Whether you like it or not, the world is turning more and more into a technological marketplace. And all aspects of business are being affected, including the tyre trade. Here Tyres & Accessories looks at two of the Internet’s best-known names, and asks how their businesses might affect yours.
According to the Office of National Statistics, by the end of 2004, 52 per cent of households in the UK had access to the Internet at home. And by the end of 2005, 99.6 per cent of the UK will have access to broadband if they want it. Furthermore, the Internet was the fastest growing retail sector last year, attracting one in four shoppers.
The problems Continental faces in the US are more or less ‘homemade’. The problem is there doesn’t appear to be any solution available unless you call a total tactical retreat from the biggest market in the world a solution. In the event that this happens, it is more than likely that the company would call such a decision to cease selling tyres in the US a “strategic withdrawl.”
In 1987 the Continental group did not have the financial resources (and was later unwilling) to spend the amount of money necessary to build up the company’s Continental and General brands. Now the current management has to pay for all the shortfalls left behind by its forbears. Meanwhile, in the midst of all this the US-arm of the group’s tyre division is again going to the dogs with a loss of more than 100 million euros. Nobody believes that a turnaround will take place this year, even though CEO Manfred Wennemer and his colleague Martien de Louw have suggested time and again that it would.
CVC Capital Partners has sold Kwik-Fit to French private equity firm PAI for £800 million. The news follows months of speculation including suggestions that a Bridgestone/Mitsubishi joint venture was pulling out in front when it came to bidding for the UK’s largest fast-fit chain. Bloomberg reports that PAI plans to open more fast fit retail outlets as a result of the acquisition.
A-Z Formen and Maschinenbau GmbH Germany has sold its Rubber Extruder Division and the related IPR and know-how to VMI - AZ Extrusion GmbH Germany, a newly founded company which is part of the VMI Group. All staff have been transferred to the new company.
VMI is a supplier of tyre manufacturing and rubber compound handling machinery. Plants operating in Europe, North America and East Asia will now produce the systems. Following the acquisition the VMI Group is now in a position to supply products, process know-how and service to rubber extrusion and retread customers worldwide.
The new company’s production facility and headquarters will be based in Runding Germany, whilst its sales offices will remain in Munich and Akron USA at their existing addresses. Business contacts within both locations will remain the same, however Mr Florian Fischer, currently manager of the Machine Division of A-Z will now become the new general manager. Mr Auke Dalstra, currently VP and CFO of the VMI Group will assist him.
A-Z Formen and Maschinenbau GmbH, has been supplying molds and mold closing systems for the tyre industry, special machinery for tyre mold production and components for the aerospace and other industries for over 40 years and will now fully concentrate on this sector of its business.
Goodyear has announced that Samir Gibara (64) will resign as chairman at the end of June. He will be succeeded by Robert Keegan (55), who is currently president and CEO and who will retain responsibility for these two roles. Gibara joined Goodyear in 1964 and has been chairman since July 1996. He paid tribute to the speed with which Keegan learned the industry and demonstrated his leadership abilities. For his part, Keegan said that Gibara had provided important and valued counsel since Keegan joined Goodyear in October 2000 as president and COO.
Nokian and Matador To Commence Contract Manufacturing
Nokian Tyres plc and Matador AS are signing a contract manufacturing agreement. This transaction will mean that Matador will produce Nokian branded speed categories S, T, and H car summer tyres at its factory in Slovakia. The tyres will be sold in Eastern European markets. The production target for 2003 is 100 thousand Nokian tyres with initial sales taking place during the first quarter of the year. Volume manufacture will increase to 300 thousand tyres by the end of 2005.Through contract manufacturing Nokian will continue to ensure its growth potential in Eastern Europe. Production capacity at the companys factory in Finland will be freed to produce ultra high performance tyres. The agreement will be valid until the end of 2005 and after that on a one-year basis.
Samir G. Gibara (61), chairman and chief executive officer of The Goodyear Tire & Rubber Company, has been elected to the board of directors of Sumitomo Rubber Industries Ltd. in Kobe, Japan. Gibaras election is in conjunction with Goodyears 10 percent ownership of SRI, following the companies global alliance, completed in September 1999. This ownership makes Goodyear SRIs second-largest shareholder. SRI holds 1.4 percent of Goodyears common stock.
The Financial Times has published its annual list of the top 500 global companies, ranked by market capitalisation. The only tyre company in the world list is Bridgestone, at position number 300. In the list of the top 500 European companies, there are three; Michelin (304), Pirelli (311) and Continental (482).
Tyre Manufacturers In Global E-Commerce Initiative
Six of the largest tyre manufacturers have announced their intention to develop a global e-business purchasing company. Rubbernetwork.com is an independent company which will host a global exchange, including Conti, Cooper, Goodyear, Michelin, Pirelli and Sumitomo Rubber. Confidentiality is assured and the exchange will be open to all manufacturers and suppliers. It will be operating by the year end. Significant savings and efficiencies in purchasing are predicted.
“Only Over My Dead Body” – Goodyear And Dunlop Brands Remain In Competition
Sylvain G. Valensi (58), who has 34 years service with Goodyear, latterly as Vice President Goodyear Europe, has, since the joint venture with Sumitomo Rubber Industries (SRI), assumed the role of Vice President of Goodyear Dunlop Tires Europe. Talking to this magazine during the recent Reifen 2000 exhibition in Essen, he stressed that the major brands Goodyear and Dunlop will remain independent and will almost be in competition with each other.
1999 Cragar Industries (Phoenix/USA) sold most of the assets of its wheel business to Weld Racing and to Carlisle Tire & Wheel. The remaining assets have now been sold to midwest distributor PDK, Inc. and so the company has abandoned its (until now) core business of producing and distributing wheels. Cragar is still in the wheel business as the licensor of its brand, but is focussed now on Internet business.
Manufacturing Agreements Signed Between Nokian And Michelin
Two agreements have been signed by Nokian and Michelin concerning the off-take manufacture of Nokian brand agricultural, industrial and truck tyres at Michelins Polish factory. The agreements will last for three years and will be renewed annually thereafter. Sales of agricultural and industrial tyres will start this year and truck tyres early in 2001.
Only a month ago NEUE REIFENZEITUNG reported at length on Mobile Fitting as a sensible and vital service in the truck tyre business. Now Goodyear-Handelssysteme GmbH, a Goodyear marketing subsidiary, plans the introduction of Mobile Fitting (known as Tire Valet in USA) for car tyres. The idea is still at an early stage. Time is money, the marketing people in Cologne believe, and aim to gain new types of customers with the new service. With marketing programmes, whose details are still to be developed, the company wants to appeal to fleet operators as well as small enterprises, self-employed people as well as private users. Run as a comprehensive service, Mobile Fitting will also be suitable to give status to the tyre dealer. Whether Mobile Fitting can be taken as far as the end user’s front door is still uncertain. In our country potentially good ideas have the nasty habit of falling foul of vetoing authorities. Nothing can be done without special permission, to be granted by each local authority individually.
Pirelli has released first details of a new manufacturing system, called MIRS (Modular Integrated Robotised System). The company is investing 250 million Euros over the next five years. A MIRS plant that can produce one million tyres a year would employ 104 people in five shifts, would occupy 3,500 sq. m. and the investment cost (excluding the building itself) would be around 45 million Euros. According to Pirelli, MIRS reduces the steps of the tyre building process from the previous 14 to only three. Instead of passing the tyres from hand to hand in the production process, the MIRS work is done by robots. Tyre type and size are fed into the computer at the beginning of production, the rest is done by the computer alone, without human interference. MIRS is therefore a kind of mini-factory with an extremely high degree of flexibility. The factory can be built anywhere where there is a market. The technology, which Pirelli does not disclose and is not prepared to share with a competitor, not even under licence, was developed by Pirelli’s research and development department in co-operation with Italian universities and the Ministry of Research and Science. A pilot plant will start work in the Bicocca factory near Milan at the end of June 2000. The Italiens claim a manufacturing cost reduction of 25 p.c. for the MIRS method compared with the traditional way, and Pirelli boss Tronchetti Provera plans to manufacture three million tyres by the new method by the year 2003, or 15 p.c. of its high and ultra-high performance tyres. If all goes to plan, it will be possible to produce five million MIRS tyres within five years.