Continental to Intensify Cooperation With Partners
A central part of every sales and marketing strategy that is based upon premium products is the guaranteed quality of these products and a highly diversified product portfolio that addresses customer requirements. Continental has in recent times achieved some noteworthy successes in both these strategic areas through the introduction of new products from its truck tyre division, such as the “Continental HTR 2” trailer tyre. The manufacturer has brought together its entire retreading business activities under the “ContiLifeCycle” banner, including its most recent substantial developments, such as an intensified cooperation with the well-known German retreader Reifen Ihle and with the Italian Marangoni Group. All of this helps Continental to literally become a full-line supplier in the sense that it can deliver what premium customers demand: more than just new tyres that are long lasting and help save fuel – instead it delivers a full approach that helps to cut down on costs per kilometre and benefits the environment (although this typically is not the primary goal of tyre buyers). As Eckhard Wilanek, managing director of Continental’s fleet & retread business, points out, all this cannot be achieved without the help of retreading.
Like many other new tyre manufacturers, Continental has for a number of years been committed to retreading – a sector of the industry that used to have a “dirty image”, but has now become respectable. As Eckhard Wilanek says, there are primarily two key reasons why its reputation has changed in recent times. The first of these is very simple: By the time the bite of the global financial and economic recession began to be felt last autumn, fleet operators and freight forwarders were experiencing increasingly strong pressure on their bottom lines. Everybody is short of money. In these unprincely times when ‘cash is king’, economic pressures convince fleet managers that lower-priced alternatives make more sense than new tyres. So while one company will then decide to go for cheap imported tyres from the Far East (without investing into a valuable casing), another company may opt for retreading. It is important to note that the obvious advantages of retreading and the inclusion of retreads into a fleet’s tyre management makes sense at all times, whether good or bad.
Full-line suppliers that offer both a vast new tyre product line-up and a diversified retreading programme, such as Continental, can particularly rely upon an important trend that is present in mature markets: fleets from the UK and elsewhere are becoming ever more professional. When levels of professionalism amongst fleet operators and small freight forwarders increase, decisions regarding tyre management are increasingly based upon rational factors. According to common public perception – a mindset that, as Eckhard Wilanek comments, is hard to understand today – retreading still possesses something of a negative image when it comes to quality. A piece of tread rubber on the road – in the past (and also today) many people automatically assumed: there you go, retreads again. However, this thinking is today neither provable nor acceptable, Mr. Wilanek claims, although obviously the quality of a retreaded truck tyre is strongly dependant on the quality of the retreader. But in general the fact is: “Retreads today are as good as new tyres.”
Product quality is the second reason why retreaded truck tyres are increasingly becoming a valuable, economic and environmentally friendly replacement tyre alternative for large and small fleets. In order to further improve the quality of its own mould-cure retreads (these have been called “ContiRe” instead of “Contire” since last autumn and now fit perfectly into Continental’s nomenclature) Continental has now entered into a special relationship with Germany’s Reifen Ihle.
Two years ago Continental first announced that there would be a “reorganisation of mould-cure retreading” and that subsequent investments would take place. As Eckhard Wilanek tells Tyres & Accessories, these announced investments have since been implemented. Last autumn a new production line at Reifen Ihle in Southern Germany entered operation, and this line exclusively produces ContiRe mould-cure retreads for Continental. The actual investment into machinery and related equipment, an “investment in the area of millions”, has been made by Reifen Ihle. Continental in turn has committed itself to receive a certain number of ContiRe retreads made by Ihle, thus guaranteeing that the production capacity of the company’s twelve presses is fully utilised. Mr. Wilanek did not disclose how many tyres this might amount to, however he did mention that production there is running “as planned”. Apart from its activities with Reifen Ihle, Continental is cooperating with other offtake partners, including Reifen Günther, another German retreader, and Bandvulc, whose retreading facility is based in Devon, UK. For his part, Patrick O’Connell, managing director of the Bandvulc Group commented: “This cooperation ensures that we have an ongoing technical dialogue with Continental that is beneficial to both parties”.
While Reifen Ihle remains Continental’s largest retreading partner, the managing director fleet & retread business does not wish to declare Reifen Ihle a “preferred partner” despite its production of more than half of all ContiRe retreads. In addition to its cooperative agreements, Continental also produces its own mould-cure ContiRe tyres in its truck tyres factories across Europe. For this they use so-called “DA tyres” (default aspects).
A particular benefit of the cooperation with Reifen Ihle (and the other partners) is that, due to the intensified customer-supplier relationship, both partners are equally involved and interested in optimising the products and the production processes. “There have been substantial improvements with regards to the quality of our products, the production process itself and the production costs,” Eckhard Wilanek continues. An important contributory factor in this regard is that two Continental employees are permanently based at Reifen Ihle’s production site. “It is the precision of our new tyres that now finds its way into retreading.” It is in particular the right application of tread rubber and the buffing of the tyre that has been optimised. “Our relationship is mutually enriching,” Mr. Wilanek says, “there have admittedly been arguments and we have even fought over details.” But this has been the only way through which both partners could actually benefit from the relationship and how they can guarantee that “retreaded Continental truck tyres can be delivered offering new tyre product performances” although the casings have already lived the first part of their (Conti) life cycle.
Together with ContiRe mould-cure retreads, which are exclusively sold through Continental’s own distribution and not directly by its production partners (such as Ihle, Bandvulc or Reifen Günther), the German company also has an extensive line of pre-cured retreads under the “ContiTread” brand name.
As the manufacturer points out in a publication, ContiTread is “a premium tread for pre-cure retreading and is produced using original Continental compounds and patterns.” Last summer Continental headed in a new direction with its pre-cured retreading business through a stronger reliance upon close industrial partnerships. Since then the Italian Marangoni Group has acquired a global license to produce and sell pre-cured treads under the ContiTread brand. This relationship comes in place of a similar one between Continental and Bandag Europe – at the beginning of last year Bandag Europe cancelled the partnership, a relationship dating back about six years; later Bandag was taken over by competitor Bridgestone. Through this new agreement, Continental and Marangoni are renewing an old relationship that ended in 2000 before Bandag took over the production of ContiTread treads.
“Our cooperation with Marangoni is starting up well”, Mr. Wilanek notes as an initial summary. While the cooperation with Bandag had been confined to Europe, the new cooperation with Marangoni explicitly gives the Italian company the right to produce and sell ContiTread treads in markets throughout the world. According to Conti’s product strategy, ContiTread treads are currently produced at Ellerbrock in Hamburg (Germany) as well as at Marangoni factories in the US (Nashville) and in Brazil for the respective regional markets. Retreading with the use of ContiTread pre-cured treads is not carried out by Marangoni itself; this is performed by members of Marangoni’s retreading network. These retreaders are audited by Marangoni and Continental according to the ContiTread product and quality standards, as Eckhard Wilanek explains. Because the European market was already well served by Marangoni’s predecessor, it is the markets outside of Europe where there should particularly be great potential to grow. These are the markets in which ContiTread was not distributed before Marangoni took over from Bandag as ContiTread licensee. However, outside of Europe there are numerous very good Continental new tyre customers in the tyre trade and – according to the rationale at Conti’s headquarters – these will also be interested in ContiTread retreads. The ContiTread product portfolio covers most of Continental’s new tyre treads although (as always) not all tread patters in all sizes can be offered as a ContiTread pre-cured tread; or even as a ContiRe mould-cure retread.