Bridgestone UK Aiming for Top Positions in Every Segment
When he’s not taking responsibility of Bridgestone’s UK operations, managing director John McNaught’s remit also includes the Republic of Ireland and the Nordic markets of Denmark, Sweden and Finland. For the purposes of the exclusive interview given to Tyres & Accessories/tyrepress.com at the end of 2009 McNaught generally spoke in his UK capacity, however while the questions centred on the UK, the answers give an insight into the general thinking behind the company’s recent development. John McNaught has worked for over 30 years within the tyre industry, gaining wide experience in equity distribution with a major focus on the truck tyre business. Here he has used this experience to help support Bridgestone to be one of the key players within the UK.
In recent years Bridgestone has grown into a prominent position in the commercial vehicle tyre market, with Tyres & Accessories’ market share research putting the Japanese manufacturer as market leaders, roughly on a par with Michelin. As the company aims to nudge ahead in the continuing competition with its global rival, and with up to 60 per cent of national fleet sales in this segment belonging to the top two, McNaught comments that the UK truck tyre segment has become something of a two horse race as far as the key national truck fleets are concerned. And what’s more, McNaught expects it to stay like this for the next two to five years. However, Bridgestone plans to stabilise its position by entering every segment of the market where the company isn’t presently represented.
From here on in, McNaught says the company is strategising for long-term sustainable growth, the first signs of which can be seen from the company’s performance in the turbulent 2009 markets. Looking at figures for last year as a whole, clear progress is being made with Bridgestone UK achieving market share growth in virtually every segment. The longer term goal is for Bridgestone to be number one or two in every product group. “Number three is not an option,” McNaught explains.
During 2009 the passenger car part of Bridgestone’s business, like many in the tyre industry, faced both internal and external pressures. The external pressures of the wider economic environment are clear, but the internal pressures (themselves knock-on effects of the recession), warrant a little further explanation. During 2009, in line with the responses of all the major tyre manufacturers, Bridgestone reduced output at its production bases. Markedly decreased car sales meant OE demand plummeted, leaving managers with little option than to right-size output for the market demand at the time. The problem for Bridgestone, in the UK at least, is that for most of the year the company was on-track to meet its own targets. With supply said to have been severely affected by reducing manufacturing output, there was an apparent difficulty getting all the tyres the company was selling. Then, when things began to pick up at the end of the first half, production centred on the manufacture of winter tyres, which traditionally occupy less than one per cent of UK market share. “If it wasn’t for these issues we would have hit our targets,” said McNaught.
Asked whether Bridgestone, as a premium brand tyre maker, had suffered from the widespread effects of the de-segmentation phenomenon observed in the market in the last year, McNaught explained that Bridgestone brand sales were actually up in 2009. Perhaps the one positive effect of the company’s passenger car supply issues was that production gaps led to reduced Firestone-brand tyre sales and a surprisingly strong product mix of about 66:33 in favour of Bridgestone. Sales of budget tyres are said to make up only a small proportion of overall volumes. According to McNaught, the main reason for the strong premium brand sales is increased brand strength, making the tyre “more acceptable to key regional dealers.” Continuous improvement in the company’s retail-focused training and development strategy, which is said to have gone particularly well in 2008 and 2009, is also described as a contributing factor.
Bridgestone UK is said to have experienced its strongest growth in 2009 in the earthmover/OTR segment
Bridgestone banks on ‘flat’ sales
Bridgestone’s technical centre in Rome has calculated that motorists who routinely drive on the wrong tyre pressure are using 3.9 billion litres of unnecessary fuel across Europe at a cost of 5.1 billion euros. In addition these drivers are said to be creating an additional 9.2 billion tonnes of CO2 per year. Run-flat tyre technology is Bridgestone’s answer to this question, but with most research suggestions consumers are looking for cheaper not more expensive tyres at the moment, are the safety and environmental benefits for the next generation of vehicles enough to keep sales of these products going?
A year after Bridgestone produced its 10 millionth run-flat, during the exclusive interview with Tyres & Accessories at the end of 2009, McNaught expressed his confidence in run-flats, saying that motorists will continue to opt to invest in this integrated ‘future-proof’ technology. Bridgestone’s latest generation of run-flat Tyres offer less rigid sidewalls and a nano-technology compound development designed to improve ride quality and comfort while maintaining the safety critical features of the tyre. These features are also said to allow for a greater range of size developments which will accelerate the drive toward RFT being available on more volume cars.
Reducing fuel efficiency is high on the agenda for all car manufacturers and tyre technology is delivering benefits in this area too. Earlier this year Bridgestone launched the Ecopia range of fuel efficient tyres, making use of ‘low rolling resistance’ technology. This product was originally used on electric cars in Japan in 1991, before being trialled by Volkswagen on the 3 litre version of the Lupo in 1998 – a car which at the time was considered ‘the most environmentally-friendly car in the world’, consuming only 3 litres of fuel per 100 kilometres. Demand for fuel efficient tyre technology continues to grow and the Ecopia range of tyres is now fitted as standard on some versions of the Opel Insignia and Mercedes S-Class. The Toyota IQ is also fitted with an all-new Ecopia tyre.
However, according to company representatives, the innovation which led to the development of the Ecopia range of tyres is very much unfinished business and the company says it is continuing to explore green tyre technologies to the full: “We are very aware that relatively small differences to a tyre’s design or construction can significantly influence its performance and its sustainability.”