Deutsche Bank Praises European Tyre Makers’ Margins
In its global automotive news brief, Deutsche bank has noted that while the three major European tyre companies experienced "very weak" volumes during the first half of the financial year, each of them reported strong resilient margins. Continental achieved an adjusted operating margin of 11.0 per cent, which was stable on the first half of 2008, Michelin 4.0 per cent (8.6 in the first half of 2008) and Pirelli Tire 7.6 per cent (8.8 per cent in the first half of 2008).
The red ink was in demand at Kumho Tire during the preparation of its second quarter 2009 results. The South Korean manufacturer posted a net loss of KRW 98.3 billion (£48.15 million) during the three months to June 30. Sales in this period were down 23 per cent year-on-year to from KRW 614.3 billion (£300.90 […]
Apollo to Launch Full Range into Europe in 6-12 Months
Despite the fact that the Apollo/Vredestein takeover contracts were signed just a month before Tyres & Accessories visited Enschede, the integration process is said to be already well underway. What’s new is the announcement that in less than a year a full range of Apollo tyres will be launched into the European market. The newly merged Apollo Vredestein will be responsible for sales and marketing of all group brands in Europe. Of course when it comes to making major changes to the Apollo brand strategy this will have to be done in consultation with Delhi, but to all intents and purposes Vredestein will be masters of their own and Apollo's destiny within the bounds of the continent of Europe and the USA. In return Apollo will take the lead when it comes to selling Vredestein-branded tyres into the new Asian market territory the recent combination of the two companies brings.
On 15 May 2009 Apollo Tyre’s purchase of Vredestein Banden was completed with the signing of contracts ratifying a deal estimated to be worth between 175 million and 220 million euros. The new combined company, Apollo Vredestein BV, will operate as a wholly owned subsidiary of the Indian tyre giant Apollo, with full responsibility for selling all of both company’s tyre brands (Vredestein, Maloya and Apollo) in Europe. Having witnessed Amtel-Vredestein go to the wall earlier this year, observers agree that the company's previous alliance with the now defunct Russian tyre maker turned out - with the benefit of hindsight - to have been a mistake.
Nevertheless Vredestein's re-marriage to an ambitious manufacturer with its own designs on European market access puts the new combined company just outside the top 10 global tyre manufacturers, somewhere around 12 or 13; fulfils Vredestein’s desire to find emerging market production capacity and a route into the related sales markets; and is being hailed as a new beginning for Dutch tyre maker. Tyres & Accessories recently travelled to Apollo Vredestein BV's Enschede headquarters and asked the newly merged company's CEO, Rob Oudshoorn, why it will be second time lucky for the tyre manufacturer.
Michelin Announces Changes to Operations in France
Michelin has announced details of a project that it says will upgrade the company’s global research and development centre in Clermont-Ferrand and enable it to increase specialisation at a number of its industrial operations in France. The company claims this project “reflects the Group’s commitment to strengthening France’s role as Michelin’s strategic hub and innovation centre” and will enhance the productivity of its manufacturing operations in an increasingly competitive global marketplace.
Michelin is planning to reduce its French workforce by a total of 2,900 over the next three years. The job cuts, which include 1093 losses this year, equate to around 10 per cent of the tyre manufactures total domestic workforce. Michelin said it is cutting the positions in order to concentrate on the production of higher specification and higher margin truck and passenger car tyres at its Montceau and Tours plants. In addition, Michelin will negotiate 1,800 voluntary departures over the next three years. Of the 1,093 employees affected by the labour reorganisation plan, 495 positions are set to leave through early retirement. Michelin says it will then offer the remaining workers at least two other positions elsewhere. The remaining 1,800 additional job cutbacks will be spread across all operations in France.
The eleven finalists who will hone their journalistic skills in the battle to become this year’s Bridgestone e-reporter have been named. This year’s list features aspiring sports reporters from nine European countries, including two UK candidates. The first e-reporter to be given the chance to demonstrate his talents is Spain’s Ferran Lopez Margall, who will cover the opening GP2 event for the season at the Spanish Grand Prix on May 8 to 10.
Eight finalists are attending a Formula One race weekend to follow the GP2 Series this season, while three others will get the opportunity to witness the two-wheeled action of MotoGP. All finalists will report on the Bridgestone-supported championships for Bridgestone’s bridgestone.eu/e-reporter website and interview riders or drivers to fine-tune their journalistic skills. The first UK e-reporter to go trackside is Stephanie Black, who heads to Silverstone on the weekend of June 19 to 21. The second Blighty based candidate, Kate Goodacre, will report on the GP2 proceedings in Germany between July 10 and 12.
Two new truck tyres are extending Goodyear’s US market range. These latest products, which the manufacturer is introducing to address the needs of multiple applications that range from city delivery to emergency vehicles and buses plus longer regional runs, are said to offer a deeper tread depth, enhanced tread designs and compounds in order to maximise tyre life in both urban and regional driving conditions.
The local haul and regional segments are diverse and about as tough as it gets when it comes to wear on commercial tyres, said Donn Kramer, Goodyear’s director of marketing for commercial tyres. With the amount of scrubbing and curb damage the tyres undergo, fleets need tyres that are robust and able to provide a low cost-per-mile through multiple retreads. We’re excited to bring to market major advancements in tyre technology with the Goodyear G661 HSA and G662 RSA with Fuel Max Technology.
Cooper Tire & Rubber announced on May 5 its intention to pay shareholders of record at the close of business on June 2, 2009 a quarterly dividend of 10.5 cents per share on common stock. This dividend, payable June 30, 2009, will become the 149th consecutive quarterly dividend paid by the company.
On May 5 Goodyear Tire & Rubber gave word of its intention to initiate a public offering of 7-year senior notes to the aggregate principal amount of approximately US$500 million, subject to market and other customary conditions. The notes, adds Goodyear, will be senior unsecured obligations of the company.
The company reports it intends to use the net proceeds from this offering, together with current cash and cash equivalents and unused availability under its credit facilities, for general corporate purposes, which will include the repayment on or prior to maturity of $500 million in aggregate principal amount of its senior floating rate notes due December 1, 2009. Joint book-running managers for the offering will be J.P. Morgan Securities Inc., Citigroup Global Markets Inc., Deutsche Bank Securities Inc. and Goldman, Sachs & Co.
Available in 17, 18 or 19” with V, W, Y and Z speed ratings, the ContiSportContact 3 range is the latest in Continental’s range of ultra high performance, sporty tyres. The German manufacturer places special emphasis on the technological developments built on the model of the ContiSportContact 2, measuring the improvements through stringent in-house performance testing. The truism that cars in general have increased the power available to the average driver can be applied especially to the UHP segment, so transferring that increased power to the road with the required levels of control requires of top UHP manufacturers commitment to equal technological advances.
Tyres & Accessories sister publication Neue ReifenZeitung recently published reports that Continental has been considering moving its truck tyre production East and linking it with certain Russian tyre makers in the wake of the announced closure of its high tech Hannover-Stoecken truck tyre production plant. For a number of years the Russian tyre manufacturer Nizhnekamskshina has worked together with Continental within the framework of a technical agreement, having previously been involved in a technical partnership with Pirelli. The possibility of forming a 50:50 joint venture has been talked about since 2007, however to date the entire result of this joint effort is that the Russians are building a truck tyre factory and Continental is “only” contributing know-how and organising production processes, as well as delivering all the required equipment. The target is said to be for production capacity to exceed one million all-steel tyres per annum.
Australia’s JAXQuickfit Tyres Celebrating 60th Anniversary in 2009
Australian tyre retailer JAXQuickfit Tyres is marks its 60th anniversary in 2009, and in this diamond jubilee year the company is also celebrating its third consecutive year of double-digit growth. From humble beginnings in 1949, Jax Tyre, as it was then known, has developed into AUD$100 million a year business with a network of 72 outlets throughout Australia. And having covered much of its home market, JAXQuickfit says it is now looking at expansion overseas.
Porsche has increased its stake in Volkswagen ordinary shares to 50.8 per cent. Analysts Morgan Stanley say that, while the timing of such a move was impossible to predict, this is absolutely in line with Porsches stated strategy of ultimately moving to 75 per cent of Volkswagen and seeking a domination agreement.
With this move, Porsche also acquires indirect control over Scania through VWs 68.6 per cent voting stake in the Swedish truck maker. Porsche has made it clear that is has no strategic interest whatsoever in Scania or any interest in buying Scania shares. However, Swedish law requires Porsche to make a mandatory bid for Scania.
The announcement had a phenomenal response at the stock market where, following publication of Schaeffler’s statement on EU approval, tendered shares in Continental grew by as much as 50 per cent before levelling off at around 36 per cent up, in response. Why? Because up to this point investors had become decidedly nervous about Schaeffler’s ability to complete the deal and the EU announcement was seen as a sign that the deal as a whole is on track. Due to the well-documented contraction in credit markets bankers had been scratching their heads about where the necessary financing would come from and whether the supporting banks would be able to come up with cash.