Wednesday, October 28, 2009

Belgian triggers drift

       The target is Belgium national Benoit Henry, a major player at Continental AG's tyre division.And depending on whether he cooperates or not,Motoring contemplates using methods employed by Counter Terrorist Unit agent Jack Bauer to extract market share and sales volume information deemed critical in delivering this story.
       By the way, Henry is vice-president marketing &sales for Asia and CEO of Continental Sime Tyre, the latter being the Malaysia-based production arm of Continental for Asia-Pacific... just in case you thought this was some cloak and dagger thriller.
       You see, getting tyre makers to actually divulge their sales volume or market-share figures is on par with agent Bauer breaking a terrorist in the 24 television series.
       Stepping out of my reverie I shake hands with the 47-year-old executive who looks more the part of a GQ magazine model than a manager of Continental's tyre factories in Alor Setang and Petaling Jaya, in addition to heading marketing and sales teams in all AsiaPacific markets.
       So I suggested that the reasons for being tightlipped about market statistics perhaps stem from the notion that tyre makers are evading taxes, concerned about becoming a benchmark for their competition,or simply being humble!
       "No. It's not correct. The game we are in is a technology game. Others are playing catch up with us.
       "Our volume is Asia is still small, especially the knowledge of the Thai tyre market is limited which is why we need to get to know and grow our business here," he says.
       Continental claims that some markets offer transparent information on tyre sales in the form of national statistics, while some markets do not.
       "I don't know the exact numbers for Thailand, but it's about six million tyres in the replacement market.
       "Numbers are not everything. It's the image. Volume is only one element, and profit is the key. High performance tyres [sold in small volumes] can be good profit makers."
       Continental AG recently invested 200 million baht on a Thai sales and marketing unit to step up its presence here and perhaps send a clear message to the market.
       "It [message] has nothing to do with 200 million baht. We want to grow in our own way, in both the OEM and high performance tyre segments, build a quality network with products, products and products."
       Analysts have suggested the current dealership network operated by tyre distributor Stamford Tyres will eventually be phased out, and there'll be a gradual relegation of small independent distributors to megadealers or regular dealerships, just as most automakers are stepping up their Thai presence with investments in production facilities.
       But Henry was quick to point out the Stamford network was here to stay, while Continental's new network will multiply tyre sales.
       "We have a long relationship with Stamford. No conflict, no cannibalising. The sea is still full of fish."
       The picture of Continental's tyre dealership network in Thailand isn't clear for the time being. So, why this sudden urge or commitment to Thailand?
       "Thailand is a market that cannot be ignored. We are late, but Thailand is the centre of the automotive industry in the region and that is why we are here."
       Continental is no slouch in the global arena as it is the world's fourth-largest tyre maker and the number one brand in Europe.
       "In Thailand we expect to take 5% market share in three years. The major brands like Bridgestone and Goodyear won't give their business easily."
       Thailand's annual tyre market is estimated at six million replacement tyres and one million truck tyres;Continental expects to sell about 350,000 tyres in the next three years.
       Falling short of a confirmation, Henry did imply that Thailand was a strong candidate for Continental's tyre production expansion.
       "Our three plants in Asia-Pacific are not sufficient,and where next? The rule of thumb is that we follow our OEM customers."
       As mentioned earlier, Thailand is the regional hub for automotive export production and the largest onetonne pick-up truck market in the world; hence it is home to an abundance of OEM players.
       Someone informed the writer that Henry had 30
       minutes to make it from Centara Hotel on Rajprasong to Soi Asoke off Sukhumvit Road; Henry's appointment was with none other than the outspoken Henk Kiks of B-Quik Thailand, a bonafide Horatio Alger story in the local tyre and automotive quick-fix industry.

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