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Conti: Dealers benefiting from increased capacity

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GULF OF MEXICO—Continental Tire the Americas L.L.C.'s executives said recently the firm's $1 billion-plus investment in capacity expansions, including a new plant in Sumter, S.C., is paying off with improved supply and fill rates to U.S. dealers.

“Our supply has gotten significantly better and I think you're starting to see it, especially in the key lines for us,” Jim Sicking, Conti's director of sales, told about 250 dealers attending the Conti Gold Dealer meeting onboard Royal Caribbean's Jewel of the Seas in the Gulf of Mexico, April 15.

“We are in the best supply position we've been in in six years. It's significantly better. I will emphasize, though, not perfect. We know we still have a ways to go there,” Mr. Sicking said.

Even though the Sumter plant is still under construction, Conti has plans to add more passenger/LT capacity in 2017 or 2018. Dealers can expect to see tires coming from the plant early next year, he said, as the plant construction is ahead of schedule.

Meanwhile, the company has moved much of its OE capacity to Europe from the U.S. When the European economy recovers, the capacity will be in place when demand increases there, he said.

Also during the meeting, Conti officials introduced an all-season General Altimax tire and enhancements to its Gold Dealer program.

The Altimax RT43 all-season tire, replacing the Altimax RT launched in 2007, will be available in 44 T- and H-speed-rated sizes and carry a 75,000-mile treadwear warranty.

The tire has an RTM (replacement tire monitor) feature that incorporates letters molded into the center of the tread that wear down to read “replace tire” at 2/32nd inch and VAI (visual alignment indicator) technology that uses a series of sipes on the shoulder to indicate uneven wear due to an alignment condition.

The new tire also was constructed with patented Peak Anti-slip Sipe Design for snow and ice grip and Low Surface Abrasion technology to help reduce distortion in the tread pattern as it rolls through the contact patch so as to help reduce heat build-up and wear, according to Conti.

The tire, which will be formally introduced later this month, will be available in August.

For Gold dealers, Conti said it wants to focus on its core dealers by increasing volume bonus payouts, allowing all replacement tires in the Conti/General portfolio to count toward volume bonuses and provide year-end payouts to dealers who may have missed a quarterly quota but attained their yearly objective.

To focus on and direct potential customers to its core dealers, the company officials said, Conti has removed mass merchandisers, such as Sears Holdings Co. and Wal-Mart Stores Inc. from its Conti dealer locator website.

“Our goal is to get as much of the business as we possibly can to your front door,” Chris Jenkins, Conti's national program manager, told dealers. “Our focus is on our core dealers. That is our focus for 2013. We want to do as much as we possibly can for you and get as many people in to the door as we possibly can for you.”

The company said it is boosting its social media marketing efforts this year to improve brand awareness for both the Continental and General brands in the U.S. market.

Conti, which provided all the tires used in the upcoming “Fast & Furious 6” film, will tie the movie to in-store and online promotions May 13 through June 10. When customers buy four qualifying Continental-brand tires, with a retail value of $499 or more, they will receive a $100 Adidas gift card. Adidas America Inc. is a marketing partner with Conti for soccer sponsorships and Conti's rubber traction technology is used in about 30 styles of Adidas-brand footwear.

The promotion will be supported by magazine ads and in-store POP materials. Conti also will conduct social media promotions tied to the movie starting April 24. Conti Facebook fans will receive daily alerts for 21 days to visit a special web page to answer daily “Fast & Furious” trivia questions and earn points for prizes. Dealers and their staff are eligible to participate in these sweepstakes.

On the sports side, Conti is continuing its sponsorship of the Grand-Am racing series, which includes hospitality events at certain racetracks, while also taking on the exclusive tire supplier role for the American LeMans Series (ALMS) Prototype Challenge Class.

Next year Grand-Am and ALMS will merge into the United Sportscar Racing series and Conti said it expects to be “heavily involved” in the unified series, which is expected to draw combined crowds.

On the social media front, Conti reported that it so far has 193,000 Facebook fans for the General brand and 173,000 fans for the Continental brand. Conti conducts a monthly Facebook sweepstakes for a set of tires.

“We have put a major effort on this and we are heading toward 1 million (Facebook fans),” said Travis Roffler, Conti's director of marketing.

Twitter fans number more than 10,000, predominantly driven by the company's involvement in Grand-Am, whose drivers are very active in Twitter, he said. The company's Twitter account offers followers a Q&A session with its tire engineers every two weeks.

“There's a lot of great PR buzz going on around our social media venues. We're putting a lot of effort and energy towards that so ultimately, as you can see on our websites, is to get them to the website and drive them to your stores. We want them to find that dealer, find you, and buy products from you,” Mr. Roffler said.



To reach this reporter: kmccarron@ crain.com; 330-865-6127.
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