En Englais: Goodyear distributor in Mexico has lofty goal

By Stephen Downer, Special to Tire Business

MEXICO CITY — Llanterama Hidalguense S.A. de C.V., a Goodyear dealer — “distribuidor” in Spanish — in Mexico since 1987, plans to almost double its market share in the next two years.

According to Llanterama co-founder Felipe Lezama, the chain of nine full-service stores has 8 percent of the market where it operates — on the northern edge of Mexico City.

“My goal is to have a 12-percent market share by the end of 2016 and a 15-percent share by the end of 2017,” Mr. Lezama told Tire Business in a telephone interview.

Asked whether he plans to open more outlets in Mexico, Mr. Lezama — a senior Goodyear México staffer for 22 years between 1965 and 1987 — indicated that such a move was a possibility. But he added that the prohibitive price of land close to where the outlets are located made consolidation his more likely course of action.

“The goal is to recover the market share we have lost,” he said, alluding to the 1970s and 1980s when Goodyear Mexico had a 25-percent share of a protected national market.

The Llanterama premises are in the state of Hidalgo (its headquarters are in state capital Pachuca) and in the heavily industrialized municipalities of Naucalpan, Tlalnepantla, Ecatepec and Atizapán — all four of which are in the neighboring state of Mexico. Mr. Lezama described the area as having “the most expensive real estate in Mexico.”

Asked how Llanterama would grow, he said: “We have a very aggressive pricing policy for retail and wholesale tires and we do a lot of advertising in local media.”

He explained that the company has a full-time marketing department that also devises special promotions and eye-catching exterior advertising at the company's stores.

“All our stores are strategically placed on main roads,” he said.

Despite there being 500 tire brands on the Mexican market, according to Mr. Lezama, growth opportunities abound. He added that Goodyear is a “very prestigious brand” — along with Dunlop and Kelly from the same stable — and is more than capable of competing in a cut-throat tire market environment.

Mr. Lezama, whose four job titles in Goodyear Mexico included that of manager of industrial product sales in Central America and assistant head of advertising and communications, refers uncomplainingly to the large volume of cheap tires flooding the country from Asia, courtesy of extremely low import tariffs.

“The government's policy is to have a product that is as cheap as possible for the consumer, and when the offer is lower than the demand, prices fall. It's a situation where we dealers have to adapt. We have to sell quality, high volumes and service.”

An open market, Mexico-style, is preferable to that of Brazil, which is closed to competition, he said, adding: “I prefer a market where I can compete.”

Mr. Lezama also said that Martín Rosales, Goodyear Mexico's president and managing director, has lifted the Goodyear brand in Mexico through a strategy of introducing more products to the market “at better prices.”

The manufacturing plant that Goodyear is building in the city of San Luis Potosí, 260 miles northwest of Mexico City, will also make Goodyear more competitive in the country, Mr. Lezama said. “They'll be producing 10,000 tires a day, which will help combat cheap imports.”

Goodyear expects the San Luis Potosí plant to be operational by July 2017.

Mr. Lezama was president of national tire dealer and renovating plant association Andellac (Asociación Nacional de Distribuidores de Llantas y Plantas Renovadoras) in 2007-2009.

Stephen Downer is a Mexico-based freelance writer who covers that country and Latin America for Tire Business and its Latin America e-newsletter.