Car press

Extract :
News
Thursday 07 September 2006

Tyres are a product that few people imagined would be a viable candidate for on-line sales. The success of the visionaries who did have that faith and who did establish themselves has focussed attention on this sector and, in 2006, drawn in a multitude of new entrants. As a pioneer in the marketplace, www.pneus-online.fr has reached another milestone with this year's and 2007's expansion into Europe. To seal its dominant position in the market and stay firmly ahead of its competitors, the company has chosen the Mondial event to launch a resounding new innovation.

"The potential for selling tyres over the internet remains considerable".

Going back to the launch of your website in 2001, do you remember the mass of people who were dismissive of the concept, saying that tyres would not sell over the internet because the market was highly competitive and, more precisely, because there were not that many drivers who were capable of fitting their own tyres...

Oh yes. When I was starting out on this journey in 2001, I got a lot of dubious looks implying I would fail. The idea of selling over the internet first came to me as a purely personal observation. As a racing driver, I was very aware of the large part tyres played in my budget. When the Internet established itself once and for all as a reliable sales channel, I judged that it would be possible to use it to order tyres at highly competitive prices. And I was right, as our tyres are 30 to 50% cheaper than market price.

It was true that initially, the biggest obstacle to the success of my project was how to get the tyres fitted. But problems can always be solved. I put on my pilgrimage outfit and set out to convince garage owners and repair centres to agree to fit the tyres sold through our website, saying that the Internet was now an established fact of life, that its progress was irresistible and that, rather than viewing it as a competitor even if it was just that, they were better off profiting from the new mode of distribution and taking a share of the profits. I am not going to deny that a lot of distributors slammed the door in my face, but we persevered because there are always people out there who think in the same way you do. As a result, we now have 800 approved fitting centres in France which our customers can visit to have their tyres fitted. Better still, their tyres can be delivered straight to the centre of their choice. All they have to do is get their vehicle to the fitting centre once they have received confirmation of delivery. And when you see who these centres are, we can rightly say that we have won this battle because although quite naturally, the majority are car mechanics and service stations who see fitting tyres as an additional revenue stream and means of attracting extra customers they can offer and sell other services to, we have also managed to sign up established tyre fitters and service centres who combine selling their own products with fitting ours! And we are pleased to report that our fitters and centres are happy with our service and the profits they make from them and that they are now recommending us! They say to their customers, "If you visit www.pneus-online.fr, you will be able to buy your tyres securely and reliably for less". Now that's worth any amount of advertising and media campaigning!

In 2005, you started to expand outside France and this year has seen more expansion. What stage have you reached in your plans?
We are established in Germany which represents our biggest market outside France. We are also in Belgium, Switzerland, Luxemburg, Austria, the United Kingdom and Spain. This week sees us moving into Italy and, by the end of the year, Portugal. By the end of 2006, these markets as a whole will represent 10 to 15% of our overall turnover. The formula is the same as for France, namely that we sign up fitting centres who are able to take direct delivery of our customers' orders. Our expansion also involves broadening the range and type of products we offer. We are already distributors for the big brands like Michelin, Pirelli, Goodyear, Dunlop, and Bridgestone... In addition to light vehicle, 4x4 and utility vehicle tyres, in 2006, we introduced motorbike tyres and in response to some of our customers' wishes for products to look after their rims and vehicles, we now offer two lines of car care products on our site. This adds little to our turnover, but it is an excellent way of ensuring customer loyalty.

What figures did you achieve in 2005 and how do you see your performance in 2006? The tyre sector is highly competitive and there are a lot of new competitors in the marketplace intent on cutting into your lead. How are you going to stay ahead?
In 2005, we sold 60,000 tyres which equated to a turnover of 4.5 million Euros. We are expecting to sell 100,000 in 2006 and our turnover to reach 7.8 million Euros. This has been achieved with only 11 members of staff. I am proud of this result and am aware that we have an advantage over our competitors thanks to our experience and especially our reputation, our name. But as you say, the tyre sector is highly competitive and our success has triggered all sorts of initiatives, including on the part of existing "physical" players, those specialists already established in the marketplace. We intend to safeguard our position by expanding our geographical boundaries and in 2007, literally "attacking" other Continents. By the end of this year, given that our offer and our formula match the needs of small and medium sized repair professionals exactly, we will be implementing our tailor-made professional offer. Lastly, we intend to announce around the time of the Mondial event, a "coup" of European dimensions which will further consolidate our lead and is sure to appeal to our customers. That said, although the market is certainly competitive, it is far from reaching its limits. Big players in the on-line tyre market have recently been raising private funds and are preparing to float on the stock exchange whereas we are self-financing. This is proof that the potential is still enormous, but it is also a sign that the hardest battle is yet to come. We may be modest, but we have certainly raised the entry price into the market for our competitors. Bolstered by the success we have achieved in terms of our development to date, we have every reason to believe that we will remain a major player in the market in the years to come.

Extract : L'Argus - extracts compiled by Joseph GICQUEL - September 2006