The sustained growth of car sales of recent years has given a boost to the tyre business, a business likely to boom over the following years, particularly in the services segment, which enjoys high profitability. This high potential has attracted several companies in the car industry.
Businessman Ali Madadi, who controls the Radacini group, became the majority shareholder of Sama Service late last year in a deal put at about 1 million dollars (800,000 euros). Sama Service was one of the first companies set up after the Revolution that made its business in tyre sales and wheel services. Sama Service has also been in talks with investment funds on the domestic market for a possible takeover of the majority stake.
One of Sama Service’s main rivals on the domestic market, the owner of the Autozone brand, is close to making a sale, according to market information.
“Last year Sama Service generated turnover of more than two million euros, and this year we will reach 2.2 million euros. Our net profit rate is in the region of 10%,” said Florin Ion, Sama Service general manager.
The positive financial results mean businessman Gelu Tofan, who sold the company’s majority stake, was able to make a significantly higher profit. Gelu Tofan bought the controlling interests in Sama Service in 2002 following a 500,000 dollar transaction, and within two years the value of the stake climbed to around 1 million dollars.
Sama Service currently owns two car service centres in Bucharest, with a third to be opened soon. The company’s development plans include the opening of a further five locations in the following years in Bucharest, with investment in each service centre reaching around 300,000 euros, depending on the price of land.
“We mainly perform our services for companies, with private customers accounting for only 30% of our activities,” said Ion, whose company sells 15,000-16,000 tyres per year.
Although Sama Service’s business volume seems small in comparison with the total market of 2 million units per year, as in Western Europe, brand image is also gaining in importance on the Romanian market.
In addition, as of this year, the domestic branch of US producer Goodyear, which has annual deals of over 20 million euros, has started joint development with Sama Service for a new range of company services – “mobile service” – that allows for more efficient fleet management. ionut.bonoiu@zf.ro