The UK Motorcycle Tyre Market: Who Does Wins
For many in the UK tyre trade the motorcycle sector is a bit of an enigma. Bikers need tyres, but they also need specialist attention. The car buyer generally will fit whatever the dealer has to offer, surprisingly often without question. The Motorcyclist though is another fish altogether. Not only does the motorcyclist generally talk a great deal more about tyres, he, or she, will know more about them and will be more brand aware than the car driver. That creates some difficulty for the fast fit outlet used to pushing the tyres they want to sell. The case is compounded by the fact that, unlike the auto sector where tyres may be specifically tuned for OE supply, and the aftermarket offered a best option as a replacement tyre across the complete size range; the motorcycle sector retains those finely tuned OE specifications for aftermarket fit (by and large). It is therefore important, for example, that the Honda and the Yamaha, which both use the same size and range of Bridgestone tyre as OE, say, 120/70ZR17 BT 020, are offered the correct suffix code tyre to suit their bike. There are ten variations of this tyre from Bridgestone alone in this particular size. It is important that the sales staff are aware of the effect of fitting the wrong 120/70ZR17 BT 020 tyre to a bike - especially higher performance road bikes. Harmonics can induce shimmy in the steering, or vibration in the frame, or just make the bike noisy and uncomfortable to ride. At Dunlop Steve Male takes the explanation a stage further. Manufacturers specify the bike and tell us what they expect from the tyre. Together we specify a tyre and tune it exactly for the bike as an OE fit. That OE fit is a global option and represents what the manufacturer of the bike believes is the correct global tyre for that bike. We will supply that OE tyre to the manufacturer. However, our own R&D team will design further options, refining the OE specification for different markets. There will possibly still be an exact OE spec. available for the bike, but there may also be a European spec., an Asian spec., and a North American spec., each tuned to the bike and the prevailing conditions.
Continue ReadingWhat Is The Future For Goodyear?
Four years ago: In an interview at the Geneva Autoshow, Goodyear CEO Sam Gibara put forward his views. Goodyear had, according to him, the best people, the best distribution, the most cost-effective plants, the best products and - with its innovative EMT tyres - a three-year lead over its competitors. Within three years, he predicted, 75% of Goodyear tyres produced would be EMT tyres (in 2002, the actual figure was one million tyres). The IMPACT production process (Integrated Manufacturing Precision Assembled Cellular Technology) was held up as a revolutionary advance, guaranteeing predominance over the competition and an example of Goodyears technical leadership.The reality is that there have been no significant profits for years and Goodyear is still in third place. It made a loss of $203 million in 2001 and might not have been able to avoid another loss last year. Goodyear needs a turnaround in its loss-making home market, costs are too high, selling prices are too low and the once-proud corporation is fighting for nothing less than its survival, however unpalatable this might sound to company managers.In the first two years under Gibaras leadership, Goodyear enjoyed very good results, but these have since declined to todays levels and the Mission into the 21st century has been a flop. The group is overloaded with a mountain of debt, has big problems with its underfunded pension fund and the credit rating was reduced to junk bond status.All this means no picnic for Gibaras successor Keegan, who knows that his assignment is a difficult one but who believes that the problems are manageable. What he does not know for sure is whether he will have time enough to make the turnaround happen.
Continue ReadingGoodyear Fires 700 In Akron
Although reductions in staff had been expected, the news item still fell like a bombshell: Goodyear, the tyre manufacturer, is sending more than 700 salaried staff home, 350 of these from the company headquarters in Akron, Ohio, alone. The press releases on the subject refer to a restructuring, holding that the move was necessary to strengthen attempts to accelerate Goodyears turnaround. With this measure, it is said, Goodyear can remain competitive, and CEO Keegan even demands something like a winners attitude from the remaining associates. This may go down well in America, yet to the ears of staff hit by the cuts, who have not been charged with having done anything wrong, it must sound almost cynical. Meanwhile, Thursday January 16th , Akron witnessed moving scenes among staff. For one thing, no one expected such serious staff cuts; and for another, it looked as if someone had simply gone through the ranks with a rake, plucking out staff members who never even dreamed of being dismissed. The entire proceeding bears a certain handwriting and leads one to suspect that top and higher-echelon management made the decisions more or less on their own, and that middle management, presumably was not involved in the matter and now lives in fear of a loss of functionality. In the end, the work to be done has neither gone away nor even lessened. Instead, it must be carried out by the employees still holding their positions.
Continue Reading“Michelin – The BMW Of The Tyre Industry”
Business newspapers in France and England are commenting on a paper from the french analysts Gaetan Toulemonde and Alexis Boyer both from DB Global Equities are recommending Michelin shares as a clear buy. The share price - at about 31 Euros at present - has, according to the analysts, the potential to rise to 50 Euros within 12 months. Michelin is seen by them as the BMW in the tyre industry with strong brands and an excellent brand strategy. It is expected that Michelin will announce in a press conference at the end of February a turnover for 2002 of about 15.7 bn Euro and an operating profit of 1.1 bn Euro. For this year the company is aiming for a turnover of more than 17 bn Euro and an operating profit of more than 1.2 bn Euro. The stock capitalisation at present is 4.6 bn Euro.Michelins strategy has been focused for years on a significantly improved product mix. 5 years ago 60% of all tyres produced were bread and butter tyres, but this proportion has been improved. Today, standard tyres account for about 45% and shortly this will come down to 40%. Under the leadership of Edouard Michelin, in recent years the Group has drafted its profit and loss expectations very precisely and has been able to achieve its goals. It is the declared target of the management to increase the operating profit from the current 7 to 7.5% to 10% from 2005. This is easier said than done and market conditions can change overnight; for example, a possible war with Iraq could lead to much higher oil prices and higher costs for all other raw materials. On the other hand the automotive suppliers are facing in North America extremely fierce competition and the automobile companies General Motors, Ford, and especially Chrysler, are trying to get their suppliers to subsidise them again by forcing them to reduce prices. In this climate it will become very difficult to increase prices, or even to ensure that recent price increases will stick.
Continue ReadingPrivate Brands
The number of tyre brands available continues to grow, due in some part to an increase in private brands. We look at whats available and the benefits - or otherwise - to the manufacturers, the distributors, the retailers and not forgetting the consumer. Will the numbers continue to grow and if so, are we on the way to emulating the United States, where private brands make up half the market?
Continue ReadingStrong Results From Stomil
Polish tyre maker Stomil Olsztyn, a member of the Michelin group, reported a fourfold increase in net profits for 2002. Shares in the company rose by 3.8 per cent to reach their highest level since 1997. This was in contrast to the overall stock market performance, which fell 1.3 per cent. Stomils performance also boosted the share price of Goodyear-owned Debica, which closed up 3.2 per cent at a four-year high.
Continue ReadingCooper Net Income Rises In Fourth Quarter
Cooper Tire & Rubber has reported a 50 per cent rise in net income in the 4th quarter of 2002, compared to the same period in the previous year. Net income was $23 million on a turnover of $842 million (4Q 2001: $16 m/$777 m). For the year, the Tire Group posted a turnover of $1.8 billion ($1.7 bn) with unit sales up 5 per cent and the operating profit rose 88 per cent to $137 million, although the 2001 figure was affected by class action settlement charges totalling $72 million. Excluding these charges, operating profit for the year declined by $8 million or 5 per cent. Sales for the Automotive Division last year rose 7 per cent to $1.6 billion. Thomas A. Dattilo, Cooper chairman, president and CEO, said that the group had achieved its targets for the year and the outlook for 2003 was challenging.
Continue ReadingHayes Lemmerz Reorganisation Plan
Hayes Lemmerz, the wheel manufacturer who filed for bankruptcy protection under Chapter 11 of the US bankruptcy code in December 2001, has reached agreement in principle with the Official Committee of Unsecured Creditors over a plan for reorganisation. The company hopes that the agreement will enable it to make progress and emerge from Chapter 11 within a few months.
Continue ReadingGoodyear Gets Financial Breathing Space
Goodyear has been in talks with its main bank lenders to modify certain loan agreements and covenants. Robert Keegan, president and CEO, said that this action should provide us the financial resources, including access to capital markets, to meet the ongoing needs of our business and drive our turnaround. Under the agreements, Goodyear will have an extended time to make a required $500 million contribution to its pension fund and will have full access to $1.1 billion in two revolving credit facilities.
Continue ReadingBridgestone And MRF Tie In Indian JD Power Test
For the second year running, Bridgestone and MRF Tyres have tied in first place in the JD Power Asia Pacific 2003 India Tire Customer Satisfaction Index Study, which examines customer satisfaction with originally-fitted tyres after 12 to 18 months of ownership. 2,700 owners were quizzed on 15 different attributes. The overall average score improved by 28 points over last year, reflecting the efforts made to enhance customer satisfaction. Top score was 768 (maximum = 1,000) and Bridgestone and MRF were closely followed by JK Tyres (766, just above the industry average of 764). Goodyear scored 751 and CEAT was the lowest, with 730.
Continue ReadingAvon Wins Racing Contract
Avon Tyres have been chosen as the control tyre for the 2003 FIA Sportscar Championship SR2 class. The company has developed both wet and slick tyres for the SR2 cars. Avon Tyres Racing has already supplied tyres to some teams for the past four years and is looking forward to extending its involvement with all teams.
Continue ReadingVW To Recall 850,000 Vehicles
A faulty ignition coil has caused VW to recall 850,000 vehicles, built from 2001 onwards. Those models affected are equipped with 1.8L turbo, V5, V6 and W8 petrol engines. Industry experts estimate the cost of parts and labour to be around 100 Euros per vehicle, or 85 million Euros in total. Over 60 per cent of the affected vehicles are in the USA.
Continue ReadingNo Quarterly Dividend From Goodyear
The Board of Goodyear Tire & Rubber has agreed to eliminate the companys quarterly dividend. President and CEO Robert Keegan described the decision as an important step in a series of actions the company is taking to improve its financial flexibility.
Continue ReadingSixth US Plant For Toyota
Toyota is set to announce plans to build its sixth vehicle assembly plant in North America. The new factory - probably sited at San Antonio, Texas - is expected to cost $800 million and have a production capacity of 150,000 pickup trucks a year. It will begin producing vehicles by 2005.
Continue ReadingRoyal Visit To Pirelli
King Carl VI of Sweden was welcomed to Pirelli by Marco Tronchetti Provera, chairman and chief executive officer, where he visited Pirelli Labs and viewed the MIRS-CCM plant. Carl Gustav XVI was accompanied on his visit by a delegation from the Royal Swedish Academy of Engineering Sciences.The Pirelli Labs span 13,000 square metres in the Milan-Bicocca area and represents one of the most advanced research centres in the world. Projects include research in materials for energy generation and distribution and for new tyre production.The MIRS plant was opened in July 2000 as a pilot project and in three years has become a fully operational system installed in Germany, UK, Italy and the USA. Recently Pirelli added the continuous compound mixing (CCM) process to the facility allowing an unprecedented qualitative control of materials.The visit concluded with a lunch at the Castle Bicocca degli Arcimboldi where Marco Tronchetti Provera presented King Carl VI Gustaf with the first of the PZero Tempo wristwatches, numbered 001. The King presented Marco Tronchetti Provera with a crystal plate to commemorate the visit.
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