Why International Tire Brand Agents Are Sad

“In the past few years, foreign big brand tire dealers have had very bad days in China.”

Mr. Yuan Jianmin, deputy general manager of Sifangyuan Trading Co., Ltd., Taiyuan, Shanxi Province, recently spoke about this in several exchanges with the Tire World Network.

As an agent of the Dunlop brand, in 2017, he was plagued by problems such as “poor profitability” and “tire roasted seeds and nuts”.

Recently, on these two issues, Yuan Jianmin explained his views to Tire World Net.

Domestic tire brands are even more "profitable"

It is reported that the prices of international brands such as Dunlop, Michelin and Goodyear are very transparent compared to Chinese tire brands.

In the eyes of the original Jianmin, this is like a double-edged sword. While providing benefits for consumers, it also brings confusion to dealers.

"In the repair shop, many car owners use their mobile phones to check the prices of tires on the e-commerce platform and use them as a basis for bargaining." Speaking of this phenomenon, Yuan Jianmin felt helpless.

According to reports, compared with these major international tire brands, some domestic tires seem to be able to "make tire shop owners get more profits."

Tire World Net understands that this profit is mainly caused by two kinds of "opaque".

In order to occupy the market, low-end tire companies often use "price wars" as a means of competition.

Through the process of competitive companies competing for bargaining, the tire shoppers who received the goods got more benefits.

At the same time, due to the small reputation and low brand recognition, many domestic tire products do not have the opportunity to enter the e-commerce platform.

Car owners cannot understand the true price of tires through the Internet and are at a disadvantage in bargaining.

This asymmetry in information also makes many tire shop owners "profitable."

As Dunlop's agent, he often visits the former Jianmin of the tire store and has seen many similar examples.

In his view, this type of profitability will not last long, and tire store management will eventually become more formalized.

Yuan Jianmin said: "The role of our agents is to lead the tire shop to sell the most suitable tires to the most suitable owners at the most suitable prices."

"Roasted goods" makes it difficult for agents to survive

"Roast oil" is a term used in the tire industry.

Many merchants sell tire products to tire stores across the country at low prices, seizing the market and squeezing dealers' living space.

In major cities such as Beijing, Jinan, and Zhengzhou, it is not uncommon for tire dealers to bite their teeth, but they have no alternative but to revenge.

In 2017, the widespread “roasting” act has made a large number of well-known tire brand agents difficult to survive.

The original Jianmin joked: "Of course, only big brand tires have the opportunity to be fired."

In comparison, Dunlop and other international brands have greater influence, greater liquidity, and quicker return payments, which have become high value-for-money products in the eyes of speculators.

It is reported that there are some sources of speculators in the industry that come from the dealers themselves.

For many dealers, failing to complete business indicators is a problem that has to be faced.

Many speculators specifically target this batch of unfinished business indicators, but the prices given are relatively low.

Because of cash checkouts and shipping pressures, some tire dealers have no choice but to compromise.

The low-cost stocks of speculators turned their tires to increase their prices and sell them in another area, which in turn squeezed the living space of dealers in other regions.

According to Tireworld.com, at present, there is a gradual competition trend among tire dealers.

This kind of competition forced them to force their distributors to lower their prices, which further reduced the space for tire dealers to survive.