Discount tire on line

TROY, Mich. -- Kmart will begin selling Oct. 1 an exclusive line of Michelin tires in its 991 stores that operate auto service centers.

The brand tire move will come just four months after Kmart began offering Kelly-Springfield brand tires to supplement its Uniroyal and Bridgestone brand offerings.

Kmart gave up its private label tire lines two years ago in favor of branded tires. Uniroyal and Mohawk had made them.

Michelin owns Uniroyal, while Goodyear Tire & Rubber owns Kelly-Springfield.

The new line of Michelin, all-season radial tires, called XLE, will be Kmart's top of the line tire offering. The tires will be 75 and 80 series tires designed for domestic cars, full and mid-sized. The 75 and 80 series are designated for passenger car touring.

A Michelin statement announcing the deal stated that "initially" the Michelin XLE will be available only at Kmart stores," leaving open the possibility that other mass merchants eventually might carry it.

Details on pricing and the number of skus to be carried are still being worked out, a Kmart srokeswoman said. But the pricing is expected to be comparable to that of the XH4 line, Michelin's standard line for indpendent tire dealers, she said.

The spokeswoman dismissed as "industry rumors" talk that Kmart is unhappy with the Bridgestone brand and eventually-would like to phase it out.

Developing a special line of tires for discount stores fits into Michelin's strategy of trying to Cover every class of trade without offending independent dealers, who still own 51% of the tire replacement market.

Mass merchants, including Kmart, Wal-Mart, Sears and Montgomery Ward, control a 19% market share, estimate Modern Tire Dealer, while warehouse clubs hold a 7% share.

In May, Michelin introduced its X Radial line, a high mileage line with a distinctive tread design, exclusively for warehouse clubs. So far, Sam's Club and Pace Membership Warehouse have taken on the X line.

Last month, Kmart began offering Kelly-Springfield tires, a less expensive brand priced about $5 to $8 a tire below Uniroyal, a store salesman said.

In a previous mass merchandise brand development in April, Sears began carrying Goodyear tires in addition to its RoadHandler private label offerings.

In a budget tire offering, Wal-Mart last year began carrying Douglas tires, an intermediate brand between national and private label, of Kelly-Springfield, to supplement its General tire offerings.

"More and more tire manufacturers are realizing they must get a foothold in the mass merchant segment of the distribution system if they are to maintain--let alone expand--their share of the U. S. tire market," reported the June issue of Kovach Tire Report, an industry newsletter published by Modern Tire Dealer.

Out of 2,377 Kmart stores, 991 operate auto service centers and stock tires, while about 410 Wal-Marts out of more than 1,750 operate service centers.

Kmart said it placed an initial order for 200,000 Kelly tires and expects to sell about 1 million Kelly brand passenger and pickup truck tires a year. That would amount to about 40% of the 2.5 million replacement tires it sells a year.

"As we expand and update our Kmart stores nationwide, said Harold Parkison, vice president of merchandising, hardlines, "we're improving our merchandise assortment with a wider array of quality brands shoppers want."