The Hindu Business Line : Goodyear India changes retailing strategy

Retail plans
50 shop-in-shop format branded stores by 2006-end; 250 more by end-2008
To invest Rs 50 cr for setting up 300 shop-in-shop retail outlets
First six to be rolled out in Chennai on Aug. 24, 12-15 stores in the North, South and West regions and 3-5 in East region

NEW STRATEGY: Mr Antonio Capellini, MD, Goodyear India Ltd, at a press conference in the Capital on Tuesday. — Kamal Narang

New Delhi , Aug. 22

Goodyear India has decided to change tack on the retailing strategy for its passenger car tyres in the Indian market. Convinced that the Indian tyre consumer has virtually rejected the `exclusive' format stores, the company said on Tuesday that it would now adopt `shop-in-shop' retail format to consolidate presence in the replacement market.

To start with, the company would set up 50 shop-in-shop format branded stores by 2006-end and at least 250 more by end-2008. "We will invest Rs 50 crore for setting up these 300 shop-in-shop retail outlets," Mr Antonio Capellini, Chairman and Managing Director, Goodyear India, said here on Tuesday.

The first six such stores would be rolled out in Chennai on August 24, followed by 12-15 in the North, South and West and 3-5 in the East region.

Goodyear does not use the shop-in-shop format in the Americas, where exclusive stores continue to be the preferred retailing format for the tyre major.

Mr K. Mahesh, Sales and Marketing Director, Goodyear India, said that the number of Goodyear `exclusive' stores had shrunk in the recent years from 200 to about 15. He, however, said that these 15 exclusive outlets would continue to retail Goodyear products and would not be wound up.

The new format

A shop-in-shop format is somewhat diametrically opposite to an exclusive format store, as in the former the Goodyear range would be available to a customer along with other branded tyres. Under the new shop-in-shop format, Goodyear tyres would be available in a specially designed outlet that would be located within a multi-brand outlet of a tyre retailer.

All the new shop-in-shop outlets of Goodyear would be air-conditioned, have international look-and-feel interiors and attractive range-based display, utilise computerised software for easy access to tyre information and carry prominent branding. Goodyear's space in the store-in-store format would vary in size between 400 and 900 sq ft.

Mr Capellini said that the new shop-in-shops would also offer customers a range of value-added products and services, not offered in any tyre outlets in the country today. He said that Goodyear India has entered into tie-ups with other brands for providing car care products including car perfume and tyre shine under the same roof.

Increasing production

By 2009, Goodyear India expects to double its production capacity for passenger car tyres from 4,500 tyres per day to 10,000 tyres per day. Mr Capellini said that an investment of Rs 80 crore has already been made into its Aurangabad facility for increasing the production capacity.

Stating that the current retail environment was cluttered and had very little standardisation, Mr Mahesh said that there was huge potential for upgradation of overall customer experience and claimed that the new shop-in-shop would provide a creditable shopping option for the Indian tyre consumer.

He pointed out that India was one of the fastest growing markets for passenger cars. Last year alone, more than 40 models of cars were launched in the country.