Surplus tires dampen sales of branded items

Thursday, February 23, 2012

A DISTRIBUTOR of vehicle tires sees growth on the back of a healthy automotive industry. But, warned that the influx of surplus tires may pose a threat to the growing business.

“We see a growing business in Cebu with the increasing number of vehicle
registrations. Almost every day, some buys a car,” said Jedd Ryan Go, general manager of Macro Tires in a recent interview.

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According to data from the Chamber of Automotive Manufacturers of the Philippines Inc. (Campi), auto sales slipped four percent to 141,616 units last year from 147,488 units in 2010.

The auto sector expects to turn around this year and even grow by 10 percent.

Tire sales last year, on the other hand, grew by 20 percent.

Macro Tires, which is located along the national highway in Tipolo, Mandaue City, carries eight brands of tires. It distributes Yokohama and Goodyear, as well as other imported brands from China, Indonesia and India.

The store also sells basic spare parts, lubricants, alloy rims and engine oil among others.

Jedd Ryan said they ventured into the tire distribution business, seeing an underserved market in the auto industry. They initially targeted taxi-fleets and rent-
a-car operators.

“But now we are serving almost all types of vehicles,” said Judy Go, general manager of Speedy Tires Inc. a sister company of Macro Tires.

Macro Tires and Speedy Tires Inc. are owned by the Go family, who also owns and runs the retail chain Prince Warehouse Club.

“The replacement market is growing, which is why we are aggressive in promoting our products. The company hopes to expand the business through dealership,” Judy said.

The company has a strong network of 50 dealers in Cebu, Iloilo, Leyte, Negros and Bohol.

“Although we are not the exclusive distributor of Goodyear and Yokohama brands, our edge is our quality of service and affordability of our products. Macro Tires, for instance, has a customer lounge with Wi-fi connectivity,” she said.

Jedd Ryan said he hopes to add a car wash facility at Macro Tires in the second quarter of this year.

The Gos' optimism in the market is hampered by the influx of surplus tires.

“Surplus (tires) are supposedly banned by law,” Judy said. She said it is the big price difference that attracts consumers to buy surplus tires instead.

Jedd Ryan said a brand new genuine tire may cost about P3,000 while a surplus tire is sold at P700.

“Although, there is a huge price difference, buying a genuine and brand new tire assures you of the quality of the product,” he said.

Macro Tires was recently awarded by Goodyear Philippines as the national dealer for 2011, besting over 100 Goodyear dealers nationwide, during the Goodyear National Dealer’s Conference held last month.