Michelin backs down on online selling plan
Michelin has suspended its OnSite Mobile Retail program just over a year after it was launched. The decision was made after finding its test market in Raleigh, North Carolina, didn’t do as well as expected.
Michelin OnSite was launched in August last year as a service enabling consumers to buy tires online or by phone from Michelin and have them installed at a place and time of their choice. A Michelin spokesperson confirmed the program had been suspended but said the company would “continue to evaluate future possibilities, as the test revealed a number of interesting options.”
“While we are disappointed that unit volumes did not meet expectations, we’re pleased with the enthusiastic response we received from consumers who want a concierge approach to purchasing tires,” the company said.
A message now displayed on the Michelin OnSite website states that the service is no longer being offered and that customers should contact Michelin with any queries.
Michelin’s BFGoodrich program ‘still expanding’
The suspension comes just months after Michelin launched a similar service in Charlotte, N.C., selling BFGoodrich-branded tires direct to customers, who could then have them installed by ‘local service partners’. The move angered tire dealers across the country, several of whom spoke to Traction News and spoke of feeling “angered” and “betrayed” by Michelin’s new program.
Many tire dealers balked at the prospect, saying Michelin was now competing with their own vendors by offering lower prices and potentially angering tire customers. Dealers said they would not include standard extras such as wheel alignment and oil changes like they would with new tire purchases from their own stores.
Michelin said the BFGoodrich program was not affected by the suspension of Michelin OnSite and plans were still on track to expand it regionally before the end of the year.
Tire dealers not impressed
Direct Tire owner Barry Steinberg, who spoke with Traction News about his disappointment in the BF Goodrich program in August, said it seemed Michelin had been trying hard to “maintain their market share with these obscure and unrealistic initiatives.”
“Mobile OnSite is probably the most difficult thing to do, even with a local infrastructure that they just do not have,” he said. “The programs that they want to launch nationally is to have us, the retailers, become installers and not sell tires anymore. They do not understand that this is a bad program for us because it takes away all of our cash flow which is what we pay our employees, taxes, vendors, utilities etc. For them to pay us a commission to just mount and balance their tires is not going to happen.”
Customers ‘will lose out’ in the long run
Both Stein and other tire dealers predicted that many in the industry would refuse to sell Michelin and BFGoodrich-branded tires and few would take up the offer of becoming ‘local service partners’ and install tires they were not selling.
Steinberg argued that customers will lose out, or face paying even more for their tires in the long run. This is because the free services tire dealers offer when tires are bought from them will no longer be included in the price.
“If you bought a tire from me today, I’d fix your flat tire for free,” Stein said in reaction to the BF Goodrich program. “I would check the alignments for free. I’d give you a rotate and balance every 6,000 miles for free and that goes along with the purchase.
“If you get tires shipped in here, you’re basically on your own. You’re going to pay me for a flat repair, you’re going to pay me to rotate and balance your tires and you’re going to pay me to check your alignment. The consumer will lose out in the long run because the maintenance is going to cost them more money, the flat repairs are going to cost more money and if there is a recall, for example, they’re going to have to deal with Michelin, not me.”
Michelin isn’t alone in trying to break into direct online selling to customers; Goodyear did the same in 2015, although tire dealers Traction News spoke to say the demand for the installation of Goodyear tires sold direct online has been negligible.