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Goodyear says rebound coming

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AKRON—Goodyear executives are optimistic about the future of the industry and the company's brand. “We're not just going to go into the future. We're going to grow into the future,” said Phillip Kane, vice president, commercial tires, North America during the 2014 Goodyear Dealer conference in Nashville, Tenn. He told Tire Business that in the commercial business segment the firm is looking for “a return to strengthen the replacement market” in 2014, “which will allow our replacement dealers some room to grow themselves.” Steve McClellan, president, Goodyear North America, added that when you think about the Great Recession and the years that followed, it has just been OK.” “There's been no big snap back in the general economy or in the tire business,” he said. Mr. McClellan said all the signs are out there for a rebound, including an increase in miles driven. “It's not if, it's just kind of when is it going to happen,” he said. “We wouldn't necessarily say we're predicting you're going to see the Big Bang in '14, but it's sooner rather than later.... But it's just not there yet.” Jack Winterton, president, consumer tires, North America, expressed a similar sentiment. He said stable fuel prices have miles driven going in a positive direction. He said Goodyear feels pretty good going into 2014, but that he does not think anybody is going to predict that it's all going to hit at one time. One sentiment that echoed through the speeches during the dealer conference is all of Goodyear's business segments are aligned and have one strategy. Mr. McClellan said he wanted to express to dealers that “our strategy wasn't really new, it was evolving. And kind of the way they should feel about us going forward. “The whole theme was, no matter what we're doing here, it's about the Goodyear brand and driving consumers or customers to our dealers' locations to do business with them.” He explained even when Goodyear is involved in different areas, the goal is to drive customers to the stores. “While we love to be in races, we're not just there to win, even though we'd like to, we're in (racing) to drive consumers to our dealers or our commercial customers to our dealers' outlets,” Mr. McClellan said. All segments are aligned toward the dealers. Mr. Winterton agreed, telling Tire Business: “We all have the same basic philosophy.... Invest in the brand. Build the brand.” He said that is all a part of the targeted market segmentation concept Goodyear has. Obviously the segments differ in the varying parts of the business, but all parts use that concept and are growing segments of the market that require investment and are growing faster than the industry and Goodyear wants to be there. Mr. Winterton said being first with its customers is important to all segments in Goodyear. “It's something that we truly value, all of us.” Mr. Kane added, “It all kind of comes together at the point-of-sale,...where Goodyear is aligned through our network and in creating the best possible experience that we can for our mutual customer, which is the end user.” He said whether it's a consumer or a fleet on the commercial side of things, Goodyear wants to keep “the promise that we make to that end user.” Mr. Winterton said Goodyear's brand and programs “drive the demand.” He said the company has to find the right business partners to capture the demand. Fulfilling the demand is “having the right tire in the right place at the right time; and it all comes together at that point-of-sale.” Goodyear announced advancements to its Tire & Service Network during the meeting. There are three levels of membership to the program: base, plus and premium. Prices for U.S. dealers are $675/month for premium, $550 for plus and $335 for base. Canadian dealers have similar pricing at $675 per month for premium, $595 for plus and $300 for base. Goodyear said the bulk of independent tire dealers in the program have a base membership. “A series of enhancements planned for this year will add even greater value,” Mr. Kane said. A key feature for each level of membership is the dealer websites and search-engine marketing assistance. For 2014, any dealership, at no additional charge, will get a company website with its logo or name featured on the website header. The site includes localized content for the store's geographical area. Goodyear said while this service is free in 2014, that may change in the future. Goodyear also plans to help dealers claim their Google+ pages. Other new features for all levels include an exclusive towing program, on-hold messaging subscription, toll-free TSN dealer locator and Goodyear tire wall and digital menu board and digital price tags. One of the biggest changes to the program is the addition of the Commercial Tire & Service Network program. “The consumer side of our business blazed the same trail several years ago with the Goodyear Tire & Service Network,” Mr. Kane told dealers at the conference. Thus far, there are1,300 locations in the Commercial Tire & Service Network program. The crossover utility vehicle (CUV) market is an area that continues to grow in the industry and Mr. Winterton said Goodyear attacks the market in a number of different ways. He said Goodyear's Wrangler SRA and the Assurance FuelMax had double-digit sales growth combined last year and both have CUV sizes in it. Mr. Winterton said many of the company's premium tires also have CUV sizes and are doing well. The OE market is another segment he said Goodyear continues to grow in. He said the company continues to go after different fitments and that has worked well. “I think our hard work and what we call the 'OE selectivity' model...is going to start paying off here in the future. And already has started in some replacement lines.” Mr. Winterton said Goodyear feels good about its position in this market and what it will be doing going forward. The winter tire market saw a bump up from previous years after the snowstorms of the 2013-14 winter season. “We had a very good (winter) tire market and also I would think our customers would say the same thing,” Mr. Winterton said. “They had a lot of inventory carry over from the year before so that's all past history now.” He said while there is a place for the all-season tire no matter where people live because a dry climate can change to a wet climate very quickly, there is still a market for the winter tire, especially with new vehicles. Mr. Winterton said the premium tire market is where the company is seeing great growth because people want the peace of mind of having four new winter tires that have “the traction capabilities that you really need in snow.” He added, “It was a blur for a while and I think we're starting to see it spread back out and I think it's because of the new vehicles.” He said he saw with his own vehicle that he was very grateful he had winter tires on it this winter season. Mr. Winterton said the Kelly brand is still a focus for Goodyear, noting it is “slated mostly for the economy segment” and is a well-known brand that customers like. “Even though we didn't announce anything new this year, stay tuned. We will continue to invest in that brand.” Mr. Winterton added that 2013 was good overall for Goodyear and the firm “grew greater in the marketplace among our contemporaries, so that just tells you about the value that people are willing to pay for tires out there....”

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TB Reader Poll

Previous | Published March 18, 2019

Where can you expect to see the most growth in 2019?

Tire sales
46% (34 votes)
General automotive service
15% (11 votes)
Brakes, shocks and other undercar services
7% (5 votes)
Add-on business
15% (11 votes)
Anywhere we can get it.
18% (13 votes)
Total votes: 74
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