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Conti taking 360º stance on commercial segment

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LOUISVILLE, Ky.—Continental Tire the Americas L.L.C.'s commercial tire business has begun developing better synergies with other vehicle-technology units of German parent company, Continental A.G., in a move to deliver lower overall driving costs to fleets.

The company is calling this new program Conti360º.

“We'd like customers to think of us not as a tire manufacturer but rather a provider of the 'lowest overall driving costs,' which is our truck brand promise for fleets worldwide,” said Paul Williams, executive vice president of commercial vehicle tires for Conti in the Americas.

“Through our approach that integrates safety, economic and environmental factors, we can tie in all of the products and services that Continental provides and directly impact 30 percent more of a fleet's direct driving costs than we can provide by tires alone.”

Mr. Williams unveiled the new strategy during a press conference March 20 at the Mid-America Trucking Show in Louisville.

Standing on a podium backed by Conti's new commercial marketing trailer, Mr. Williams also revealed that the tire maker will revitalize its truck tire portfolio over the next four years with products designed with Conti's third-generation technologies and feature a new naming convention using the numeral 3.

As part of this announcement, Mr. Williams also introduced the second product in the new line, the Hybrid HD3 drive tire, which allows fleets to use the same tire in line-haul or regional applications. The Conti EcoPlus HD3 was released last summer and was the first new tire in the line.

Alex Chmiel, Conti's brand and communications manager, said the tire maker listened to its customers in designing the new tire. They asked for fuel efficiency when on the highway and the durability and extended mileage when they are on regional roads, he said, but it's impossible to change tires repeatedly depending on the usage.

“Our new Conti Hybrid HD3 addresses the needs of this evolving segment in order to provide the best of both worlds from one all-new truck tire,” he said.

The Hybrid HD3 offers the fuel-efficiency and SmartWay approval of a long-haul tire as well as the mileage and traction needed for regional use, Mr. Williams said.

All of Conti's third-generation truck tires will feature casings of the same tread width, saving fleets and dealers, as well as retreaders, time by not having to search for the correct size new tire or casing to retread.

“A fleet can buy a trailer tire or a new trailer with one of our HT3 trailer tires on it, and then when they come to retread it, they can retread it to a full-width drive tire,” he said.

This is a savings opportunity for fleets, “because they are not having to buy a different-size casing to meet their retreading needs.”

Regarding retreading, Mr. Williams said Conti's new retreading program, ContiLifeCycle, will continue to grow, with an additional six licensees, including the first in Canada, expected to be announced in the next few months.

Demand was so high last year for ContiLifeCycle products, he said, “we had to stop signing dealers because we basically ran out of capacity.”

Conti, which launched the LifeCycle Concept in March 2011, produces its ContiTread precured treads at a plant in Morelia, Mexico, where annual capacity has been expanded fourfold since the opening to 1.2 million treads, “which hopefully will see us out the next couple of years,” Mr. Williams said.

He added that demand for ContiTread units has been so high in Brazil, the company is looking to install capacity there, as well.

In addition to the six licensees in North America, Conti added three ContiLifeCycle franchisees in Brazil in March and expects to add a location in Ecuador in April and another in Mexico City in May.

Conti also kicked off sales of the ContiPressureCheck tire pressure-monitoring system for commercial fleets. (See sidebar at right.)

To further help deliver lower overall driving costs to fleets, Mr. Williams said Conti will double the size of its customer service organization in the U.S. and Canada to six individuals from three and increase “our sales force by 20 percent” or 17 people in the U.S.

“The fleet's need advice, they need our support,” he said.

To aid in this effort, Conti is arming its commercial sales force and customer service personnel with iPads loaded with information to aid them in working with a fleet.

“The idea here is, this is a mobile selling tool and service tool, so when you are in front of a fleet you don't have time to boot up your laptop,” Mr. Williams said. “You've got to be mobile.”

Worldwide, Conti also will be investing in its tire manufacturing capacity. In the course of the next two or three years, the company will expand its manufacturing footprint by 22 million additional units. And there are plans to add one new tire plant every year for the next nine years.

Two are under construction, a $320 million passenger and light truck tire plant in Kaluga, Russia, and a $500 million passenger and LT tire plant near Sumter, S.C.

In developing its Conti360º strategy, Mr. Williams said Conti benefits from its relationship with other Conti automotive divisions, including Chassis & Safety, Interior and Powertrain and ContiTech.

“Working together with these sister divisions allows Continental Commercial Vehicle Tire to provide more of what today's fleets need—a partner for their operations,” Mr. Williams said.



To reach this reporter: dzielasko@ crain.com; 330-865-6131.
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