‘Welcome to the World of Motortainment’
The new A1 Grand Prix series is set to commence in autumn next year. As the latest edition to the motorsports calendar it is not being viewed as competition to F1 and has managed to position itself in a different sector of single seater racing. Known as the World Cup of Motorsport, A1 differs from the current F1, in that the contenders will represent their home countries and all cars will have the exact same specifications having been built by the same manufacturer. The sport will use 3.4-litre V8 engines, mounted on a Lola chassis and fitted with Cooper tyres. Founded by Sheikh Maktoum, a member of the ruling family of Dubai, and businessmen Brian Menell and Antonio Teixeira, the FIA sanctioned series will run in motor racing’s traditional ‘off’ season. It is described by the organisers as being unique in the fact that it brings together a sustainable business model with the high speed excitement of motorsport. Amongst the countries that have secured their place so far are the UK, South Africa, China, Portugal, Pakistan, Lebanon, Australia, Canada and Malaysia. The participants represent more than 80 per cent of the world’s population. And Dubai, Bahrain, Qatar, China, South Africa, Malaysia, Indonesia, Japan and Australia have already been selected to host the first A1 Grand Prix season, and there is still the possibility of a further two events. There has been much emphasis put on the fact that the sport will provide a patriotic atmosphere between contenders and their supporters, with chairman of the South African team, Tokyo Sexwale, commenting: “ It will create a new patriotic edge to the sport, and add a new dimension to one of the most popular sports in the world. We are proud and pleased that there will be a South African entrant in this exciting global event. We fully subscribe to the need to spread motor racing away from its traditional European and North American roots and into the developing world. Welcome to the world of Motortainment.” One of the essential elements of the A1 GP is that it needs to be thrilling to watch. The belief that it will be a compelling spectacle for all motorsport fans was strongly endorsed when Sky Sports bought the broadcasting rights for live coverage in the UK, of not only the races, but also the practice and qualifying sessions. Sky Sports managing director Vic Wakeling said: “We have been sold on the concept of a genuine test of driving skills and it has the added attraction of providing us with more international sport throughout the winter months.”
Continue ReadingThe End of the Spare Tyre? – Update
Following the publication of a new “question of the month” on the T&A website, half of those who responded said: “run flats bring as many complications as benefits.” Perhaps you disagree and believe that the only way to introduce the products on a wider scale is to sell them as original equipment. Perhaps you have stronger opinions and believe that introducing run flat tyres in this way will only price consumers out of the market. Either way Tyres & Accessories would like to hear from you. To select your answer and leave a comment, please click here.
Continue ReadingBridgestone’s Shares Fall
Bloomberg has reported that Bridgestone Corporation shares fell by up to two per cent after the Nihon Keizai newspaper reported that the company is expecting its first decline in pretax profit in four years. Bridgestone stock fell by as much as 40 yen to 1990 yen after gaining 42 per cent during the course of the last year. The Nihon Keizai reported that the tyre manufacturer’s pre-tax profits are likely to fall by 17 per cent to 150 billion yen (£763 million) because of an increase in the price of oil and other raw materials. The newspaper did not specify where it obtained its information. “It is based on the newspapers own reporting,” Bridgestones spokeswoman Setsuko Ozaki said, declining to comment on the report. According to Bloomberg, Bridgestones 2005 sales may rise 4 per cent to 2.5 trillion yen. Bridgestone may also report a record group net income of about 140 billion yen, up 30 per cent, after changing its employee pension fund system, the Nikkei newspaper said. Last month Bridgestone said it would raise the price of its tyres in 2005 in order to protect earning from rising raw material costs. Bridgestone and Firestone branded tyres used in passenger cars, trucks and buses will rise by between 5 per cent and 10 per cent, the Tokyo-based company said on 8 December.
Continue ReadingEurope’s Evanescent Motorsport Culture
Pierre Dupasquier Looks Forward to New Formula 1 Season Motorsport isn’t just about speedy overtaking manoeuvres and exciting finishes. Instead a major part of its attraction is owed to the people that live for motorsports and who – if missing – would make the event that bit less interesting. Without doubt one of these people is Pierre Dupasquier. For 30 years the Michelin motorsport director has been generally regarded as the driving force behind the French tyre manufacturer’s involvement. In addition, he is one of the few who, although not a driver himself, is allowed to comment on races on TV. Tyres & Accessories had the opportunity to meet the passionate 67 year old Frenchman and talk about the coming season. For a long time Pierre Dupasquier has been part of the Formula 1 circus, having worked for his employer Michelin in a number different fields. Be it Formula 1, the World Rally Championship (WRC) or MotoGP, he lives for everything that’s fast and runs on two or more wheels. Although interested in and involved in all sorts of motorsports, Mr Dupasquier’s committed to the premier league of motorsports, namely Formula 1. This season wasn’t as glorious as it might have been for Michelin. Out of the 18 races Bridgestone, its only competitor in the Formula 1, won 15. Michelin’s problem? The domination of Michael Schumacher and his Ferrari with its Bridgestone tyres.
Continue ReadingBridgestone’s Shares Fall: Update
Deutsche Bank analysts have cast doubt on the negative predictions published in the Japanese business press. According to the market observers, reports that Bridgestone’s recurring profit is set to fall 17 per cent year-on-year may not be as accurate as they seem. Although the article cites high raw material costs and yen appreciation, it fails to take into account tyre price increases, which started being implemented in Japan last year. The analysts explained that in the last few year Bridgestone has recorded strong earnings, defying the Nikkei’s projections. As a result the bank says it will not change its earning projections or rating, adding that if the share price dips below 2000 yen this would represent “an attractive investment opportunity.”
Continue ReadingChanging Landscape of the Indian Market
India’s strong tyre manufacturing base dates back over five decades. With a current production level of about 55 million tyres the country’s industry is expected to grow seven to eight per cent per annum in the near future, according to market insiders. Increases in domestic demand and exports will bring about a change in the landscape of Indian manufacturers which can already be characterised as an oligopoly, with few dominating players among dozens of competitiors. In order to comprehend the changing realities of the Indian market it is important to have a close look at the companies involved and major trends. The years to come will witness many changes – however the eventual outcome is still open for change.
Continue ReadingWaste Not – Want not
The story of a successful industry initiative The EU Landfill Directive prohibited the landfill of whole tyres from 1 July 2003 in all EU states and will ban the landfill of shredded tyres by 1 July 2006. Fortunately, however, the UK has a well-developed collection system and a diverse recycling infrastructure for old tyres when compared to many countries. Currently most of Britain’s tyres end up in some kind of beneficial re-use. Britain’s motorists, hauliers and others collectively generate over 400,000 tonnes of waste tyres annually. Industry estimates suggest that at least three quarters of these are already re-used in some form or other. Some of the many ways in which tyres can be reused include as fuel, carpet underlay, recreational surfaces and in the form of granulates. In the truck sector retreading is a highly efficient re-use of a worn tyre. Using tyres as fuel for cement kilns is another way of re-using large quantities of tyres. And there is considerable remaining capacity for the UK’s cement kilns to take additional tonnage. At the same time the number of new uses for old tyres continues to increase. The fact that tyres have a very high calorific value means, as a fuel, they are not dissimilar to coal. Furthermore, when burned as a co-fuel, tyres can improve the general combustion quality considerably. For all of these reasons tyre manufacturers, with the help of the TIC’s Responsible Recycler Scheme, are confident that the UK will continue to meet the terms of this major EU directive. If there is a downside to this positive story it is that beneficial and responsible recycling comes at a price – albeit a modest one. However small though, it is a price that a few companies still seem unwilling to pay. To promote some more robust standards in the collection and disposal of end-of-life tyres and to help eradicate the scourge of ‘fly-tipping’ and rogue operators, Tyre Industry Council launched its Responsible Recycler Scheme in late 1999 and although just five years old, this flagship initiative has come a long way in a short time. Though initially restricted to just tyre collection companies, it was quickly realised that the commonality of interests between collectors and reprocessers demanded that the Scheme’s remit be widened to include reprocessors as well. Behind the formation of the scheme was the clear recognition that used tyre collection and re-processing were businesses which deserved recognition in their own right and which together had an important role to play in helping tyre manufacturers, retailers and indeed government itself to meet the EU Landfill Directive on used tyres. Those leading the scheme realised at an early stage that whether or not the concept of producer responsibility was introduced into the UK there was a need for collectors and re-processors alike to adopt concepts of “best practice” in response to the challenges ahead. That is why today the scheme puts great emphasis on its audit regime and believes it can demonstrate full traceability, something that is essential for maintaining a good reputation. For the TIC, transparency, traceability and accountability are cornerstones of its scheme. Responsible retailers, fleet companies and other tyre users that work with scheme members are guaranteed that the tyres collected by the Responsible Recycler Scheme companies are disposed of in an environmentally friendly and acceptable method. Whether they are recycled or used as fuel in cement kilns, the Responsible Recycler Scheme helps its members comply with their duty of care obligations as well as protecting the environment. As a measure of its success the scheme continues to grow and to attract international interest. From a single founder member in 1999, it now has reached a temporary ‘high’ of 22, with more applications in the pipeline. In fact such is the sense of purpose and collective professionalism that the scheme has engendered that its members elected to become a trade body in their own right, known as the Tyre Recovery Association (TRA). Apart from operating the Responsible Recycler Scheme, which is now a registered trade mark, on behalf of the Tyre Industry Council, the TRA will have the independent ability to pursue specific issues at both industry and government levels, generate performance data specific to its members businesses, as well as develop stronger international links right across Europe.
Continue ReadingApollo Tyres Aims At Europe
Large-scale Indian tyre manufacturer, Apollo Tyres, is investing 2.5 billion rupees (more than £30 million) in production expansion and is aiming to export more to the European market, Indian news sources are reporting. Company chairman and managing director Onkar S Kanwar told Financial Express: “We are looking at investing [2.5 billion rupees] in the existing facilities in the next fiscal ending March 2006.” Mr Kanwar explained that nearly half of the spending would be pumped into the Gujarat unit alone. “This calendar, we are more aggressively looking at tapping the European market. This can be through direct marketing or even through distribution alliances,” he added. At the moment the company makes between 15 and 20 per cent of its revenues from exports to other countries besides Japan and Europe. Apollo Tyres also recently entered into a joint venture with Michelin. The joint venture, Michelin Apollo Tyre Pvt Ltd, is focusing on manufacturing, marketing and sales of truck and bus radial tyres. “In the first phase, we will manufacture truck and bus radials and sell under the Michelin and Apollo brand. These products will be sold across the country,” he said.
Continue ReadingThe Latest from the Agri-World
The Royal Smithfield Show has always been the place to be seen for those involved in agricultural tyres. Renowned as one of Europe’s largest and most comprehensive agri-business events, this year’s exhibition will span 60,000 square metres of indoor space and is expecting up to 50,000 visitors from around the world. Around 20 companies, including ATS Euromaster, Bridgestone, R H Claydon, Goodyear Dunlop, Michelin, Mitas UK, Solideal, Tyremart and Wheel Solutions, will represent the agricultural tyre and wheel sector with a range of new and existing products. Tyres & Accessories will report the latest information from the agri-world and in the light of ongoing UK trade show debates will ask whether this is one tradition the UK industry can really afford.
Continue ReadingSEMA goes hip-hop?
Last year 105,000 people attended the SEMA show. This time around the association expects to have attracted a similar number, roughly half of which are likely to be national or international buyers. According to the association, “early analysis of show activity and reports from members suggests a significant increase in buyer participation and business.” The success of the show has obviously been influenced by the large amounts of publicity that it generates. Tyres & Accessories reviews some of the highlights of a show that has all the glitz and glamour one would expect from an exhibition held in Las Vegas. Cashing in on the hip-hop culture and its associated appetite for vehicle modification, the SEMA show’s organisers were keen to point out that “car enthusiast celebrities” Snoop Dogg and Usher were present. Not to mention the television production companies responsible for a new generation of fly-on-the-wall automotive tuning programmes including Overhaulin and Pimp My Ride. The show’s organisers also noted the presence of celebrities with just a little less street cred, namely Jay Leno and Hulk Hogan, not to mention motorsport luminaries like Mario Andretti. In recent times, a number of manufacturers have tried to cash in on the novelty value of both tuning and the lucrative street-culture attached to it. Pirelli tyres, for example make regular appearances on MTV’s Pimp My Ride. The Italian manufacturer’s products have also successfully managed to find their way into the lyrics of various rappers and an association with one of the world’s most famous basketball players. According to those behind the specialist equipment extravaganza, “the SEMA show has become a magnet for anyone connected with the automotive culture.” And this is exactly what the they want to market the show as, a show that is all things to all people. In the organisers’ words: “Only at the SEMA Show can you find: a classic roadster alongside the newest in off-road racing and performance technologies; a place where Shaquille O’Neal’s DUB-customised Cadillac Escalade competes for attention with the hot new Dodge Magnum or Chrysler 300C alongside Jay Leno’s totally unique Oldsmobile Toronado.” During SEMA 2004, tyre manufacturers were keen to make sure their products were the centre of attention, with some going to greater lengths than others to ensure that this was the case.
Continue ReadingWeber Hydraulik UK Goes It Alone
After nearly three years of preparation, Weber Hydraulik (UK) recently completed a management buyout becoming a wholly independent company. The business was previously managed by parent company Weber Hydraulik GmbH based in Gϋglingen, Germany. As a stand-alone company, Weber Hydraulik (UK) will continue to be a top supplier of hydraulic equipment to the automotive industry. It is now a stand-alone firm, managing sales, service and marketing from its head office at the Broomhills Industrial Estate in Braintree, Essex. The company’s new senior management team, travelled to Germany to present Weber Hydraulik GmbH’s chief executive, Dr Haselman, with a “big cheque” to conclude the deal. One of the new directors, Doug Tokley, commented: “We will continue to provide the level of service our customers have come to expect and are now looking forward to a very prosperous future.”
Continue ReadingTrelleborg Organises Relief Efforts in Sri Lanka
The Trelleborg Group has been working since the day after Christmas to ensure that none of its employees is missing and has organised relief efforts, primarily in Sri Lanka. Trelleborg, which has approximately 22,000 employees, has operations in several of the countries affected. Reports to date indicate that none of Trelleborg’s employees are missing. The company is continuing to gather information to establish the certainty of this. The Group has approximately 800 employees in Sri Lanka. They have been heavily affected, and some have lost their homes. Since the disaster first struck, Trelleborg has focused its relief efforts on Sri Lanka. This has involved providing food, medicine and clothing to disaster victims. Efforts to rebuild homes that were demolished are ongoing. The company has allocated just over 2 million Krone for relief to Sri Lanka. In addition, the Group has donated 100,000 Krone each to Save the Children and the Red Cross. Individual Trelleborg employees have also donated money toward relief efforts. Trelleborg’s two plants in Sri Lanka are intact and production is under way.
Continue ReadingWholesaling and Retailing In a Difficult Market
Magowan Tyres is a family-owned and run retail and wholesale tyre business, based in Belfast. The founder, Darryl Magowan, has been in the tyre industry for more than three decades and is still in charge of the overall direction of the company. His son, also called Darryl, is managing director of the company and his speciality is purchasing. With the Northern Ireland market being, in his phrase, exceptionally price conscious, it is a distinct advantage if you can buy cleverly. Magowan is very active on the parallel market, importing around eight containers a month from Europe and the USA. For almost 20 years, Magowan Tyres was purely a retail business, moving into wholesaling only three years ago. I put it to Darryl Magowan (Jr.) that this was an odd time to enter the wholesale sector, with rising transportation and associated costs. His response was that the company had examined the situation carefully and weighed up the pros and cons. The main reason was that there was a growing demand in the Irish market for ultra high performance tyres and a lack of wholesale supply. The main market for Magowan Tyres is Northern Ireland, especially Belfast, where the company offers deliveries up to five or six times a day, if required. The service in the Irish Republic is less frequent, but a next-day delivery is standard. Because of the low density of population, which, apart from the major towns and cities, is very spread out, running a wholesale operation efficiently and profitably means keeping a close eye on day to day running.
Continue ReadingBorgWarner Executes Majority Takeover of BERU
BorgWarner Germany GmbH, Heidelberg, has announced that the closed share purchase agreement to purchase the majority of BERU AG’s shares, has been enforced. The announcement follows confirmation that BorgWarner Germany had agreed a share purchase agreement with The Carlyle Group and a group of family shareholders. This agreement accounted for 62.21per cent of BERU AG’s shares. As a result, two representatives of the Carlyle Group (Mr Gregor Böhm and Mr Heinrich Rutt) and two other businessman resigned from the supervisory board.
Continue ReadingMarket Prepares for Breakthrough
There has been much talk about the Chinese tyre market in recent months. Now, following the news of Amtel’s takeover of Vredestein, and the collapse of one of Continental’s joint ventures, the Russian market has been a hot topic. But what about India? The Indian market may not be as large as Russia’s, but it certainly offers many challenges and opportunities to the companies working within it. One such opportunity is radialisation. Currently radial products only make up a very small percentage of the Indian truck tyre segment, around two per cent. And, according to those involved, there is a large backlog in demand. For instance, just recently Michelin entered into a joint venture with Apollo Tyres in order to produce radial truck and bus tyres destined for the domestic market. Pirelli and its partner, Ceat Ltd is also looking to fill the same gap in the market. No doubt other Indian manufacturers will follow suit in the future. Another example, and in this case a big technological challenge, is the production of radial passenger car tyres. Even so, this sector is way ahead of the truck market with 85 per cent of the segment occupied by radial tyres. According to industry association ATMA this figure is likely to peak at 97 per cent in the coming years. But one of the biggest factors influencing the Indian tyre market is the advance of motorisation. As this process gains momentum, more and more Indians want to and can afford to own passenger cars. In the last 10 years automobile production in India has quadrupled, last year alone it increased by an impressive 36 per cent. Within the pages of this supplement on the emerging Indian market, TYRES & ACCESSORIES will give an overview of the major factors that are influencing the market and the big players that are trying to stake a claim in a market they believe should be theirs. Subscribers to Tyres & Accessories can download the supplement in advance of publication. Please click the more button to download the file.
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