Now in its eighth year, Continental Tire North America (CTNA) Inc.'s Gold Dealer Program is hitting its stride, helping the tire maker build its dealership and sales base in the U.S.
>From a few hundred dealers in the first year, the Gold Program has grown to 1,300 dealer members, and Conti anticipates adding 200 or more dealers to the roster before year-end, company executives said at the program's 2008 dealer meeting, held April 10-14 aboard a Royal Caribbean cruise ship sailing out of Fort Lauderdale, Fla.
Initially intended for dealers selling at least 1,000 units annually of Conti and/or General brand tires, the Gold Dealer program now comprises four levels of participation: Express-minimum of 300 units purchased annually; Standard (700 units); Select (1,200 units) and Elite (1,800 units).
The Express and Elite categories were added earlier this year, and already the company has signed more than 200 new dealers via the entry-level Express program.
To enhance the program and make it even more valuable to dealers, Conti executives said the firm will add features such as online training and tailored marketing support later this year.
The program enhancements will be available to Select and Elite category dealers enrolled in Conti's Real Performance Motivation (RPM) program, an online rewards tracking service.
In July, Conti plans to launch a three-pronged training program focusing on sales skills, product knowledge and new hires. Accessible through an online product called Engage 360, the program is designed to be intuitive, according to Jim Sicking, director of indepedendent dealer sales for the passenger and light truck division.
The marketing support function-which will offer dealers tailored demographic market data for their individual selling territory-is still in development, but Conti hopes to have it available by next year at the latest, according to Maria Deligiannidou, marketing intelligence manager.
This service will help dealers to better manage their inventories and ordering, she said. This in turn will help the Charlotte, N.C.-based tire maker improve its supply chain intelligence and lead to improved fill rates, Mr. Sicking said.
By enhancing the program's features, Conti hopes to solidify its relationship with Gold dealers, which in turn should result in increased business, according to Travis Roffler, director of marketing.
Sherri Templin, owner of Scott's U Save Tires in Steger, Ill., typifies the type of dealer CTNA is targeting with the Gold Program. While her dealership had sold some Conti products in the past, ``the Gold Program brought us into Conti in a big way,'' she said. ``Conti never was a big name in the U.S., but now it appears they are serious. I'm impressed with their team.''
While revenue generated by Gold Program dealers still trails that of Conti's business with larger distributors-such as American Car Centers Inc., American Tire Distributors Holdings Inc., Tire Alliance Groupe Ltd.-it's becoming a greater piece of the pie month by month, said Andreas Gerstenberger, executive vice president, sales and marketing.
If there was one common concern among dealers and distributors attending the event, it was fill rates.
``Dealers we service sell all the Conti tires we can supply them,'' said Harvey Birnbaum of MIC Tire in Queens, N.Y., a distributor member. ``But sometimes we just can't get the sizes most in demand.'' MIC makes daily deliveries to dozens of small repair shops throughout the New York City metro area, most of which don't have room to stock inventory, he said.
In their remarks to dealers, Messrs. Gerstenberger and Roffler outlined the efforts Conti is making to address fill rates and freshen the product portfolio. Mr. Gerstenberger noted Conti is in the midst of a $170 million investment plan at the firm's Mount Vernon, Ill., tire plant and that Conti's newest plant in the Americas, in Camacari, Brazil, is now operating at full capacity.
On the downside, he noted the Brazilian real/U.S. dollar exchange rate has changed enough since that plant went on stream two years ago to eat seriously into the profit margins Conti had calculated for that venture.
Conti also is investing in its plant in San Luis Potosi, Mexico, in anticipation of getting more supply from there. All these measures are meant to help CTNA reduce its dependence on European supply, Mr. Gerstenberger said.
Tony Talbert, product planning manager of light truck and winter tire lines, outlined Conti's plans for new products and expanded size portfolios. Over the past three years, he said, CTNA has nearly completely renewed its product portfolio to the point the company will be very close to achieving its target of 80 percent SKU coverage for both the Conti and General brands.
In the Conti brand alone, he said, CTNA has rolled out 525 new SKUs while retiring 289 older SKUs. In the General brand, CTNA has made available 246 new SKUs while phasing out 140, with 77 new SKUs due out vs. 29 being retired.
Dealers were advised of the official rollout of the company's newest product, the General Grabber HTS all-season light truck tire, developed for crossover and sport-utility vehicles, pickup trucks and full-size vans. The tire will be available initially in 38 sizes in 15- through 20-inch rim diameters. Conti plans to have 28 more sizes available by the third quarter.
The Grabber HTS is designed to combine style, comfort, durability and performance in a tire that offers pleasant road manners and a long life, as well as year-round traction, including in light snow, CTNA said. It is based on the firm's Grabber off-road competition tire but offers all-season traction and 15-percent lower rolling resistance compared with earlier generation Conti products in this segment.
The tire already is an original equipment fitment on Ford Motor Co.'s Expedition, and General Motors Corp. is evaluating it for fitment on the 2009 GMC Acadia, Conti said.
Tire Business Special Projects Reporter Bruce Davis can be reached at [email protected]