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Van Tyres: Tyres can wheel in extra profit

Building LCV tyre sales can add profit and bring in new business to dealers that too often focus solely on cars.

But tyre replacement opportunities for LCVs are more achievable than for its car counterparts, said James Bailey, Goodyear Dunlop communications manager.

“It’s actually easier for LCV dealers than car dealers. There’s a much smaller range of tyres to sell for LCVs. Van tyres are also quite a bit smaller.

“From a stocking point of view the product will be available as you need it,” added Bailey.

To build sales of tyres for the LCV market, it is important to look at those that are passing through retailers’ service bays, said Dave Croston, Continental Tyres general sales manager - car dealer.

Vans that are in warranty may still need replacement tyres and traditionally this business is passed through the original franchised dealer to tyre specialists.

Croston said: “By monitoring tyres that come through the workshop, the service desk can begin to advise customers on tyre maintenance and when they need a new tyre. This is the first step to increasing tyre sales.”

He added that it is important to properly advise on tyres and raise awareness of the fact that the dealer sells tyres. When changing LCV tyres, drivers can be educated on safety issues as an added value service.

“A lot of LCVs and vans have a higher load rate than cars,” said
Bailey. For example, supermini vans have the same tyre size as a car but the load rating will be different.

Here is an opportunity for an LCV dealer to offer something that a local fast fit may not have in stock.

Continental and Goodyear Dunlop wouldn’t put a figure on profit opportunities, but one dealer estimated a bottom line of 10-15%.

Margins are “easily achieved” with a little extra attention to the detail of tyres, said Croston. Bailey argued that “profit depends on volume and additional services offered.”

Mobile tyre fitting is a great profit opportunity for dealers as you can charge an appropriate price based on the service and not just product. Whether it is worthwhile depends on volume.

But there is certainly more of a requirement to do mobile tyre fittings at the roadside or a customer’s premises for LCVs, as van fleet operators need to minimise the time that their vehicles are out of action.

But Croston said it is more important in the first instance to concentrate on the business that is curr-ently walking out through a dealer’s doors.

“Getting the core service right and then maximising on customers that are already in the service bays is the way to really grow the share of the business,” he added.

Tyre manufacturers don’t tend to offer support programmes specifically for LCV tyres but Goodyear Dunlop said it would
consider the population of vehicles in the catchment area of the dealership before advising on stock requirements. 

Continental can provide support by means of an implant tyre technician or by appointing a tyre champion who brings together all the elements of tyre sales.

Practicality is key for LCVs. As a working tool, it’s essential to minimise the downturn by addressing a van driver’s needs as much as possible.

Croston said: “It’s especially important with vans to have the tyres a driver needs when he needs them. It’s no different to what a car driver expects, except a van off the road is money down the drain in terms of jobs lost.

“Any dealer that can offer a quick and helpful service will reap the benefits.”

Evesham Tyre Centre - Case Study

Profit margins for LCV tyre replacement are around 15-20%, said Phillip Preston, manager at Evesham Tyre Centre in Worcestershire. While bottom line is more for car tyres, perhaps 20-30% depending on manufacturer, Preston said work on LCVs is a key line for new business.

“If you supply van tyres for a company and they see you do a good job, then staff will bring their own cars.”

Preston estimated about 30% of business is from LCVs, with the vehicles coming in for tyre changes on average every eight to 10 months, depending on mileage.

Fleets are willing to spend more money on a tyre which will give longer mileage. Although the range of LCV tyres is expanding, it is much more likely that the necessary tyres will already be in stock compared to the wide range needed for cars.

Evesham Tyre Centre also offers a mobile fitting service, which is free locally.

Blackcircles Online Discount Tyres - Case Study

Blackcircles, an online discount tyre retailer, offers a different proposition for dealers. With warehouses scattered around the UK stocking numerous brands of tyres, it delivers to partner garages only once a customer has made a request for a specific tyre.

This misses out on emergency tyre replacements, but it can keep workshops’ stocking needs to a minimum.

Around 1,000 franchised fitters work on retail and fleet business. Its fleet business tends to be companies with 100 or less vehicles, although Blackcircles has a contract with one fleet which has 250,000 vehicles on its books, around 30% LCVs.

Dealers are paid a fee for fitting tyres, based on a tiered structure, which includes consideration of how difficult a particular tyre is to fit.

Mike Welch, Blackcircles managing director, said dealers already selling tyres might not make significantly more money fitting a tyre from Blackcircles, but the knock-on business meant partner garages had increase revenue.

However, Welch added that its fees ensure healthy margins and labour rates for dealers.

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