[GTO]

These guys are huge! Over 3,500 outlets in 32 countries.

Point S, a US-based tyre retailer, has entered India as part of its global expansion plans. The company has opened its first showroom near Infopark here, featuring all the renowned international tyre brands. It also plans to set up outlets in Delhi, Goa, Punjab and Maharashtra.

The aim is to increase the number of showrooms to 100 by 2020, said Adrian Smiechowski, International Business Development Director, who inaugurated the Kochi showroom. Point S currently has 3,500 showrooms across 32 countries, and sold 16 million tyres last year.

Source

After the announcement of the launch of Point S in Malaysia, Point S conquers a new market in Asia, namely India.

In this 1.3 billion inhabitant country, Point S concept will be implemented through Master Franchise Agreements with three regional partners who will be covering 5 of the most dynamic States: Deviate Enterprises for the Nation Capital Territory of Delhi and Punjab; GIAAN International for Maharashtra and Goa; and Tyrekada for Kerala. At mid-term Point S aims at covering more Indian States through an extension of the existing partnerships and nomination of additional Regional Master Franchisees.

In 2017 more than 25 stores will be converted to the Point S CI and concept, at mid-term the network should cover the 5 States with over 100 points of sales. With a replacement market of approximately 17 million passenger car tires and a significant truck market in radialization process, Point S sees a lot of potential in this tremendous country. Point S is also in process to open a National representative office, namely Point S India, to coordinate and support the development of its network in cooperation with its local partners.

Fabien Bouquet, Point S International CEO comments: “The Indian market faces major changes and Point S wants to take this opportunity to implement its concept and become at term a major retail player in the country. The car equipment ratio in India is one of the lowest in the world (20 cars for 1,000 inhabitants) but is constantly growing, which means opportunities for a tire and car maintenance network. As an example the tire market will grow by 10% each year in the 5 coming years.”

Source

[OrangeCar]

Point S is making the right move.

1. Market is ripe. It is only going to get bigger. More will own cars.
2. Currently, most tyre retailers are standalone or with few shops in a chain. Most of them locally owned.
3. Most customers don't do adequate research or go by word of mouth in their purchase. Many end up with bad experiences. Such a brand could bring in a benchmark for delivery in product/services.
4. Its entry will only bring in more competition. Local players will have to pull up their socks. Plus, could bring in more organized retailers. More competition, happier customers.
5. Hopefully, this will be single stop shop for tyre products + tyre services + after sale warranty issues.
6. Branding could help novice customers to not depend on local outlets and head to relatively risk free outlets.
7. Will ensure genuine products and not fake tyres with brand names embossed.

I believe Point S should get the early mover advantage too, provided it keeps up with quality of products offered and services delivered. And I hope the Franchisee model works out for them and does not go like, say the Mc Donalds way (burger gaint had issues!) in NCR.

[libranof1987]

Wow, these guys are huge in terms of presence and scale.

Bodes well for the customer of course, especially if there is a multi-brand one-stop shop. There are reputed ones in most metro cities already and competition means good news for the end user.

As advertised on their website, they claim to offer the lowest price. So, they will play on price initially until they grab a noteworthy market share, or make a dent to begin with. Their current large presence will allow them the deep pockets for the start.

But if there's one thing we've learnt: no one wins a price war.

[i74js]

The sector was definitely looking forward to consolidation and entry for organised operator. The market liquidity, continuous increase of vehicle population and non-professional operation of local players with inconsistent quality and brand availability is a major concern in tier I and tier II cities.

Entry of a large player will certainly bring in discipline, which is required for different class of buyers. Point-S can also channelize supply of specific tyres required for premium cars and high end motorcycles for which either the owner is struggling in general or pays through the nose at the car dealership.

A very welcome change and indicates maturity of Indian auto sector making it conducive for international players to come and participate.

[blackwasp]

What is going to be the long term model? If the initial dealerships / shops are company owned and later on they move to the franchise model, I will expect a quality drop. Expectations will be higher once experienced from them and not sure if others (franchise partners) will be able to match it.

This is also one of the reasons I prefer to goto small neighbourhood shops who have been here for a while and I know the guy since a while. A month or two back, I got one tyre of the Punto changed and the card machine was not working. When I insisted on trying again, the owner simply said "Its futile to try again, you can transfer it later to my account at your convenience."

He might charge at par or times more than brand shops, but then the other small things do matter.

[itwasntme]

Great! A lot of the tier 2 tyre shops shamelessly fleece their trusting clientele by passing off inappropriate or old or used tyres as brand new.

This should provide a transparent and VFM platform for any buyer to walk in and purchase the best tyres suited to his vehicle and budget.

[GeeTee TSI]

Really hope they treat the alloy wheels like part of the car, rather than part of the tyre which can be tossed around by uninterested and busy novices. I still have marks and gashes on my alloy wheel despite the shop I went to having tyre removing equipment

[GTO]

Originally Posted by OrangeCar

Market is ripe. It is only going to get bigger. More will own cars.

There's definitely a world of opportunity! Will be interesting to see though how they handle it. Multi-brand product & service providers are few & far between in the automotive space, and of those who are there, some have been a hit (e.g. Mahindra First Choice) and an equal number have flopped (e.g. Carnation).

Originally Posted by libranof1987

As advertised on their website, they claim to offer the lowest price. So, they will play on price initially until they grab a noteworthy market share

Tyre companies will guard their prices IMHO. They can legally / illegally control the supply to Point S. The big guys won't want to anger their existing retail network.

Originally Posted by blackwasp

If the initial dealerships / shops are company owned and later on they move to the franchise model, I will expect a quality drop.

Franchisees can maintain a top level of quality if strict monitoring is in place (like how Maruti maintains its dealer network, as an example).

[Red Liner]

Originally Posted by GTO

Tyre companies will guard their prices IMHO. They can legally / illegally control the supply to Point S. The big guys won't want to anger their existing retail network.

These guys will have master global services agreements with almost every single tyre manufacturer on the planet. The Indian tyre manufacturer arm will have almost nothing to do apart from making sure their orders are being met as per the global sla (master service level agreement). They will have local agreements, yes, but they will follow the global masters.

[autorahul]

Anybody visited their Ludhiana or Kochi outlet? What are the rates and the services offered?

[Red Liner]

One other thing is, i expect guys this size to offer true value close out sales on tyres older than 2 years for instance. They will have biggish stock on board, and they will be more open to offer deep discounts on tyres that haven't moved off their shelves yet.

Hope they do motorcycle tyres too.

[MNITDEVIL]

Anyone on TBHP who has bought from these folks or visited their facility in Delhi?

[AMG Power]

Their future will depend on whether they become a Maruti or a Volkswagen.

The key differentiator between a good tyre shop and a a bad tyre shop lies in the skill levels of the technicians to a large extent.

It's not as if Point S will be selling something that your neighbourhood tyre shop doesn't sell.