Winter tyres and the UK market are a standing joke. Nobody buys winter tyres in the UK. At least that is the perception. However, when we talk to people in the tyre trade, be they retailers, wholesalers or manufacturers they all understand that winter tyres are not just about driving on snow or ice for the three days a year when our roads are clogged with the white stuff. They are largely aware that winter tyres are about dealing with temperature conditions that adversely affect the performance of summer tyres. That below seven degrees Celcius the winter tyre starts to outperform the summer tyre in terms of safety. Yet, the general response on winter tyres is that nobody wants them in the UK.
Why might that be? Could it be that three days of snow on the roads each year doesn’t warrant the expenditure? Could it be that the tyres are being marketed in completely the wrong way? Could it simply be that people, in general, hate spending money on their car? Could it possibly be that the tyre retailers simply don’t like having to work to sell product? Think how difficult many find it to sell pairs of shock absorbers, or indeed anything but the basic tyres and exhausts.
So, why do we need winter tyres in the first place? In layman’s terms a summer tyre is manufactured with the function of keeping the tyre in contact with the road surface in both wet and dry conditions. It’s compound has a designed in level of adhesion. Its chemical make up creates an interaction between the tyre and the roadway. However, the compound utilises an oil in the mixing process that allows the various components in the compound to blend and mix and work together as one. This polymeric oil can, and does migrate in time leading to the deterioration of the tyre. In practice it migrates inwards in cold climates towards the lining of the tyre. Thus degrading the tyre tread, hardening it and making it less effective in its interaction with the road surface. The point at which it does this is around seven to eight degrees Celcius. So, the efficiency of summer tyres in the wet or dry in winter is diminished. Even without snow and ice, a winter tyre becomes a safer option in colder weather.
Sir Tom Farmer has launched is Tyres and Wheels Autocare operation and it offers the trade a new opportunity.
“The plan is,” explained Sir Tom, “that we will help people realise their ambition to develop their own businesses. We understand that there are people out there in the automotive sector who want to go out on their own, but who don’t have access to the funding. They may be excellent salesmen, mechanics, tyre technicians, but be lacking in administration skills. We can help the people with the right attitude to achieve their ambition.
“We will put up, for the right people, 100,000 poundsw to finance the co-owned business. They will have to put in between 25,000 pounds to 45,000 pounds of their own money to become a Farmer Autocare co-owner. They will have to locate the premises and we will take care of fitting out the business, developing the branding and carrying out all the administration work for the business. That leaves the co-owner free to operate the business.
“If the project requires the purchase of premises, then we will buy the premises and lease them back to the co-owners.
“Many small businesses fall down because the owner is too involved in one area or another of the business. If they devote their time to the customers and the physical side of the business they end up working till all hours doing paperwork. That isn’t good business practice. On the other hand, if they do the paperwork well they often don’t have the time to devote to their customers. Few people have the ability to run every element of their business nowadays. We can take the administration load away from them and allow them to do what they are good at, dealing with the running of the business and the customers. That’s not to say that we expect our co-owners to be out there fitting tyres, but they will have the time to manage their business, to look after the suppliers and the staff. If they don’t get the people and the suppliers right then they won’t get the customers.
“This is an opportunity for the more mature person with the energy and the enthusiasm, who wants control and who wants to work to live rather than live to work.”
Black Circles is using the Internet as a tool to market tyres in what is a unique route to market. Black Circles is a rapidly growing Internet and mail order tyre operation that carries very little stock and has no in-house retail outlets or warehouses to speak of. It takes on the cost to sell tyres and pays its fitter partners in advance. It offers everyone a better deal from the client buying the tyre, to the retailer getting paid in advance and taking a greater margin. Even the UK tyre wholesalers and manufacturers win for Black Circles has a policy of supporting local suppliers who can offer them repeated standards of high service.
Whilst most tyre purchases remain distress purchases, Black Circles recognise that there is a growing sector of the market where planned replacement of tyres is the norm. Where performance is the key requirement, and we all know that means sales of UHP and higher margin tyres.
Which is where we come to Michael Welch’s Black Circles – the Internet tyre supplier. In actual fact it isn’t quite correct to call Black Circles an Internet Tyre supplier, for the business is as likely to be carried out on the telephone as it is over the Internet. Perhaps a better description would be a remote tyre supply service. People call or use the Internet to request information, obtain a quote, and book a fitting for their tyres.
Now, this is where things start to get interesting. A number of players in the tyre market hold the traditional view that if you don’t buy your tyre from them, they either don’t fit it, or they charge you a premium for fitting the tyre. Which is in some respects short sighted.
Let’s look at this from a consumer’s point of view. He has decided to buy a pair of, or a set of tyres. He has chosen the brand, the size, the pattern and agreed a price. He knows that wherever he goes to collect his tyres they will be what he wants. He books a fitting time and in due course arrives at the appointed time, whereupon the dealer mounts and balances his tyres and sends him merrily on his way. Exeunt one very happy customer.
At this stage in the process the retailer is also a very happy customer because he has gained from the business without having to worry about ordering, about the customer not paying or not arriving, and what is more, he was paid for the job before the client brought his car in.
Let’s look at that from a traditional point of view. The customer wants a set of tyres for a BMW M5 – he has to call in, find out that the retailer doesn’t hold stock of the two sizes required, he has to have them ordered, perhaps pay a deposit, and then return when the tyres are in stock – perhaps the next day. Not an ideal scenario for the client.
ECI International, the organisers of the Tyrexpo Asia series of exhibitions, has acquired the Brityrex name and is launching a new show for the UK, called Brityrex International 2005. The show will take place at the Harrogate International Centre from 10-12 May 2005. Paul Farrant and Rowena Suthers of ECI were the original team behind Brityrex when it was owned and organised by Tyre Exhibitions and they believe that there is a place for a dedicated event for the UK tyre industry, hence the launch of Brityrex International, described by ECI as “an independent, cost-effective, no frills trade exhibition.”
Deja vu for Bridgestone as the company recalls some Steeltex tyres including 297,000 tyres on Ford Excursion sport-utility vehicles following at least five fatalities. The Steeltex Radial A/T tyres were made at a factory in Joliette, Quebec, from March 1999 through December 2002, the tyremaker said. The tyres will be replaced without charge, Firestone said. The Steeltex tyres fail “in a situation where the vehicle is overloaded or the tyre is way under-inflated,” Firestone spokesman Dan MacDonald said. One of the fatal accidents involved a vehicle hauling a trailer that lost control, while in another the sport-utility vehicle was loaded with 1,500 pounds of bottled water, he said. The NHTSA twice previously investigated Steeltex tyres without finding any defects.
The Annual Autosport International show is without question one of the UK’s most successful motor shows. What began as an off-season showcase for the motorsports industries has developed into a glittering exhibition that few involved in motorsport can afford to ignore; though both Michelin and Bridgestone did just that this year.
Here we found Dunlop, Goodyear, Pirelli, Yokohama, Avon, Hoosier, Kumho, and Silverstone represented by Sport and Service. Each taking a very focussed approach to motorsport tyres and the motorsport sector. There were some odd men out, Vredestein and Technic both had stands and from a promotional point of view one had to wonder what the relationship between their display and motorsport was. Having said that Vredestein went home happy, reporting that they had gone to the show to contact independent dealers and made plenty of contacts. The company also took home the award for Best Stand in The Aftermarket Show. The company was also first to confirm its intention to return next year for the 2005 event. “We hoped to meet independent dealers and they were there in large numbers. It’s been a great show,” said Bert Stellinga. A similar statement came from Ian Smith at Technic, “It’s been a very successful return to exhibitions for Technic. We have seen independent tyre dealers, previous customers who have recognised the brand name and come on to the stand to re-establish contact, plus we are going away with some very promising leads.”
Technic took the opportunity of the show to display some clever blue retread tyres on a Smart car. The ‘blue tyre concept’ featured tyre casings with a blue pigment silica rally-type compound, rather than the traditional carbon black. “It was a move that has raised a great deal of interest and we are now considering adding coloured tyres to our range” said operations director Ian Smith.
Snap-on Incorporated, supplier of tools, diagnostics and equipment, has announced that John F. Fiedler (65), retired chairman of the board and chief executive officer of BorgWarner Inc., has been appointed to Snap-on’s board of directors. Fiedler served as BorgWarner’s chairman and chief executive officer until 2003. Prior to 1995, he was president and chief operating officer. During his tenure, BorgWarner increased its revenues from $800 million to roughly $3 billion, and grew from a largely North American company to one with a geographically balanced customer base. Prior to joining BorgWarner in 1994, Fiedler was with The Goodyear Tire & Rubber Company where he was executive vice president in charge of the North American Tire division.
It must feel like deja vu for Bridgestone-Firestone as a Californian attorney is seeking to expand complaints about alleged defects in Steeltex tyres into a national class-action lawsuit. Two Californians are suing Bridgestone-Firestone and the lawyer claims that the tyres are responsible for a dozen deaths and more than 100 injuries. Bridgestone-Firestone deny the allegations, pointing out that an 18-month investigation by the National Highway Traffic Safety Administration (NHTSA) found that the tyres out-performed some competitors’ tyres. Steeltex tyres are popular with owners of RVs and pickups, plus they are often fitted on ambulances.
Goodyear Flight radial aircraft tyres beat a Michelin radial tyre by 56 per cent in a head-to-head test on the landing gear of a US Air Force F-16 Fighting Falcon. The test examined tyre life cycle costs and in the past, the USAF has used test results as a basis for its annual procurement awards. The USAF has more than 2,000 F-16s in service.
Anthony Ensor is returning to Pirelli Tire Inc. of Canada, where he began his career in 1985, as Vice President and General Manager. He has spent the past decade with Pirelli’s European operations in Italy, Germany and the UK. Ensor replaces Nicola Ruccolo, who has spent 28 years with Pirelli in Canada and North America, and who is leaving the company to pursue other interests.
Cordenka has invested in new spinning equipment at its plant in Obernburg, Germany, in response to increased demand for rayon yarn for tyre reinforcement. Annual output will be raised by 1,500 tons to a total of 30,500 tons and the extra capacity will come on stream in the last quarter of this year.
Michelin has released its 2003 year-end figures. These show net sales of 15.4 billion euro (down 1.8 per cent on 2002), although sales volume (in tons) rose by 3.7 per cent. Operating income was down 6.7 per cent, to 1.143 billion euro and net income was down 47 per cent, to 329 million euro. The main impact on the figures came from sharply-increasing raw material costs, which rose by 21 per cent (in US$) during the year. Currency fluctuations and several one-off extraordinary items also had a negative effect on the figures. Michelin believes that, in the light of these exceptional cost increases, its 2003 figures show that the company is resilient, with increased investment and a strengthened global presence. The company claims a worldwide tyre market share of 19.2 per cent.
Back in October, Cooper Tire & Rubber announced that Chinese manufacturer Hangzhou Zhongce would produce 300,000 radial medium truck tyres for the US company. Now Cooper has revealed that Hangzhou Zhongce is also to make one million passenger radials for the US market; these will be in six sizes under the brand names Cooper, Mastercraft, Dean and Starfire. Dick Stephens, president of Cooper’s Tire Group, said that the outsourcing will help Cooper meet growing demand, especially for the Zeon high performance lines. “By outsourcing some of our broadline products, we can devote more production capacity to the more exotic performance tyres,” commented Stephens, adding: “We have increased capacity at all of our US plants and these tyres from Hangzhou will help fill the gap between our capacity and projected demand.” The tyres will be manufactured to Cooper’s specifications and engineers are currently in China conducting audits to ensure the highest quality standards.
Pirelli is to be the new official tyre supplier to the Volkswagen Racing Cup in the UK. All competitors in the 2004 championship, which gets underway in April, will run on Pirelli P Zero tyres. The Volkswagen Racing Cup joins the UK’s Seat Cupra Championship and the Pirelli Maranello Ferrari Challenge in using Pirelli tyres. The company also supplies its product to the American Le Mans Series and to GT teams internationally. Since its inception in 2000, the Volkswagen Racing Cup has grown to become one of the best-supported and most successful club championships in Britain. Last season more than 30 drivers took part, handling cars ranging in size from a 1.8-litre turbocharged Lupo to a four-wheel-drive Golf R32.
At the Asian Aerospace show in Singapore, Goodyear has announced that it is to supply its Flight Radial aviation tyres for the A320 aircraft in Qantas’s new, low-cost carrier Jetstar Airways. Donald Roulett, global marketing manager for Goodyear aviation tyres, said that the move from bias ply tyres to radials made sense for cost-conscious airlines as radials deliver more landings per tread and provide more load-carrying capacity, helping to reduce costs. In addition, radials weigh up to one fifth less than bias ply tyres and provide lower rolling resistance, and thus better fuel consumption. The Jetstar fleet consists of 23 Airbus A320 aircraft and the agreement lasts for five years.