It has been almost a year since Ben Hoge headed Goodyear’s operation in Malaysia as Managing Director.
A brief background on him would definitely help our readers to know him better. Hoge was Goodyear Benelux Finance Director in 2010 and was later promoted as Finance Director of Goodyear EMEA, Commercial Tires. He played a key role in the Commercial Leadership Team involved in the development of strategy, improvement of planning/processes and overall business development. In 2014, he was appointed Goodyear Benelux Managing Director, during which he led a team of 130 associates and set new record in sales and tyre volumes that year.
The Tyreman had an exclusive interview with Hoge recently to cover his immediate focus areas, strategies, challenges and market trends.
The Tyreman: Could you provide us an update on the current state of the Malaysian Passenger Car Radial (PCR) tyre market – the influence of the economy, ringgit’s depreciation, Goods and Service Tax (GST) and other trends?
Hoge: The Malaysian market is relatively mature, with a relatively high number of vehicles (passenger cars and commercial vehicles) per person. For some years, the consumer sentiment is influenced by international political and economic instability, accelerated by the GST introduction and lower ringgit’s exchange rate to inflate cost of living and reduce purchasing power.
We also see the consumer credit being tightened by the banks, constraining consumption further.
The trend of more ride sharing services is changing the dynamics of car ownership and use.
The Tyreman: What influences do these trends have on the PCR tyre market?
Hoge: We have seen a decline in demand for tyres in the replacement market as well as lower demand from car manufacturers as vehicle sales had dropped in 2016.
Consumers are becoming more price sensitive by switching to cheaper products and compromising on quality, safety and performance.
The Tyreman: What is your immediate focus since taking up the Managing Director’s post?
Hoge: My immediate focus since assuming office in 2016 has been our go-to-market model, the innovation of our product portfolio and investment in our capabilities and capacity.
Recently, we renovated our office facilities, featuring an open office environment to foster stronger working relationships among associates and creating a strong team that excels at working ‘at the intersection’.
The Tyreman: How’s the feedback and market acceptance of the recently launched Wrangler TripleMax. Any new product launches in the near future?
Hoge: The Wrangler TripleMax tyre, which caters to the growing midsize SUV market, has been very well received since we introduced it in September 2016. The tyre is a good alternative for customers seeking fun driving experiences without compromising the safety aspects; we have received feedback that the Wrangle TripleMax is decent in handling Malaysia’s unpredictable weather and road conditions.
Recently, we also introduced our latest ultra-high performance tyre, the Goodyear Eagle F1 Asymmetric 3 that caters to the premium sports car segment. Thus far, the response from the market has been tremendous and excited over the Eagle F1 Asymmetric 3 to the extent that we have been receiving enquiries both onground (at our retail outlets) and social media as well!
As for new products, we may be introducing a new tyre to the market but I am unable to provide more details for now. However, it would be an exciting product and we couldn’t wait to introduce this to the Malaysian market soon.
The Tyreman: Could you tell us the development of the PCR distribution channels – distributors and dealers. What is the current status? Which are your target areas for expansion and why?
Hoge: We are distributing the tyres through key partners in Malaysia to all relevant channels. We focus on tyre retailers and car dealers. We work with the right partners who are ready to bring Goodyear’s innovation to the market.
We believe we could improve our distribution in both channels. Our sales team is working closely with the aligned distribution partners in our approach to tyre dealers. Of course we have our own Goodyear Servitekar and Autocare retail network. This has always been an important pillar of our sales strategy.
The Tyreman: Recently Goodyear set up a brand new look for its Autocare centre. What are some of the differences compared to existing Autocares? What is the target or plan to upgrade the other Autocares?
Hoge: Established since 1979, our Goodyear Servitekar and Autocare network has around 198 outlets nationwide today, as we continue to expand and upgrade to better serve the needs of our customers throughout the country with a one-stop professional tyre and car-care centre.
To redefine our customer’s experience, we recently rolled out a new Goodyear Autocare outlet concept that combines impactful visuals, comprehensive products and service offering and modern outlet design to make tyre purchase an enjoyable and memorable experience in our outlets.
The new outlet concept would also include installation of state-of-the-art service bays and comprehensive automotive service kits to provide customers with a differentiated automotive care experience.
The Tyreman: How is the competitive scenario right now? What impact would the increase in regional activities (setting up production plants) from brands like Westlake, Linglong, Maxxis and Apollo have on the market? They are mid-range brands but major players globally.
Hoge: We have seen many new brands entering the Malaysian market and expect more to come in the near future with Chinese import tariffs being reduced. This may have an impact on the average price in the market. On the other hand, the interest of many new brands in Malaysia is a testimony to the attractiveness of this market.
The Tyreman: What is Goodyear’s opinion and approach to the recent growth of multi-brand franchise shops like Tayaria, Hoof, Velocity and Car-Home?
Hoge: The multi-brand franchise is a good platform for consumers seeking to compare and enquire on brands of similar product category before making a decision. These outlets come across to consumers as a brand-neutral centre compared to brand-specialised outlets such as Goodyear Autocare or Tyreplus.
We believe that each channel could help to improve and enrich the tyre business in Malaysia. As long as they are focused on providing service and supplying quality products.
The Tyreman: What are your plans for 2017 and the challenges that you are facing?
Hoge: Our plans are to increase our product offering within the Lux Sport and SUV segments and the general focus is on larger rim diameter variants to offer a wider selection in the premium tyre segment. We would also continue to invest in Goodyear Servitekar and Autocare centres to offer a holistic consumer shopping experience.
The challenges are the increasing competition in the value and mid segment, the rising cost of living and fluctuation of the ringgit that may impact consumer spending, prioritising cost of tyres instead of looking at quality, as well as higher cost of raw materials.
The Tyreman: What is Goodyear’s prognosis for the market in the next couple of years and where would the main opportunities and threats in the market be?
Hoge: We expect Malaysia’s passenger car tyre market to grow moderately in the next 5 years because we believe that the fundamentals of the Malaysian economy are strong. On top of that, we expect high growth in specific segments like premium sport and SUV tyres. In general, we expect strong growth of tyres with larger rim sizes. More and more automobile manufacturers are opting for larger rim sizes in their models line-up, spurred by a growing demand in the market here and the APAC region.