September is show time in Frankfurt. This year we have just seen the IAA for cars and motorcycles, the 58th such event. Almost 1,200 exhibitors from 43 countries displayed the whole width and breadth of automotive progress on 225,000 square metres of indoor and outdoor exhibition space. The theme of this year’s exhibition, Auto: Treffpunkt Zukunft (Car - Meeting-Place: The Future) must also be understood as the industry’s programme: Car manufacturers alone offered 51 world premières, eight European and 38 German premières, not counting the numerous innovations of vehicle component suppliers, the motor manufacturers’ development partners. Apart from new production-line cars, futuristic concept cars, motorcycles and special vehicles Frankfurt showed trailers, parts and accessories, tuning products, aids for vehicle maintenance, protective clothing, traffic guidance and information systems. Tyre manufacturers with IAA stands of their own were Michelin, Continental, Dunlop and Pneumant. The second part of the 58th IAA - the commercial vehicle side - will take place from 23rd to 30th September 2000 under the theme Nutzfahrzeuge: Für alle auf Achse (Commercial Vehicles: For Everybody on the Move) and also be held at Frankfurt/Main. The organisation will also be in the hands of the Association of the Motor Manufacturing Industry (VDA).
This is the answer: Michelin filed law-suit against Bandag
Michelin filed a lawsuit against Bandag for illegally restricting competition in the US-retread market. The law-suit contends that Bandag has engaged in anti-competitive practices, which create a monopoly for it in the sale and distribution of tire retread systems.
In its last issue NEUE REIFENZEITUNG speculated about an agreement between Montupet and Michelin in the area of aluminium cast wheels. The talks seem to be on hold for the time being, because at the moment both partners have their hands full with orders. Montupet is currently doubling its capacity to 2.5 million cast wheels. Kronprinz, the Michelin subsidiary in Solingen, is able to cast 1.4 million wheels with the equipment already in place. In its search for a strategic alliance partner (without seeking a direct participation) Michelin has now found steel wheel manufacturer Meritor, which has factories in Mexico and Brazil. Meritor is a business division of Rockwell, the large supplier to the automotive industry, and is also known by the trade name Fumagalli. With an annual capacity of about 25 million steel and aluminium wheels Michelin is roughly double the size of Meritor. The strategic benefit for Michelin is not only the geographical location of the two Meritor factories, but above all the close relationship between the supplier Rockwell and Chrysler. The principal reason for the cooperation between M+M, however, was Renault’s decision to produce the Mégane also in South America with the same steel wheels as in Europe, where they are made by Michelin. To comply with local content requirements, the South American Mégane will have Meritor wheels.
At a press conference in Milan, Mr. Marco Tronchetti Provera and Mr. Giovanni Ferrario reacted to speculation that Pirelli might diversify into other automotive components, as has Continental. Tyres will continue to be an absolute core global business for Pirelli they said, and emphasised that Pirelli would maintain its independence, while seeking alliances wherever appropriate.
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.
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 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.
Tyres for the “King’s Class” – Bridgestone’s Formula One Engagement
It is a well-known fact that Bridgestone does not stint itself in its Formula One commitment. For instance: The number of tyres carted to every race is 2,640 in two different compounds for dry and three different compounds for wet weather. Together with the costs of research and development plus marketing/advertising (which definitely accounts for the highest expenditure) it may amount to a nine-figure sum. In this context one has to ask: Cui bono? Or: Why do the Japanese involve themselves in Formula One at all? The current market share of the tyre giant in Europe is estimated to be about twelve per cent, therefore leaving room for further growth. And what would be more suitable for a Far Eastern tyre group keen to catch up in the lucrative European market than its omnipresence in the most important motor racing event worldwide (only in USA Formula One is met with relatively little interest)? When all is said and done: twelve of the 16 races are run on European soil. Takeshi Uchiyama, Managing Director of BS/FS Europe, describes his company’s objective, We are determined to raise our global brand awareness.To put it simply: If the Bridgestone logo is clearly visible every fortnight adorning streamers, bridges, vehicles, overalls, drivers’ caps and, last but not least, all the tyres, that must sooner or later penetrate the memory or consciousness of the mass media public. Ideally it also raises significantly the image of the brand as a low-profile quality tyre. And once this perception takes hold and people’s high opinion is tranferred to other segments, this reputation will not only benefit the high-performance segment but also other types of tyre.
Pirelli has published its figures for the first nine months of 1999. Turnover is up 15%. The Cables and Systems sector turnover was 2,805 million Euros (first nine months of 1998 2,036 million) while the Tyre Sector turnover was 1,917 million Euros (2,068 million). Gross operating profit was 489 million Euros (492 million) and consolidated operating profit was 231 million Euros (264 million).
Scrap Tyre Recyclers Meet in Schwerin to Find Feasible Solutions
Under the headline Recycling von Altreifen in Deutschland – Aktuelle Lage und Möglichkeiten für die Zukunft (Scrap Tyre Recycling in Germany – The Current Situation and Future Possibilities) a two-day conference was held in the banqueting hall of Schwerin Castle in mid-October. Joint hosts of the first meeting of this kind on German soil were the Mecklenburg-Vorpommern Ministry of the Environment and the European Tyre Recycling Association ETRA. The conference in Schwerin is part of a series of European meetings organised as Regional Information Briefings by ETRA for the airing and discussion of current questions and problems in the tyre recycling industry with the object of eventually finding common solutions. The programme was opened with a presentation covering the current situation of the scrap tyre recycling industry in Germany. This was followed by reports/discussions on the current state of the recycling technology as well as the opportunities for opening new markets for recycled scrap tyre products, in which almost 100 experts from the areas of tyre trade and disposal, retreading, material extraction, construction industry/road building, technology, equipment industry, waste disposal took part together with representatives of the civil authorities. In the course of the conference it became clear, however, that there was still a widespread lack of technological know-how and a considerable ignorance about how to market the recycled products. One reason is a limited demand for such products, another a lack of innovative and worthwhile product ideas and of adequate marketing concepts.
Talking to the German newspaper Handelsblatt, Hankook President Choong-Hwan said that the Korean tyre manufacturer wants to strengthen its market position in Europe. Having already expanded with two factories in China, Hankook plans to produce tyres in the EU as well. This will be achieved either by building a new factory or acquiring existing facilities.
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.
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).
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.
Continental Introduces Two New Winter Tyre Tread Patterns
For the launch of its two new winter tyre models, the ContiWinterContact TS 780 and the transporter and van tyre VancoWinter at the beginning of October the Continental AG management chose a very special venue: Iceland. However, a blizzard that raged for days prevented practical tests of the new tyres on the selected glacier. Developers of winter tyres are always faced with the classic dilemma: Do they design for optimum grip on snow or on dry roads? The development of the TS 780 for vehicles of the compact and lower medium classes aimed at reducing the discrepancy between the two objectives. An important innovation is a sipe construction which tries to emulate the architecture of beehives with its honeycomb shape. According to the manufacturer, the honeycomb sipe has clear safety advantages when cornering on snow. A directional tread pattern and the latest silica compound technology are additional features responsible for the new tyre’s good driving characteristics in wintry conditions as well as on dry and wet roads. It is available in all European markets needing winter tyres, initially in 13 sizes from 145/80 R 13 75Q to 185/60 R 14 82T. The VancoWinter was specially developed for medium and heavy vans. Traction on ice and snow is provided by sipes which are incorporated in the tread blocks. To achieve a significant improvement over its predecessor, the LMS 70, the VancoWinter’s sipes and blocks are twice as high. Its behaviour on icy roads is to be improved by distributing the pressure on the ground more evenly. The van tyre is immediately available, at first in nine sizes (from 185 R 14C to 195/65 R 16C).