Recent years have seen the commercial truck tyre market move in favour of the Independent dealer. Where previously the fleet sector was dominated by the Equities[1] - ATS Euromaster, Motorway/Hi-Q, National, and Central - the divestment and rationalisation that has taken place over the last five years has enabled the Independents to become significant players. In fact, at a recent market trends presentation, Continental Tyres estimated that the Independents are now responsible for nearly 50% of all tyres being sold to the market.

Supplying tyres to the truck fleet market, however, is big business and it takes a professional approach backed by a major manufacturer to get anywhere in the fleet business. Not only that, it takes a national, and ever increasingly, international approach to the market. That makes life difficult for the Independent dealer who cannot realistically deal with fleet business in all corners of the UK, never mind offer European cover.

The solution for the Independent is to join a tyre services network that can handle the approach to the national fleets and through its members offer national, or even international cover for fleet customers.

ContiNetwork, set up several years ago by Continental following its divestiture of National Tyres, is one such service network and forms Continental's primary route to market for commercial tyre sales and service. Interestingly, Continental is now the only service provider to concentrate its distribution solely on the Independent network. Something that is of great importance to the Independent dealer who could often find himself competing against a service provider's own Equity for the same business yet at different prices.

ContiNetwork has since established itself as one of the leading Independent networks and, according to Continental, services more national fleet business than any other Independent network. With 49 member companies - so-called ContiNetwork Partners - with some 200 tyre depots covering the whole of mainland Britain, its members are in a position to be able to deal with Continental's national and regional fleets alongside their own contracts.

Tyres and Accessories spoke to Barry Guildford, Continental's Commercial Marketing Manager and Jeff Book, Product Manager for ContiNetwork to find out more about Continental's tyre service network.

Business Benefit

The package ContiNetwork gives its members is more than just tyres. There has to be a competitive product certainly, but ContiNetwork works to develop relationships and build confidence with its members.

Barry Guildford, explains, "The whole ethos of ContiNetwork is about providing business benefits. It isn't just about selling tyres any more. In such a fiercely competitive market and with a number of good quality tyres out there, we need to find ways to enable our network partners to differentiate themselves and offer more value-added services.

"We are trying to address a cultural change. The tyre trade is set in its ways and can be slow to adapt. We want to help transform the concept of what the tyre business is about. There is more need for knowledge in the business to business sector where contracts are based on mileage and performance characteristics. Our aim is that ContiNetwork is innovative and the pioneer of this sector.

Exclusive territories

The philosophy of the ContiNetwork is to give the Independent dealer exclusive territories to offer expert service work to national fleet business delivered through the Continental national fleet team, as well as servicing regional fleet operators.

When fighting on a like for like basis for business the ContiNetwork Partner can be sure that locally they have no direct competitors with the same product or support. The exclusiveness overcomes the problem of self-competition. In return, Continental expects the ContiNetwork Partners to meet the high level of service and supply standards and to support the brand across the market.

Access to national fleet

The most obvious incentive for the ContiNetwork Partner is the opportunity to service and manage a national fleet contract they otherwise would not be able to compete for individually.

Continental's national fleet team is constantly active in developing new business for the ContiNetwork. "We feel ContiNetwork's success is reflected in the quality of the fleets being serviced by the Network", adds Jeff Book.

Breakdown service

The ContiBreakdownService gives ContiNetwork Partners the ability to offer Continental long distance hauliers a European breakdown package. It is easy to ignore the importance of the European aspect of contract cover, however, there is clear evidence that international haulage is increasing and that even smaller fleets are becoming involved in European haulage.

"Being able to meet a fleet's international requirements can be a great sales advantage for even the smaller Independent" comments Jeff Book. "Similarly, it gives the ContiNetwork Partner the potential to deal with European fleet customers in his territory, something most Independents could not reach on their own."

C2C - E-solutions

Continental also encourages its ContiNetwork Partners to adopt its new C2C package. This is an electronic solution giving Partners online access to inventory, ordering, delivery notes, invoicing and statements. It is a completely paper-free package that can make life much simpler for the dealer.

Barry Guildford comments, "We now have a core of Partners who have opted to follow the C2C route exclusively. We are bringing the commercial tyre world in line with the rest of the retail market. The first step is electronic purchasing though ContiOnlineContact. This helps fulfil our aim of being easy to do business with".

Affinity offers

The affinity offers negotiated by Continental on behalf of its Partners bring further benefits to the dealer. Offers include, for example, discounts with the tyre accessory catalogue company RL Automotive as well substantial discounts on new Mercedes Sprinter vans.

Barry Guildford adds, "We aim to give the Partners added value for their membership of the Network. Presently, our Partners benefit from favourable rates on tools, parts, vehicles and fuel and we are looking to expand these affinity offers further in the future."

Remoulding

"Tyre contracts today are not about supplying tyres," says Jeff Book, "but about maximising the mileage obtained from a tyre. This means supporting a tyre management programme which ensuresmaximum usage of the tyre over its life, i.e. regroove, retread and regroove.

All the key manufacturers have a remould offer and Continental is no exception. ContiNetwork Partners in the UK have access to both hot and cold cure retreads.

"We offer ContiRe, a hot cure bead-to-bead remould, and ContiTread, a cold cure remould", explains Barry Guildford. "Both ContiRe and ContiTread are important to our overall service package to the fleet market. In real terms, hot cure is still 60 per cent of the UK retread market and cold cure at 40 per cent."

Measurement & Management

Continental has a comprehensive range of Key Performance Indicators in place, which allow the management to focus on areas where service levels have dropped and take immediate action to improve the situation.

By focusing on these Key Performance Indicators and auditing the Partners, Continental places significant emphasis on the importance of the level of service offered to the end-user. This in turn provides reassurance for the end-user.

"We are only as good as the weakest link" comments Jeff Book. "Therefore we have stringent criteria we expect the ContiNetwork Partners to meet. Our Account Managers monitor performance through sales, regrooves, repairs, etc. The statistics are then compared across the Network and used to help others improve their performance."

Continental also brings the ContiNetwork Partners together at regular dealer forums and an annual conference. These forums allow Continental and the Partners to share ideas in a non-competitive environment, to discuss issues relating to the ContiNetwork that help improve the service levels and inevitably to mould the Network to benefit both Continental's needs and their own.

Conclusion

Of course, ultimately Continental's intention is that all these activities result in tangible benefits for the end-user.

"The ContiNetwork concept offers the end-user peace of mind," explains Guildford, "when he breaks down he can rely on getting a like-for-like product and service at agreed prices. We also offer a full technical back-up service, a dedicated technical helpline and there is a lifetime warranty on new tyre casings for manufacturing defects.

"It is important for us that the ContiNetwork Partners and end-users know that Continental is committed to supporting the product. It is good to have the reassurance that in the unlikely event of a tyre failing, there will be someone there to do something about it."

Continental firmly believes that the Independents will continue to grow in importance over the next few years, predicting that the market split between Equities and Independents will be around 35% and 65% respectively.

Barry Guildford finishes, "The ContiNetwork has been very successful for both Continental and the dealer. Despite moves in the market and the fact that all other manufacturers now follow a twin-track approach of having both an Equity and a tyre service network, Continental will remain loyal to its Independent dealers."

[1] Manufacturer owned tyre outlets