Of course this is positive, but to what extent is not clear.
They talk about an additional $118m in revenue and if that came from a handed over database of existing Dunlop customers, I would be encouraged.
But, if not, might there be sales cannibalisation occurring?
Perhaps it’s just me, because I could never see myself bouncing into a tyre place and saying ‘ Fit me with Dunlops or I am out of here’.
Equally, $118m in extra sales means nothing unless it generates profits.
now here’s the deal, why would NTD sell a set of Dunlops to one of their customers if the profit margin was way less than other brands?
So margin is important, but nothing has been said on this.
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