Last year was like a roller coaster ride for us”

Last year was like a roller coaster ride for us”

To what extent has the corona crisis shaped the tire industry?
Michael Saitow: The corona pandemic has developed from an unwanted stress test into an accelerator of digitalization in the automotive industry. Buyers noticed that on a B2B platform there was delivery stability even during the Corona crisis, in contrast to local wholesalers, for example due to Covid cases. During the pandemic, the sellers realized that they had to break away from the old structures and do something to keep the business stable during the pandemic. The opportunities for regionally operating companies to acquire new customers and develop markets are limited. Classic local business sectors in particular are often characterized by structures that have grown over many years with regular suppliers in the area. The given proximity and a strong feeling of trust in the supplier determine the relationship here. However, further strong growth cannot be expected with such sales structures. What is needed are sensible and low-investment alternatives to complex eCommerce implementations and offline expansions. One option for B2B-oriented manufacturers and retailers are online B2B platforms such as Tyre24.

So there has already been a rethink towards increased use of digital channels in B2B?
From my perspective, the answer to this question is clearly “yes”. As far as we know, the Corona situation that has existed since spring 2020 has also influenced purchasing in the automotive industry. On the one hand, it is more difficult for traditional retail, which is heavily focused on personal contact with customers, to maintain existing processes. On the other hand, workshops have adapted to the changed conditions due to changed conditions in business interaction and increased motivation to save on purchases in order to improve profits. It is often heard that the corona pandemic acts like a magnifying glass that shows many deficits even more clearly or accelerates change processes. In my opinion, this also applies to the automotive aftermarket.

How did Tyre24's business go in general and especially in Austria in 2020?
Last year was like a roller coaster ride for us. Before February, we had very ambitious plans for 2020. In the first few months immediately after the coronavirus hit, we thought, like many others, that the world would end. Then, around Easter, sales returned to the levels we had hoped for. It  would be wrong to say that we are emerging from the Corona crisis as winners, but we can say that we have not suffered. We haven’t lost anything in Austria either. My personal conclusion is that the market is going through big changes and that the difficulties in supplying from local wholesalers during the Corona period probably benefited us because the workshops had to find alternative sources. This applies to tires and even more so to spare parts. In Europe, there were markets where we tripled our spare parts sales compared to 2019. We see great potential in spare parts. It is not a seasonal sector and the transparency is even more interesting because the margins and the price differences are much, much, much higher. In general, we grew by 5 percent on the tire side in 2020, despite the Corona crisis and the generally negative market situation. On the spare parts side, we grew by 40 percent overall. In Austria, tire sales have remained stable and the spare parts sector has grown by 30 percent.

And what do you expect for 2021?
We have various topics related to our core business in the automotive aftermarket on the agenda for 2021. In addition to consolidating our position in the German tire business, which is important to us, we want to further stimulate growth in foreign markets such as France, Italy and Austria. To this end, we want to develop the Netherlands and Belgium and Poland as “source markets” for tires and spare parts. What will also be crucial for us is how the Corona situation develops in the countries. After the extremely strong development in 2020, we want to continue to expand the automotive spare parts area in the coming year. This involves the introduction of new platform functions such as a cross-portal shopping cart or the further development of our brand worlds for manufacturers as well as the development and expansion of the OE parts portfolio as well as special categories such as oils or tools. We also have to face the increasingly intense demand for additional eCommerce services such as fulfillment or market intelligence.

So further growth?

I assume that through the planned initiatives we will not only be able to activate more existing Tyre24 customers as buyers, but also win new customers for our portal through the attractive offer. In addition, we would like to enter into further partnerships with wholesalers and manufacturers in order to further advance the business and get closer to our ambitious goals. I am convinced that we can offer a very attractive environment for market players and be an exciting partner in digital sales. In the coming year, eCommerce in the aftermarket will continue to grow rapidly and put offline players under pressure. As in the B2C trade environment, the question will be less about “whether” and more about “how” one should participate in online trading.

TireCologne 2021 has been canceled. How do you see the future of trade fairs?
Personally, I hope that the trade fairs come back soon, they are very important for building and maintaining relationships. Face-to-face meetings are important, even fundamental. Relationships are also one of Tyre24’s success factors. To buy from a website you have to have trust, but it's easier to trust people than websites. It's important to understand each other and the culture when doing business. I'm not a fan of the digital trade fairs that are currently flourishing, but these days you have to put up with it. Another question is what the trade fairs of the future will look like. Nobody knows, but one can assume that they will be smaller, probably regional. In Germany, some suppliers even set up company trade fairs some time ago. Maybe there will be a Tyre24 trade fair in the future.