Micheldever Tyre Services has today confirmed its exclusive distribution agreement with Kumho Tyre will end by mutual agreement by the end of May 2018, bringing to an end a 15-year partnership in the UK.
MTS says the decision has been prompted by a ‘clash of long-term ambition’ for the Kumho brand in the UK.
CEO Duncan Wilkes said: “This is a disappointing conclusion to what’s been a longstanding and mutually beneficial partnership but is a decision we have taken in the interests of our long-term direction. For over 15 years, MTS has been largely responsible for the growth of the Kumho brand in the UK, reinforced by the performance of the independent dealer network. However, more recently, and particularly since Kumho established its own direct sales organisation in the UK, it has become increasingly difficult to work effectively in partnership with them.
“Kumho has a vision for the future and a view of what’s in their best interests in the UK that we do not share and that no longer allows us to adequately position the brand or support our Kumho dealers in the consistent and straightforward way for which MTS is known. This clash of long-term ambition has led to the decision to terminate our agreement.
“This means that over the next six months we will be transitioning out of the relationship and beginning to move our business and our customers’ business to other brands. We maintain and vigorously defend our multi-brand strategy in order to give our customers not just freedom of choice, but competitive advantage in their geography, and it this strategy that will allow customers to make this transition with ease.
“It is obviously a disappointment that we have not been able to find a mutually satisfactory conclusion, particularly in light of the support given by Micheldever during Kumho’s recent ownership and solvency challenges, but we have to be satisfied the brands we represent share our philosophy of building dealer partnerships that are founded in integrity and a long-term view.
“Our priority now is to protect our customers’ business and make sure their interests are taken care of. Over the coming weeks and months, we will be ensuring our customers have a stable market for the product, consistent supply and all commitments - including rebates, marketing support, ongoing incentives and pricing - are honoured as per current terms. We are hopeful that Kumho UK will also work to maintain this consistency and we will be doing our utmost on our customers’ behalf to secure this. Our agreement ensures that during the transition period we will have no change in access to Kumho product and no change to other aspects of the commercial relationship, so our customers will be able to make their decisions about which brand to move to in a considered way without need to change immediately. Our range of support, including Tyreclick - the only way for independents to get their fair share on the on-line business in their local area - as well as our other added value benefits will continue to be provided to all these customers to minimise disruption as they switch to one of the alternative strong mid-range brands within the MTS portfolio.”