More Toyota capacity at Burnaston
Toyota will increase capacity at its UK plant in Burnaston to 285,000 vehicles by 2005 (220,000 at present). The addition investment will total 50 million pounds. The Japanese car maker has begun a program of increasing capacity in Europe to 645,000 vehicles from 500,000 previously.
Continue ReadingYokohama to License Tyre Inner Liner Technology to ExxonMobil
The Yokohama Rubber Co., Ltd., announced that it reached an agreement to license ExxonMobil Chemical Company, a division of Exxon Mobil Corporation of the United States, technology in connection with the Yokohama Advanced Liner (YAL), a new patented inner liner for automotive tyres. In addition, Yokohama and ExxonMobil Chemical are combining their respective expertise in the field to improve and advance the performance of YAL. The agreement also grants ExxonMobil Chemical rights to commercialize and globally market YAL related materials in the future.
Continue ReadingGoodyear Names Kramer CFO, Tieken to Retire
Richard J. Kramer, senior vice president, strategic planning & restructuring for The Goodyear Tire & Rubber Company, has been named executive vice president and chief financial officer effective June 1. Kramer (40) replaces Robert W. Tieken, who will retire on May 31. Tieken (65) has been Goodyears CFO since May 1994.
Continue ReadingBERU increases revenues by more than 16%
In the 2003/04 financial year (ending March 31, 2004), BERU Aktiengesellschaft (Ludwigsburg) increased its sales revenues by 16.4% from €304.5 million to €354.5 million.
Continue ReadingMichelin is looking forward to next Formula One race at Nürburgring
Seven days after Monaco, May 28-30 Formula One is poised to return to another of its traditional venues – Germany’s Nürburgring. Michelin is approaching the seventh race of the season in a positive frame of mind: Jarno Trulli (Renault) and Jenson Button (B·A·R-Honda) scored a memorable one-two for the company in Monaco and Ralf Schumacher (BMW WilliamsF1 Team/Michelin) won at the Nürburgring in 2003, when he led team-mate Juan Pablo Montoya across the line. “We know the Nürburgring well and have achieved some good results here in the past,” says Pierre Dupasquier, Michelin Motorsport Director. “We finalised our tyre options for this race a couple of weeks ago, because there hasn’t been time to test since our tremendous victory in Monaco last Sunday. We will have three dry-weather compounds available and these all come from the softer end of our range, because the Nürburgring isn’t especially abrasive. It is what I would call a ‘balanced’ track. The loads on the front and rear tyres cancel each other out during the course of a lap so the wear rate tends to be very even,” adds Michelin F1 Programme Manager Pascal Vasselon. “It is always vital to have a suitable tyre compound at the Nürburgring, because conditions are very changeable, and I am confident Michelin will provide us with exactly that,” comments Ralf Schumacher with regard to the tyre set-up.
Continue ReadingNew EU Rules Warning from Ford
New EU directives on vehicles are likely to add 5,000 Euros (3,340 GBP) to the price of an average car. Speaking at the Birmingham Motor Show, Roger Puttnam chairman of Ford in Britain, warned that manufacturing margins were already thin and that mounting regulatory costs would have to be passed on to the consumers. Puttnam singled out new rules on vehicle recycling, the control of chemicals and safety, all of which are to be implemented by 2008.
Continue ReadingHankook Tire Supplies Ford with Performance Tyres
Hankook Tire has concluded a 3-year agreement to supply Ford Motor with 140,000 VR-rated (up to 240km/hr) K105s tyres annually. The tyres will be mounted on the Ford Mondeo, a high-quality family car, and will bear the Hankook Tire logo. The export price, to include replacement tyres, will total 22 million euros over three years.
Continue ReadingSmarTire: $15 Million Standby Equity Distribution Agreement
SmarTire Systems Inc. (OTCBB: SMTR) announced that the Company has signed a $15 Million Standby Equity Distribution Agreement with Cornell Capital Partners LP. This financial instrument replaces the $15 Equity Line of Credit arranged by HPC Capital Management in 2003. SmarTire also announces that it has arranged a second $750,000 unsecured, promissory note with Cornell Capital.
Continue ReadingGoodyear aircraft tyres are recommended
In an ambitious test project, the american consumer magazine The Aviation Consumer has undertaken, the magazine bought 11 aircraft tires and subjected them to 200 simulated landings, plus a skid test. Sometimes the cheapest tire isnt the best deal. What matters most is tread depth and the more, the better, the magazine said. In tread depth alone, Goodyear’s “Flight Custom III” was the winner in the June issue.
Continue ReadingWarnair part of SRI
Since 1st of January 2004 the business field Deflation Warning System DWS (Warnair) belongs to Dunlop-Tech GmbH, a 100% daughter company from SRI. So DWS is not part of the joint venture Goodyear Dunlop.
Continue ReadingBalkrishna Tyres: Looking for growth
The eyes of many large companies in the West are turning increasingly eastwards, with Asia and the Pacific Rim being touted as the growth markets of the early 21st century. As such, multinational companies are falling over themselves to invest in manufacturing across a variety of industries. Or so the received wisdom goes, but this attitude is a trifle simplistic as it implies that the East is waiting for western companies to come to their aid and show them how things are done. Another misconception is that, when people talk about the East as a potential industrial powerhouse, most people are talking about China. And there is little doubt that China has real potential, but it is by no means alone; there is another giant in the East preparing to flex its industrial muscles and that is India. Not only does India have enormous human resources, but it has an established industrial base – companies in India are not reliant on western firms introducing technology and ideas, as they have been manufacturing products for domestic and foreign consumption for many years, in many industries. This is certainly true for the tyre industry, as India has a number of companies producing products which perform well on the punishing Indian domestic market, with its lack of good roads and overloading as the norm, as well as outside countries with more sophisticated infrastructures. It could be said that, if you can make a tyre that can withstand the rigours of Indian roads, then it will work anywhere. One of the leading tyre manufacturers in India is Balkrishna Tyres (BKT), based in Mumbai. It is part of the Siyaram Poddar group, which is a conglomerate turning over US$ 250 million a year and, apart from tyres, has interests in textiles, clothes, rubber products and paper. BKT established a factory at Aurangabad, in western India, in 1988, which had a capacity of 3,000 tonnes per annum and all related facilities, including an in-house R&D department. Four years later, the company developed a range of light commercial vehicle tyres, aimed largely at the export market and, in 1996, the product range was expanded to include industrial and agricultural tyres. Exports began to Europe, the USA and Australasia. Overseas sales led to an expansion programme in 1999, entailing an investment of US$ 50 million. As sales increased, so did the range of products to include flotation and MPT tyres. In 2002, production capacity was doubled at a stroke when BKT acquired a factory at Bhiwadi; in the same year BKT was awarded ISO 9001:2000 quality accreditation by KPMG, Netherlands. Last year an expansion programme was successfully undertaken at the Bhiwadi factory and the product range enlarged to include ATV tyres, plus tyres for lawn and garden implements and earthmovers. As BKTs reputation has grown, so too has its export business, until today 95 per cent of production is sold outside India, in both replacement and OE markets. The main markets are Western Europe, North America and Australasia, although BKT has distributors across the globe, on all continents except Antarctica. Looking ahead, BKT aims to increase its global presence and has planned what the company calls an ambitious expansion programme, costing over US$20 million, which will further increase the product range and production capacity. Exports will form a key part of this strategy, with BKT looking to consolidate and grow its presence in existing successful markets and to move more aggressively into new markets, such as Eastern Europe, Latin/South America and Africa.
Continue ReadingContiNetwork: The only truly independent tyre service network
Recent years have seen the commercial truck tyre market move in favour of the Independent dealer. Where previously the fleet sector was dominated by the Equities – ATS Euromaster, Motorway/Hi-Q, National, and Central – the divestment and rationalisation that has taken place over the last five years has enabled the Independents to become a significant player. In fact, at a recent market trends presentation, Continental Tyres estimated that the Independents are now responsible for nearly 50 per cent of all tyres being sold to the market. Supplying tyres to the truck fleet market, however, is big business and it takes a professional approach backed by a major manufacturer to get anywhere in the fleet business. Not only that, it takes a national, and ever increasingly, international approach to the market. That makes life difficult for the Independent dealer who cannot realistically deal with fleet business in all corners of the UK, never mind offer European cover. The solution for the Independent is to join a tyre services network that can handle the approach to the national fleets and through its members offer national, or even international cover for fleet customers. ContiNetwork, set up several years ago by Continental following its divestiture of National Tyres, is one such service network and forms Continental’s primary route to market for commercial tyre sales and service. Interestingly, Continental is now the only service provider to concentrate its distribution solely on the Independent network. Something that is of great importance to the Independent dealer who could often find himself competing against a service providers own Equity for the same business yet at different prices. ContiNetwork has since established itself as one of the leading Independent networks and, according to Continental, services more national fleet business than any other Independent network. With 49 member companies – so-called ContiNetwork Partners – with some 200 tyre depots covering the whole of mainland Britain, its members are in a position to be able to deal with Continental’s national and regional fleets alongside their own contracts. The package ContiNetwork gives its members is more than just tyres. There has to be a competitive product certainly, but ContiNetwork works to develop relationships and build confidence with its members.
Continue ReadingVredestein: Two years with Bert Stellinga at the helm in the UK
Bert Stellinga has now been installed at Vredesteins Wellingborough UK headquarters for two years. In that time Vredestein have launched new high performance tyres and taken steps to develop the brand awareness in the enthusiasts market in the UK, whilst at the same time developing their share of the agricultural tyre market. It has very much been steady as she goes for the Dutch tyre manufacturer. Bert Stellinga told T&A that the UK is a major market for Vredestein and that progress was being made in both the UK and the Irish markets. However, to get a better picture of the company it was important to understand the wider position of Vredestein as an organisation. 2003 saw Vredesteins year on year sales on the increase and the company managed to record a profit, very close to that earned in 2002. During the year there was also a stock reduction exercise which released funds and made the whole business more profitable. The fact that Vredestein is making a profit, says Stellinga, enables the company to invest in people and product, to develop new services. For instance, in some markets in the European Union we have our new Internet Ordering facility in place. This allows customers to access stock records, place orders and arrange delivery on line, at their convenience. The strength of being in profit also allows us to develop our marketing with advertising and of course attendance at events such as the Autosport International Exhibition. One of the biggest developments for the company last year was the return to private ownership. Having removed the obligation to the shareholders that put the company in a position where it could increase its flexibility and invest in research and development. At present we are in a transitional period but the move will have positive consequences in the future. This will be seen in the investment in new lines this year with a new winter tyre arriving later in 2004. One question that arises about Vredestein is its ability to stand alone. Other smaller manufacturers are working together with off-take agreements to fill capacity, or enable ranges to be extended. There is a deal of technology exchange and shared product development. As an independent, manufacturer can Vredestein continue to develop its own products as a stand alone business? Vredestein is very much a self contained operation and I dont think that we would envisage such close co-operation with competitors. Our own R&D facility swallows a considerable element of the finance budget but we need to develop products that the market appreciates and wants. We produce niche products that appeal to specialised markets – Sportrac and Ultrac are the only designer tyres in the world and our cooperation with Giugiaro Design is proving to be very successful, for instance. We do not need vast volumes because we are selling premium quality products where we can maintain good prices for everyone in the chain. We do not deal with OE in passenger car tyres, so we can survive on our limited capacity. Our OE market is strictly agricultural and again, we offer a premium brand tyre to a specialised market, says Bert Stellinga. We are determined to go it alone and I cant see any reason why we shouldnt.
Continue ReadingHigh Performance Tyres: the great white hope …
The global tyre market may be dominated by a handful of large players, with a number of second row players, followed by the rest of the world. The gap between the primary three and the fourth and fifth place manufacturers is considerable, and between the fourth and fifth and the rest of the market there is a considerable gap. However, the impact of the rest of the world on the market conditions enjoyed by the top five players is quite considerable. Tyre quality used to be such that there was a clear and distinct difference between the market leading brands of Michelin, Bridgestone, Goodyear, Pirelli and Continental, (and we must include Cooper here) and those of any of the other manufacturers. The reality though has been changing and increasingly brands from smaller manufacturers such as Toyo, Yokohama, Hankook, Kumho and latterly Federal have been increasing their market share by improving the quality of their products and building their brand image – often in the high performance sector. Today, the market dominance of the key players is under pressure. Profitability is being eroded across tyre ranges by the increasing availability of low cost budget tyre brands. The commodity tyre requires no brand loyalty and sells on price alone. Thus, the high volume market necessarily targeted by the budget tyre manufacturers has largely become their domain. It has in essence been abandoned by the big brands. Yes, if you need a 155/13 from Michelin, or Goodyear you can still get it, but increasingly that tyre is being manufactured in a low labour cost centre in a joint venture with another tyre manufacturer who is also feeding his own budget tyres into the same market at a fraction of the price of the main brand names. If a big player is using a JV, or an offtake agreement in the Far East to fill commodity demands, he has surely all but abandoned that market. Indeed, if there is so little margin left in commodity tyres, if it were not for market shares, corporate egos, overall economies of scale and public relations where is the logic in continuing to offer branded commodity tyres? The great white hope for the leading players, who have lost margins to the budget brands, is to develop a technologically advanced premium sector where quality and premium branding help create an exclusive market offering higher margins to the manufacturer, the wholesaler and the retailer. The high performance market offers just such an opportunity and the leading manufacturers are concentrating their efforts on the UHP sector in spades. Every new tyre launch is about UHP. Summer tyres, SUV tyres, winter tyres, all have an emphasis on the UHP market. Repeatedly the message is that the sector is growing in Western Europe and that it is destined to expand rapidly when Central and Eastern Europe follows the Western trend. However, it is not just a trend in Europe; it also follows in the USA – though perhaps surprisingly performance tyres account for only 13 per cent of the US market, whilst they amount to some 54 per cent of the European market according to Michelin; in Russia as an emerging market and in the Indian sub-continent - long ignored by the main brands as too poor an economy or too competitive a market. Here too the main brands are setting up camp and preparing to take market share from the domestic producers with high performance tyres. Pirelli being one of the first to see the potential and react with an improved sales operation.
Continue ReadingHi-Q: preparing to take its rightful place
The UK fast fit sector has long had an enigmatic player in the shape of Hi-Q. Even without the coming together of Motorway and Hi-Q the brand was substantial and widespread across the UK thanks to a blend of equity and partnership units. However, unlike its rivals, Hi-Q suffered from a raft of management, branding and performance problems. Even the relatively small Central Tyre operation could offer a standardised branding and a certain level of uniformity of image and service across its domain. Hi-Q was, by comparison, a sleeping giant. It was an operation that needed organisation, it needed a good shakedown and sort out. It needed someone capable and prepared to turn it on its head, shake out all the loose change from its pockets and put it back on its feet. That was a view taken, not only by spectators but by people higher up the feeding chain in the parent Goodyear organisation. As Goodyear and Dunlop were brought together, so too were all the group operations and this led to, in Hi-Q/Motorway, a complicated and divisive structure where there were dual brands, in both truck and car, there were multiple sales teams and, to quote Graham Scholefield, the man brought in to head up the revitalised Hi-Q, The main task was to create cohesion in the business, give everyone a sense of direction; and improve communication and motivation. Graham Scholefield has a considerable length of experience in corporate retailing, initially with House of Fraser and then with Kwik-Fit, holding powerful positions in both organisations. When CVC bought Kwik-Fit Scholefield was looking at finding another outlet for his retailing skills. When the option of taking on Hi-Q came up, he realised that the task offered him a real challenge, not only that but turning Hi-Q from the sleeping giant it was into the powerful retail operation it should be, would be realising untold potential. I could see the potential of Hi-Q, says Scholefield, here was a massive asset under-utilised, under-performing, but with all the elements of a first class retail operation. I could see this was a business I could feel passionate about and that I could really use my retailing skills to develop its full potential. The coming together of Goodyear and Dunlop had created a great deal of uncertainty. The business was fragmented by old loyalties and structures. For a considerable time people didnt know what was happening, where the future lay, and there was talk of the Equity being sold off. The perceived wisdom now is that tyre manufacturers should manufacture tyres. There was a period when they tried to control the whole chain through to the end user, but despite the obvious advantages the Equities were often usually the agents of the tyre manufacturer and sold what the manufacturer told them to sell. These were issues that had to be addressed. The difficulty of the disjointed management was one met by restructuring the business, but this could only be done once there was a commitment to the retail operation. Fortunately the new Goodyear Dunlop management could see merit in the retail operation and the decision to divest was reversed. We knew that there was confusion about who Motorway and Hi-Q were and what they each did. We needed to clear the clutter and create a cohesive approach. It was clear though that what was needed was a single organisation. The choice was made to re-brand the whole retail operation as Hi-Q, as that was the stronger of the two brands and the brand used for our strategic partner network. That re-signing and re-branding operation was completed by December 2003.
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