Agenda
- Trends and developments in the automotive tyre and service retail industry relating to Mavis Tire
- Competitive positioning and demand outlook across services, including potential impact of shift to EVs (electric vehicles)
- Profitability amid material supply concerns and technician shortages
- Medium-to-long-term outlook
Questions
1.
What 2-3 key trends or developments have you been following in the automotive tyre and service retail
industry as it relates to Mavis Tire?
2.
How has the industry performed through the pandemic? Could there be longer lasting or permanent
impacts?
3.
How has Mavis been able to outperform its peers, as you suggested?
4.
What are your thoughts on the competitive landscape? Where is Mavis positioned? Which players should we compare it against?
5.
Could you walk me through Discount Tires’ acquisition of Tire Rack, announced in December 2021? How might this impact Mavis and its competitors? How are they reacting?
6.
What typically drives relationships with suppliers?
7.
Do you expect more vertical integration? Are there tie-ups or targets that make sense in the industry?
Might Mavis be considering doing the same thing?
8.
What are the characteristics of the winners and losers in this environment? Which players do you think
possess those characteristics?
9.
What does Mavis typically want in its acquisition targets? What is the average timeline for an acquisition to be optimised and integrated into the system?
10.
What are the unit economics of an average location? What are the typical CAPEX requirements and startup costs?
11.
Has there been trouble around labour in this environment? How is Mavis thinking about that?
12.
How does the labour shortage impact the unit economics of locations? Is it basically decreasing locations’ ability to service cars and volume and revenue are reducing? Alternatively, is it eliminating some costs and they’re getting better profitability from the issue?
13.
There will be an education curve or a technician problem around electrification. How is Mavis approaching
the situation? Do you think the company can do this successfully? Are other players doing things better or
worse?
14.
You mentioned the Icahn location in Brooklyn and the pop-up model. Do you expect these EV [electric
vehicle]-only locations to perform well? Is it too early? What’s your outlook on those EV locations?
15.
You mentioned the Tesla barrier. There’s been a sense that service locations for Tesla, appointments are out the door and impossible to get. Do you think it will have to relinquish some of that control over its car servicing? How might the company approach that? Will other OEMs [original equipment manufacturers] leave their existing model in place, or might they start trying to control their service as well?
16.
Which brands stand out as potential partners that Tesla could target in the aftermarket segment?
17.
Could you quantify the life cycle of a tyre under an ICE [internal combustion engine] vs an EV? You
mentioned EVs are likely to wear down the tyre tread quicker, given the torque and the weight of the vehicle.
18.
What are your thoughts on the latest miles driven trends and the impacts on Mavis? Has work from home
been a potential threat to structural demand?
19.
You mentioned the tyres are coming 70% from China and the rest from Europe. Did you say the other most profitable service or part is the brake rotor?
20.
Are those brake components 100% sourced from China?
21.
Could you outline inventory levels across channels?
22.
How has pricing evolved over 2021? How might it trend in 2022 across tyres and services and parts? What are the major impacts of inflation on the business model? How much cost can be passed onto customers?
23.
What is the best and worst-case scenario for Mavis over the next 12-18 months?
