Fintyre, attention to details the secret behind growth
Speed, depth of range, territorial coverage and the size of a European group: Francesco Carantani talks about the strengths of Fintyre and Franco Gomme
"We are delighted with how we are performing on the market, both our brands enjoy a strong identity, and our European approach will appeal to several manufacturers" says Francesco Carantani, CEO of Fintyre S.p.a. since last November, who expressed great optimism for the future of the group and for the results obtained. The two brands are Fintyre and Franco Gomme, both present with two distinct areas at Autopromotec 2019, where we met with Carantani.
Your presence in Bologna was rather conspicuous with two stands, how do you integrate the two brands in the strategy of the group?
Fintyre and Franco Gomme are our two commercial “souls”, two realities that we intend to keep separate because they have a different identity and a different approach to the market. They share a number of premium brands in their distribution points, but they differ in a few partnerships and exclusive distribution rights for specific brands, for example Fintyre has the distribution rights on popular brands such as Vredestein, Kumho, Ovation, while Franco Gomme can boast partnerships with the likes of Nankang, Falken, and budget brands such as Westlake and Windforce. In addition, the customer base has always been rather different, Fintyre has a medium-large customer base of tire dealers, while Franco Gomme supplies also other tire distributors not just tire dealers. So they have a fairly complementary market coverage. In addition, all that is back office, finance, administration and control, are integrated functions.
It is evident that you are focusing on services and digitization.
Surely, service is very important, our portfolio of products includes brands that allow us to respond to the specific needs of the customer, but we also sell premium brands that are available even to our competitors, so we set ourselves apart with the level of service, which is rather articulated. First, speed of service: we can cover 80% of the national territory twice a day, reacting quickly to the needs of the tire dealers. Furthermore, we can rely on over 30,000 SKUs (stock keeping units) in our warehouses, with a wide range of products that a smaller player cannot afford. Moreover, our territorial coverage is very wide, we have 11 warehouses in all, we have a warehouse in Sardinia, and we serve Sicily from our warehouse in Campania. All this allows us to have, in Italy, a 20% market share on the replacement market. This attention to detail and investment in services is clearly recognised and appreciated by the end customer.
Are you launching new promotional tools to facilitate customer loyalty?
We have a program, Pneusmarket Partner, that is a network made up of tire dealers who are particularly loyal to the group: we ask for loyalty, and in return, we offer convenient purchasing conditions, a superior level of service and marketing tools that allow them to be competitive in the market. One such service, recently launched, is Navads, a geo-location tool, so when you search for a tire dealer on your smartphone our partners are displayed as priority. We intend to continue investing in digitization, and in the future we will have new digital tools that will be available to our tire dealers, something that would be difficult for the individual dealer who is not part of a network like ours.
How is this 2019 shaping up for you?
We are happy with the response from the market, in a context of a weak demand in the first months of the year we are performing well in terms of volumes, we are growing, so we are obviously delighted. We have also increased the number of people covering the territory, which means that our focus on service and our attention towards our sales teams have resulted in higher business volumes.
What are your objectives for the current year and the coming months?
Definitely we are looking at consolidating this growth: in recent years we have grown significantly but not “organically”, taking over companies in both distribution and retail; now our goal is to consolidate what we have and use it as a platform for a comprehensive growth. In my opinion, working well, paying adequate attention to service and our sales force, and developing a strong go-to-market approach, we will grow capitalizing on what we have, without having to make further acquisitions.
What advantages does the relationship with the European company offer you?
A great advantage indeed! In recent years we have created a market leader in Italy, and in the last 18 months we have created another market leader in Germany thanks to a number of quick buy-outs, which have allowed us to consolidate three local players and create what is now the leading group in Germany. Being first in two important European markets gives us the needed credibility with tire manufacturers, who now consider us as an important partner in the Europe.
A topic that has been talked about a lot lately in the tire world is Fintyre’s transition to Cobat, for ELT collection.
We found a very reliable partner, who has a strong experience in other very similar areas, for example batteries, and although we first got in contact at the end of 2018 we quickly closed a partnership agreement. Cobat had already launched a first initiative but could not rely on a strong driving force like ours, so we expect that with our help they will grow significantly. On the other hand, they immediately started offering a good service with a positive response from the market, since they are collecting huge volumes with quick response to requests.
What is your view on the general situation of the Italian market?
One of the trends we are observing concerns all-season products, which are now growing by about 20% each year, eroding market shares from summer tires, while winter products remain fairly stable. What we expect is a stable market with a switch, which should last a few more years, between summer and all-season products. Another trend we see relates to larger diameters, something we had already noticed in Germany, where the average diameters are already larger than in Italy, and therefore we expect an alignment with trends that have already affected other European countries. New players are also entering the market and have quickly gained market share focusing on the price factor. In fact, we see a slight decrease for premium brands while budget products have grown slightly, though not a dramatic change. The Italian market, compared to others, tends to rely heavily on premium brands.
What changes have you observed in the industrial segment?
Excise duties have created a gap that was filled by second and third lines of premium brands, then we noticed that some Chinese brands have been replaced by other Southeast-Asian brands, coming from countries such as Thailand and Vietnam, which were quick to capitalize on this new gap to fill. Difficult to predict the future, but we believe that the next few years will still be strongly affected by excise duties.