Wincanton Establishing Direct Imports Capability for Micheldever
Micheldever Tyres has appointed logistics services provider Wincanton Plc to set up a direct import and trunking solution for the business. This arrangement will see a portion of an existing Wincanton site in Kettering, Northamptonshire set aside as a ‘direct import centre’ for Micheldever. From here more than 50,000 tyres will be shipped to wholesale distribution centres throughout the UK, which in turn will supply 22 per cent of the national tyre market. According to Wincanton, the new solution will reduce lead-times onto site following arrival at the port plus reduce product movement and handling across the network.
China’s Commerce Ministry has labelled US measures against Chinese imports, such as the tariffs on consumer tyres, as “groundless”. On October 15 ministry spokesman Yao Jian told journalists "the US launched a large number of trade remedy measures this year. Quite a few such measures were groundless and wrong."
Pirelli Working With Developer on Burton Retail Site Development
Pirelli is cooperating with a property developer on plans to build a housing estate on the site of its Burton factory’s former retail division. Developer St. Modwen Properties, who purchased a 21-acre plot from Pirelli in 2005 and a further nine acres in 2007, intends to construct around 200 houses on a 20-acre site.
Destination Europe: More Chinese Products En Route to Europe?
Now President Barack Obama has stuck 35 per cent import duty on all passenger car and light truck tyres from China for the next three years what happens next? Chinese tyre manufacturers won’t want to sell fewer tyres each year. But US importers, consumers and manufacturers are equally unlikely to want to pay or absorb the additional costs. Tyres & Accessories spoke to a range of US, Far Eastern and Chinese companies and found that manufacturers are having to rely heavily on production flexibility, while traders are now setting their sights on one market in particular - Europe.
Stephen Wu, managing director of Chinese tyre trading operation, Best Choice International, reports that orders from the US stopped came to a virtual standstill in July. Their strategy is now openly towards producing more European market orientated products: “We stopped an SUV/LT project and waited for the decision. And we produced more European UHP tyre sizes, not US sizes.” Companies like Best Choice are now prioritising orders in other markets – especially Europe – where they aim to sell the most popular sizes, UHP and winter tyres. Best Choice is apparently interested in other markets as well, but Wu refused to give further details at this time. As far as Best Choice is concerned there is now zero chance of getting orders in the first year of the tariff, except in the 19-inch and over category. As a result competition is likely to be based on just two factors: price and delivery time.
Beginning by quipping that he didn’t mean to lie at last year’s event when he said the 2008 dinner was to be his last, NTDA chairman Peter Gaster opened this year’s chairman’s speech by explaining that the his chairmanship has been extended while he completes a review of NTDA’s future. Kwik-Fit’s David White, who will succeed Gaster as chairman, is set to take over when the select group of NTDA members has been consulting with have completed their recommendations.
The current chairman was keen to point out the association’s history and strengths: “Our association has been in existence for over 80 years and, in tyre industry terms, is the oldest surviving association and is still going strong! The main themes of any proposed changes are based upon the strength and weakness or pros and cons of our association.”
This was a reference to the association’s recent moves to resist “integration with other organisations.” However, “we would view any trade association that wanted to affiliate or even join the NTDA with an open mind and on its merit,” he added. This means that NTDA will maintain its office in Aylesbury with the ongoing support of its director and staff for the “foreseeable future.”
Excellent Turnout for 80th NTDA Annual Dinner and 2009 TAFF Awards
Around 400 guests filled the Deansgate Suite at the landmark Manchester Hilton Hotel to celebrate the 80th NTDA annual dinner and the 2009 Tyre and Fast Fit (TAFF) awards ceremony. The event, held on the evening of 23 September, saw the industry’s brightest and best gather to celebrate the successes of an industry that is determined to tough out the recession. The turnout alone spoke volumes about the attitude of the business’ leaders, with NTDA chairman Peter Gaster’s speech highlighting the challenges and successes of the industry; and the TAFF awards themselves recognising the achievements of companies within the business. This year’s event was sponsored by ECI International (the organisers of Brityrex, Tyrexpo Asia, Tyrexpo Africa and now Tyrexpo India); well known logistics firm DHL and Tyres & Accessories (and website tyrepress.com), the industry’s leading tyre trade publications. The TAFF awards themselves were compered by Mark Harrison on behalf of ECI International and after dinner entertainment was provided by Ian Irving.
Following the publication of 20,000 voting slips by Tyres & Accessories and the NTDA, and after hours of dedicated vote-counting, the 2009 awards were presented to successful candidates with tyre industry equivalent of “the red carpet treatment.” The fifth NTDA TAFF Awards also differed from previous competitions as it was the first time online voting had been included. In addition to the awards decided by the normal one industry member one vote system, and the NTDA nominated chairman’s award, 2009 saw the introduction of an expert judging panel to decide this year’s innovation award. The panel was made up of the representatives from associations and trade publications including NTDA, TIF, GEA and Tyres & Accessories. And now the results…
KPMG Welcomes “Steady Injection of Government Support”
Following business secretary, Peter Mandelson’s announcement that the UK government will be extending its car scrappage scheme to February 2010, as well as including van owners in those eligible for scrappage discounts, the auto director at ‘Big Four’ professional services firm, KPMG has said that he welcomes the government’s support for the industry:
Government Extends Scrappage Scheme to Include Vans
The UK government is to extend the successful “bangers for cash” scrappage scheme until February 2010 with £100 million in extra funding. Alongside the increased funding the government will work with manufacturers to extend the benefits to van owners with vehicles over 8 years old rather than the current 10 year requirement. Car owners will also get a boost, with the age qualification changed by 6 months to extend the benefits to cars registered on or before 29 Feb 2000 (V registration). The scheme will come to an end in February 2010 or when the funding runs out, which ever is sooner.
So far 227,750 orders have been placed through the scheme. The increased funding enables the scheme to fund a further 100,000 vehicles, bringing total budget to £400 million and covering up to 400,000 vehicles in total. The extension continues as a government and manufacturer partnership, with matched funding providing the £2,000 discount for each scrappage order.
Announcing the news Business Secretary Lord Mandelson said: “The sector has been strongly affected by the recession, but the scrappage scheme has delivered a boost to manufacturers and the supply chain. We have listened to the concerns of manufacturers and are increasing the funding of the scheme to £400 million.”
Technical Tire Consulting: Performance has it Roots in the Process
TTC stands for Technical Tire Consulting, a team of specialists with many years’ experience in the field of tyre manufacturing and familiarity with the latest technologies. During their time in the business the consultants have been responsible for building world class manufacturing facilities, such as those producing drop centre tyres, and have knowledge of all aspects of the business at their fingertips.
French Government to Phase Out Scrappage Incentives
After pioneering the so-called “cash for clunkers” scrappage incentive model in 2008, which was then mirrored in all the major European markets, the French government has announced that it is phasing out its 1000 euros for a 10 year-old car stimulus package. According to financial analysts, this measure had a net positive impact on demand of approximately 200,000 units, or 10 per cent of the market against a gross market impact of 400 units.
The developments in the French market follow the rather more abrupt end of a similar scheme in the German market, where demand for cars purchased under the scheme exceeded supply on 2 September. According to a Deutsche bank report published at the time, the scheme was responsible for 9000 unit sales a day since its introduction.
To avoid a free fall of the market next year, Germany’s car market for example is expected to be 25 per cent down in 2010, the French government has decided to reduce its scheme progressively. Next January the incentive will drop to 700 euros before dropping to 500 euros next July and hitting zero in January 2011. As a result, Deutsche Bank analysts are predicting “a limited decline of French registrations in 2010 of around 1.9 million units, -5 per cent.”
As of September 1 Hayes Lemmerz International has realigned its global operational sites into three regions. According to company president and COO Fred Bentley, "The purpose of the realignment is to become more strategically focused in the operation of the business by aligning the organisation into specific regions. This realignment allows us to continue our global focus on the customer base while creating additional efficiencies from the functional support groups. This is a great move for our business and allows us to continue to develop our future leaders." Mustafa Zaim, managing director of Turkish Operations, will continue in his present role as managing director and will also assume the additional responsibilities coordinating Global Materials management as well as act in an advisory capacity to the EAAP region on operational matters. Zaim will continue to report to Mr. Bentley.
The SMMT has written to business secretary Lord Mandelson asking for an extension to the scrappage scheme, which is otherwise predicted to end in November. SMMT is asking for the scheme to be extended through to the original closing date of the end of February 2010, to counter the likely negative impacts of a return to the higher rate of VAT and the introduction of the first year VED rates. After 15 months of consecutive decline in the new car market, the scrappage incentive scheme has reignited demand, says the SMMT, resulting in year-on-year growth in July and August and a dramatic cut in the rate of decline in vehicle production.
Since it began over 100,000 new vehicles have been registered under the scrappage scheme, with an order bank of a further 100,000 suggesting the scheme will run out of funding in late October/early November. 76 per cent of cars bought under the scrappage scheme were classified in the Mini or Supermini segments.
SMMT now forecasts the new car market to end 2009 at 1.85 million units, above pre-scrappage forecasts but well below the 2.47 million pre-recession five year average. One fifth of the cars registered were either built in the UK or have an engine produced here.
Organisers Note Tyre Market Upturn as Exhibitors Sign-Up for Brityrex 2010
The organisers of Brityrex International have welcomed an upturn in business confidence among tyre sector suppliers as companies continue to invest in next year’s exhibition in Manchester (5, 6 and 7 October) ECI International have confirmed a “healthy” amount of new bookings for the show from “a broad cross-section of domestic and international tyre and automotive specialists.”
Managing director Paul Farrant explained: “There’s no doubt that the market in general is feeling more positive about future prospects than it was six months ago. Speaking to many businesses of all sizes in the tyre, equipment and accessories sectors, it’s clear there is a willingness to consider investing in exhibitions and promotion. That confidence is refreshing and bodes well for Brityrex as well as day-to-day business activity.”
Among the latest companies to commit to the next Brityrex are Daly Tyres, the Irish distributor that has recently opened a new wholesale division in Stoke-on-Trent. This will concentrate on distribution of Taiwanese brand Kenda, with Daly managing director Eamon Daly explaining: “Kenda is a very progressive company and we view them as a great partnership for our business. Brityrex will be the perfect platform to market Kenda and our other product ranges and will be the place for UK and Irish retailers to meet suppliers covering all aspects of the tyre business.”
President Barack Obama’s decision to apply a 35 per cent import duty on all passenger car and light truck tyres from China for a period of three years may have been intended to “remedy market disruption caused by a surge in [Chinese] tyre imports” into the US, but it has also provoked a sharp response from the Chinese ministry of commerce and played havoc with the share prices of Far Eastern tyre manufacturers. China’s state media said the US import duties would cost 100,000 jobs and $1 billion (£600 million).
Announcing the decision (on Friday 11 September 2009), the White House explained that the 35 per cent ad valorem levy would be placed in addition to the existing 4 per cent import duty on imports of Chinese-product passenger car and light truck tyres. The duty will reduce to 30 per cent ad valorem in the second year, and 25 per cent ad valorem the third year. The US International Trade Commission had recommended a 55 per cent tariff in the first year, 45 per cent in the second year and 35 per cent in the third year.
Nynas to Supply Lanxess Rubber Production Following DAE Ban
To maintain its production of synthetic rubber after its utilisation of DAE oils ceases, Lanxess AG will enter into a strategic co-operation with Swedish oil producer Nynas. Lanxess will end the use of DAE oils in its synthetic rubber production as of December 1, 2009, ahead of next year’s European and Japanese bans on the substance.