees, is opening up the distribution channel for Michelin retreads to dealers who sell new Michelin truck tires.
To effect the strategy, MRTI has created a Michelin Retread Associate Dealer Program, which allows Michelin new-tire dealers to sell and service Michelin retreads and tap into MRTI's marketing support. Up to now, only MRTI franchisees were authorized to sell retreads produced by MRTI shops.
The new program could expand MRTI's distribution network to as many as 1,500 points of sale from 200, the subsidiary of Michelin North America Inc. said. Dealers who join the program would get access to MRTI services, such as shop and vehicle identification; technical support; product and sales training; and inclusion on the Michelin Web site locator.
``The increasing demand for Michelin retreads is an excellent growth opportunity for new tire dealers,'' said Randy Clark, vice president of marketing for Michelin Americas Truck Tires, in a prepared statement.
``The Michelin Retread Associate Dealer Program is a great way to offer the complete line of Michelin commercial products-both new tires and retreads-that fleets are demanding,'' he added.
MRTI is launching the associate dealer program at a time when demand for Michelin retreads is rising. Michelin claims the combined sales of retreads by MRTI franchisees for the first nine months of 2002 were up 16.4 percent over the same period a year ago, while the overall market for retreads was down 1.1 percent.
There are 24 MRTI franchisees in the U.S. and Canada operating 44 plants; included among these are 13 shops operated by Michelin's own Tire Centers L.L.C. subsidiary.
Meanwhile, MRTI reported that it has snagged a two-year contract to supply retread tires to nearly 3,000 fleet vehicles for electric utility Alabama Power.
The power company, which supplies electricity to about 1.3 million customers in the southern two-thirds of Alabama, runs a fleet of about 1,900 passenger and light trucks, 840 heavy-duty trucks, 1,000 trailers and 30 off-road vehicles.
The contract took effect Nov. 6, according to MRTI.
``Alabama continues to be an excellent source of market growth'' for MRTI, said John Rice, chief operating officer of Michelin Americas Truck Tires.
Michelin has made no announcement as yet regarding a replacement for the MRTI franchise in Alabama, where McGriff Industries Inc. allowed its franchise to lapse as it takes over a number of Bandag Inc./Tire Distribution Systems activities there.