Popular Science magazine awarded Continental’s Side Wall Torsion Sensor (SWT) Best of What’s New in the technical category on 10th November. Conti thinks that this so-called intelligent tyre is a precondition for the use of Electronic Stability Programs (ESP) of the second generation.
Two men were jailed for eight months at Southend Crown Court in Essex yesterday, for illegally dumping 2,000 truck tyres. The case was brought by The Environment Agency and is believed to be the first time such a conviction has produced a jail sentence in this country.
The Fürstenwalde production base of Pneumant Reifen GmbH is under threat in the long term, Dr. Rainer Schieben, Commercial Managing Director, announced at the Pneumant head office in Fürstenwalde at the beginning of September. As early as this autumn the company will draw winter tyres from the Japanese production for cost reasons, and part of the summer tyre production will also be transferred to Japan. And, according to Schieben, the new owner, The Goodyear Tire & Rubber Company, has already cut the production planning for the year 2000 by 200,000 tyres, which cannot be without repercussions on investment and employment. Schieben gave too high energy costs at Fürstenwalde as the reason for the problems. The current price per megawatt hour for the process temperature is roughly three times higher than in similar factories of the Dunlop parent company in Germany. By international comparison within the Goodyear group the high energy price has become even less justifiable. Pneumant employs a workforce of 550 plus 40 apprentices at the Fürstenwalde production base. 325 people are employed at the company’s second factory in Riesa. The tyre manufacturer is one of the few former GDR companies to have survived successfully. Thanks to an investment volume of 250 million marks since 1996 by the Dunlop parent company Pneumant possesses the most modern production facilities in Europe. In the car tyre replacement market the company is the clear market leader in the new federal states.
Bridgestone is optimistic that it will achieve its stated target of a 20% market share worldwide during next year. The group aims to be number one, or at least number two, in each market. As far as distribution is concerned, the focus is very much on the First Stop franchise system. In a background briefing, high-ranking Bridgestone managers revealed that the companys main goal is to become the dominant player in the world tyre market, regardless of the actions of main competitors Goodyear and Michelin. At present, Bridgestone operates 44 tyre factories in 22 countries around the world.
Oskar Füthen (62), Managing Director of Pneumobil GmbH for almost 20 years, left the Pirelli distribution chain on 30th September 1999. Ralf Brockmann was appointed as the new Managing Director. And what is more, The distribution chain will no longer report to Pirelli Reifenwerke but to the Milan head office, which has taken over responsibility as per 1st October 1999, particularly for the strategic line in connection with the negotiation of terms and conditions.
On 11th November, The Society of Motor Manufacturers and Traders (SMMT) announced a new tyre exhibition for the UK. The show (as yet unnamed) will run alongside the Automotive Trade Show at Birminghams NEC between 29th April and 2nd May, 2001. The SMMT says that it makes good business sense for tyres to be a part of an aftermarket exhibition.
In only two years Bridgestone/Firestone has built a new factory producing tyres for passenger cars, light trucks, pickups and off-road vehicles near Aiken (South Carolina). It is said that the tyre manufacturer invested $US 435 million for this plant.
The tyre factories of Brisa (Bridgestone/Sabanci), Pirelli and Goodyear are all situated within a few hundred metres from one another along a road leading out of Izmit, the town so severely hit by the earthquake. Bekaert also has a production facility nearby, Continental manufactures technical rubber products not far away, and a second Pirelli plant makes cables. It will only be a matter of days until production, only partially interrupted by the earthquake, returns to full strength while the aid campaign has gone into full swing at the same time.
“Serious Tyre Failure” and “Sea of Troubles” Between Continental and Semperit
The Semperit factory at Traiskirchen is facing a cut in car tyre production from the current 2.9 million to 1.4 million units next year. That will put a big question mark over the efficiency of the plant. The works council fears erosion and medium-term closure; well above 100, if not up to 250 jobs will have to go. The threatened workforce is determined to fight this unequal treatment with all the means at its disposal and, if necessary, to create a sea of troubles in public. Whether that can put right the many shortcomings of the past we shall have to wait and see. Cross-border solidarity between fellow workforces is not apparent.
Goodyear: Net Profit of 97.2 Million US $ in Third Quarter of 1999
Goodyear reports a net profit of 97.2 million US $ for the third quarter of 1999 compared with 185 million US $ in the third quarter of 1998. The turnover achieved in the third quarter of 1999 was 3.3 billion US $, 100 million US $ more than in the same period last year. The turnover contribution of its recent acquisition, Dunlop, amounted to 200 million US $ worldwide.
In the first nine months of this year, Continentals sales rose to 6.8 billion Euros, with an EBIT of 385 million Euros. The largest contribution still comes from passenger car tyres, although Continental emphasises the growing importance of its role as a systems supplier. However, it seems that there will not be any striking developments in this segment that will affect the market in the immediate future. But Dr. Kessel is sure, saying: Continental is on the way to Total Chassis Management. Obviously, the company wants to enhance its profile at the expense of its tyre competitors, many of whose shares are performing badly on the worlds stock markets. However, Continentals share price at the moment is also disappointing.
Business analysis specialists Datamonitor predict that the European Fast Fit Market will have an annual growth of more than 4 per cent each year and reach 11 billion Euros by 2004. It is also anticipated that new competitors Ford (who acquired Kwik-Fit) and Fiat (who acquired Midas) will significantly increase their standing in the market during this period.
The management has undertaken an upward revision of the turnover and profit forecasts. Due to increased turnover all business divisions were able to improve their margins, but it seems that General Tire did not entirely come up to the expectations of institutional investors. The Teves result (half-yearly turnover: 1.278 billion euros, EBIT: 27 million euros) came as a pleasant surprise to banking circles. After the first six months group turnover reached 4.449 billion euros, and the EBIT of 263 million euros was roughly ten per cent above expectations. Stock exchange experts value the potential of the Continental share with 25 to 26 euros, which has as yet not been realised. The slightly worrying aspect is the fear that Continental could be lumped together with other, normal tyre manufacturers, e.g. Michelin, Goodyear and Pirelli, which produced rather sobering results.
Michelin Reaps Benefits of Bridgestone and Goodyear Mistakes in the USA
The current winner in the American car tyre replacement business is Michelin. On the one hand, the French profit from the catastrophic supply situation of their two main competitors, Goodyear and Bridgestone, which achieve so-called fill rates of 60 p.c. or even less, but they also reap the benefits of the successful introduction and implementation of their multi-brand strategy, which has made a demand management possible. In contrast to their big competitors the French have a very clear brand policy with no further differentiation within a brand, and they no longer produce private brands, all of which considerably shortens the reaction time to changed market conditions. Goodyear and Bridgestone cannot achieve Michelin prices. The groups will not improve their unsatisfactory fill rates as long as they also manufacture large quantities of private brands. The Japanese cannot develop a multi-brand strategy since they lack a strong leading brand – Bridgestone not being blessed with a high degree of brand awareness everywhere in the USA. For a long time the Americans differentiated very strongly within the Goodyear brand; now they have to position Dunlop tyres as well. That will also mean the need for significant investment in the brands. Furthermore, Goodyear managers in particular are currently confronted by a hostile gut reaction from the trade, whether capable of rational explanation is neither here nor there.
Goodyear: Gibara Announces New Multi-Brand Strategy
The differentiation within the Goodyear brand, which has been most conspicuous in North America, will soon be a thing of the past. On Thursday Gibara declared in front of analysts in New York that the Goodyear brand will in future only be a premium brand; the group’s range will be complemented by Dunlop (medium brand) and Kelly (economy/budget brand).