Bridgestone to phase out bias truck tires in North America
As “Modern Tire Dealer” reports, in response to reduced demand Bridgestone is to stop supplying bias medium truck and bus tyres to the United States and Canada by the end of 2006.
Based in Japan, Bridgestone Corporation is the world’s largest tyre and rubber company.
As “Modern Tire Dealer” reports, in response to reduced demand Bridgestone is to stop supplying bias medium truck and bus tyres to the United States and Canada by the end of 2006.
Times have changed dramatically in the North American tyre industry. Nowadays there is no such thing as a one-brand dealer. The seemingly inexorable way to ever more private brands ceased with Firestone’s tyre recall. Now tyres have penetrated more than before into the consciousness of the consumers. One expected a “flight to quality”, which is a little misleading, because the house brands manufactured by large tyre companies do not have quality deficiency. The hoped for trend is directed to brands, toward brand image, and on brand contents. With this we arrive automatically at Michelin. No tyre manufacturer, in economically good as well as bad times, did as much for the structure of its tire brand as Michelin. Michelin was not the inventor of the steel-belted radial tyre, but the French tyre maker marketed it world-wide with a persistence which is worth admiration. There is no alternative to the steel-belted radial tyre. The French did not invent the multi-brand strategy, either. But they filled this operation with content and brought it into the market in such a way that an alternative was impossible. Nevertheless, Michelin puts its stamp on the markets of this world and in particular on the American market in a completely unmistakable form when it comes to multi-brand strategy.
Las Vegas is for Michelin a good and important meeting place, but the events and meetings outside of the fair hold themselves within clearly smaller frameworks than, for example, those of Bridgestone/Firestone. Michelin has attained clear advantages in the last three years in the American market. Was Michelin now the winner, or were Bridgestone (Firestone recall) and Goodyear (continuous large company losses) only the losers? One would underestimate the French if one would attribute their advances only to the weaknesses of the competitors. Anyone who analyses the American market can come to the conclusion, that the French would have asserted themselves in any case, although perhaps not as quickly. Anyhow, in North America they do ride on a wave of success, although this market has not yet recovered completely from the dramatic break-downs of “9/11”.
Earlier this year it was clear that the CTNA (Continental Tires North America, previously General Tire) would again have to report a three-figure million loss. In the meantime it seeped through that this number is closer to 150 million Euro than “only” around 100 million Euro. This frighteningly high loss shows: In the European tyre business the company makes huge earnings and if the American losses have finally come to an end, the tyre section is not just strongest in turn-over (despite the expected next year’s higher growth in the Automotive business unit), but also the yield-strongest. Tyres still have good expectations in the company; among other things this assumption was underpinned by the majority purchase of the tyre business of the Malaysian company Sime Darby Berhad with two tyre factories with an already existing production capacity of four million passenger car, one million small truck as well as 300,000 heavy truck tyres.
Talking to T&A at the SEMA Show in Las Vegas, Manfred Wennemer (55) and Martien de Louw (57), who is responsible for Continental’s passenger car tyre unit as well as CTNA, affirmed that the American tyre business will reach break-even by the end of 2005. Wennemer specifies: “With the CTNA we will reach break-even in the last quarter of 2005 even though naturally we would be pleased, if we could reach it even earlier.”
Continental was not represented at the SEMA show with its own stand, unlike Bridgestone/ Firestone, Cooper, Goodyear, Michelin and Pirelli and other competitors, probably a cost-based decision. All too tragically this might not have been, because more important than meetings in the company’s booths at the show are meetings accompanying the SEMA show in the surrounding luxury hotels of the craziest city of the world. Martien de Louw and his executive team had invited the customers to an evening in the Mandalay Bay hotel, where hundreds of Continental’s “Best Friends” arrived. De Louw used this opportunity to present his complete executive team. Manfred Wennemer, who travelled to Las Vegas, too, was accessible “on the floor” for everyone, without pushing his colleague de Louw into the background. Optimism was noticeable in Las Vegas; but in order to see that the distance remaining to be covered remains rough and stony, requires no clairvoyance.
Bridgestone/Firestone has survived the largest tyre recall in the history of the tyre industry in North America, and yet has switched again into forward gear. Under the guidance of its charismatic boss John Lampe, the company is now working hard on an improvement of the results, so that the record loss extending far beyond a billion dollars for 2001 will soon be forgotten.
Two years ago Lampe succeeded at Las Vegas in bringing around 4,000 tyre dealers on the side of his company and the brands Bridgestone and Firestone. And he has lost none of his persuasive power. At this year’s SEMA Show in Las Vegas Lampe presented to thousands of dealers new Firestone products and advertising campaigns, aimed to affect these Firestone customers emotionally. It became clear that the new rise of the tyre brand Firestone cannot be stopped, not even in North America.
Talking to T&A, Lampe briefly reminded us of the tough times. At the peak of the crisis the company counter-steered with the brand Bridgestone. But then again Lampe doesn’t want to hear, that Bridgestone has been made a cheaper tyre brand as planned: “A more differentiated view is necessary. With a volume line we were cheaper, because we wanted to absorb Firestone decreases, but for example with the Potenza, which represents the top line, we have always held the price and could hold it. Since the Firestone recall we carried out changes, with which we can annually sell eight million additional Bridgestone tyres by now. Today we sell more Bridgestone and Firestone tyres than before.” Before and after! Talking to John Lampe that is to be heard several times. In Lampe’s world this means: before and after the tyre recall. During the last three years a change took place towards the brands Bridgestone, Firestone and Dayton. 65 per cent of all tyres sold carry a Bridgestone or a Firestone signature; today already predominantly that of Bridgestone. And that will continue, because nowadays the OE business is exclusively carried out with Bridgestone tyres and in the longer term this should affect the company’s replacement business. Approximately 40 per cent of all passenger car and 4 x 4 tyres, that are sold in America, went “before” into the OE business. Today there is only about 30 per cent. Lampe: “Three years ago we were in a rather despairing financial situation and had to do something for relaxation. The OE business was profitable at no time. And of course we could not afford to always produce volume to whatever costs, but we have very much paid attention to profitability. Our market share is now lower than “before,” but we have the more profitable dimensions. Also Michelin acted very selectively, and into these gaps pushed some European and Asian manufacturers.”
Because of the continuing market weakness and on-going high losses in North America, Goodyear’s situation in “Bob” Keegan’s 25 months as COO and president and in the 11 months as CEO remains extremely serious and worrying. Unlike competitors such as Michelin, Goodyear could not even increase market share by capitalising on the Firestone disaster.
Even worse: Bridgestone, with Firestone – a tyre brand that many predicted would not survive the crisis – is back on the road and advancing strongly. Cooper, during the third quarter 2003, added around almost ten per cent, while Goodyear could increase sales by only approximately four per cent, while the total market grew by more than six per cent. Also Goodyear’s figures continue to be under pressure, because the sporadic price increases could not compensate for past rises in raw material prices, margins remained lower than expected and the fixed costs “moved in the wrong direction” despite all restructuring measures, says Rod Lache, Analyst at the Deutsche Bank in New York.
Also the sales development in North America is not satisfactory: in 2002 Goodyear sold eight million tyres fewer in the US market compared with the year before, and in 2003 everything points to a further sales reduction of more than two million tyres. This is a clear sign of continuing acceptance problems on the market. Following this it is no surprise that analysts still do not recognise any signs of a turnaround in the recently submitted business figures for the first nine months of this year and that the visible trends give further reasons for concern regarding the future of the company.
Talking to Tyres & Accessories, Bob Keegan was still optimistic. It cannot be denied that fewer tyres than before have been sold. The biggest challenge is to generate growth in the highest market segment. This is the goal of the strategy “How Do We Win” with its seven quintessential points and its personnel policy that has already been explained to analysts in the early summer. Keegan: “I took a few good decisions concerning executive positions in order to be able to realise the necessary changes. My goal was not merely one of only bringing in outsiders. In all areas of the company we have a good mixture of old and newly-hired, high-level personnel. Jon Rich, who has to bear the load of the turnaround, has the same pattern of thinking as me.” Keegan was convinced that he has now brought together the correct executive team. “Managers who led the company into the crisis, are not necessarily the right staff to lead it out again. We needed a change of course, in order to be able to win. I feel very comfortable with the people, who now carry this responsibility along with me.”
Approximately 90,000 visitors were expected to the 37th SEMA exhibition in Las Vegas according to organiser Specialty Equipment Market Association, without exception specialised public. The annual fair, that usually takes place in November, is comparable with the German Automechanika. For the past decade the tyre sector has been a very important part of the Show. All the tyre manufacturers with interest in the American tyre market are present in Las Vegas. Visitors however shouldn’t expect the presentation of groundbreaking new products. On the contrary: Las Vegas is a suitable place, at which business relations between customers and suppliers can be established or deepened. Despite all the economic difficulties the world’s gambling capital, in the desert of Nevada, is booming. And “9/11” seems to have passed this city without trace, a city which still builds one fancy hotel next to another. The Hilton hotel in Las Vegas it is adjacent to the fairground, once the largest hotel in the world with approximately 3,500 rooms, is nowadays less significant. Others have 4,000, 5,000 or even more rooms. Reportedly a hotel with 8,000 rooms is to be built shortly. At present the city waits for the opening of another luxury hotel, which is to dominate not only by size, but also by luxury. The opening is due in two years. To be on the safe side, the planned French name for the hotel was axed, because it is feared that too many patriotic Americans would avoid such a hotel, after the Gauls dared not to take part in the Iraqi war.
The tyre exhibition in Las Vegas is surely still a meeting of trade specialists. One enters the halls, looks to the left and to the right into the vast array of different exhibition booths. Nevertheless, any visitor has toured every booth within a short time. Although tyre manufacturers such as Bridgestone, Goodyear, Michelin, Cooper, Pirelli, Hankook, Kumho, Yokohama and others are present, the important decisions are not taken at the show. The pricipal discussions take place in the hotels. There the life pulsates. There the receptions take place. There, tyre dealers are invited to meet with their suppliers to specify commercial objectives for the coming year. The large tyre manufacturers not only offer product, but also various kinds of marketing and sales promotion programs. It is the tyre manufacturers aim to bring partners into line in order to improve their new tyre business by at least 50 per cent.
Bridgestone Sales (Thailand) is embarking on a new TV advertising campaign, aimed at promoting the Firestone brand to drivers aged 18-25. Drivers in this age group are more likely to switch brands, says Marketing Director Yoshiaki Hiraishi, and Bridgestone aims to increase replacement market share from the current 5-6 per cent to 10 per cent. The move follows the launch of Michelin’s BFGoodrich brand into the Thai market. Hiraishi is confident that any increase in Firestone sales will not be at the expense of the Bridgestone brand, as the new campaign is specifically targeted at younger age groups, rather than motorists in general, where Bridgestone is more popular. The Firestone brand is well known in other sectors in Thailand, especially agricultural tyres, where the claimed market share is around 50 per cent, and pick-up trucks, where the share is 16 per cent.
The Bridgestone Corporation has announced that it has developed single crystal silicon carbide (SCSC) wafers for use in semiconductor devices. SCSC offers advantages over silicon in semiconductor performance,
The future of Oklahoma City’s Dayton Tire plant is threatened by a dispute between two power supply companies.
Bridgestone/Firestone North American Tire, LLC (BFNT) and Bridgestone/Firestone Canada Inc. (BFCA) have jointly announced an “across the board” price increase of up to 5 per cent on the companies’ tyre products sold in the replacement and original equipment markets, including consumer, truck/bus, agricultural and off-the-road channels. This increase will be effective January 1, 2004, and affects Bridgestone, Firestone, Dayton, associate and private brand tyres.
Bridgestone Motorsport has confirmed that it will not supply the Lucky Strike BAR Honda team with tyres for the forthcoming 2004 FIA Formula One World Championship. Bridgestone and BAR have amicably agreed to cease the current supply contract with immediate effect. Commented Director of Bridgestone Motorsport, Hiroshi Yasukawa: “Whilst Bridgestone is naturally disappointed not to continue its working relationship with the BAR formula one team, we wish them the best of luck in their future endeavours.” BAR Team Principal, David Richards, commented: “We would like to thank Bridgestone for the excellent technical partnership we have enjoyed with them over the past five years. We wish them well for the 2004 Championship and beyond.”
Bridgestone/Firestone North American Tire, a division of Japanese tire maker Bridgestone Corp., is ready to return to the negotiating table with the United Steelworkers of America, a spokesman told Dow Jones Newswires on Monday. The company is waiting to hear from the union, which broke off contract talks last week, said spokesman Dan MacDonald. The union represents 6,000 workers at six U.S. tire manufacturing sites in Tennessee, Iowa, Ohio, Arkansas and Indiana. Bridgestone/Firestone operates two non-union factories, and a chain of Firestone retail stores.
Taking the wider view of the picture, trucking is now, for most medium to large operators, an operation that requires a varying degree of international transportation. That exposes drivers to conditions in foreign markets that they are not ideally equipped to handle. European service is notoriously poor, and equally notoriously expensive. All fleet operators agree that any international operations require international breakdown recovery cover. This causes difficulties for all manufacturers, with limited coverage in Europe. Bridgestone have solved this through a pan-European network of independent dealers operating under the Truck Point banner.
Truck Point has some 220 independent commercial tyre specialist outlets in the UK and a total in excess of 1,600 across Europe. The operation covers most of Western Europe and Scandinavia and is now expanding eastward into Poland and Hungary and other states as the demand for the service expands.
Bridgestone Europe has recognised the need to build a strong Truck Point network, and has recognised an urgent requirement to develop brand awareness of Truck Point across Europe. In light of this the company has launched a multi-million pound UK campaign to increase Truck Point awareness in the tyre trade and in the fleet sector. This is supplemented by an advertising campaign across Europe. Roger Moulding Marketing manager for commercial products at Bridgestone UK, told T&A, “We need to tell people what Truck Point is about and the changes we are making to the programme.
The Truck Point awareness campaign comes at a time when the competition in the truck tyre sector is heating up. There are opportunities being created in the UK by the divesting of commercial services by Continental, There are changes afoot at ATS Euromaster and the Goodyear situation, perhaps unfairly, casts a shadow over Hi-Q – though Goodyear is far from being bowed and the trade can expect developments in that area shortly. However, for the independent commercial tyre specialist there is really only one possible route forwards in dealing with the fleet market, and that, in the UK certainly, has to be Truck Point.
Bridgestone/Firestone North American Tire (BFNT), recently launched Winterforce, its latest winter tyre product line. The Winterforce is “stepped, siped and studable” for superior winter driving and is available in 33 sizes. “The new line is an outstanding value at an affordable price,“ said Phil Pacsi, executive director, North American consumer tyre marketing, BFNT. “The Winterforce is designed to deliver a quiet and comfortable ride to your destination – regardless of weather conditions.“ With the latest in high-sipe density, three-dimensional tread patterns, this tyre offers confident snow, wet and ice traction. Winterforce also features a computer-modelled unidirectional tread designed to provide optimum traction accompanied by a quiet, comfortable ride. The line meets Rubber Manufacturers Association (RMA) and Rubber Manufacturers of Canada (CMA) severe snow requirements and is pinned for 12 studs to offer extra grip. An “winter mountain theme“ sidewall design adorns every size of the Winterforce line. The tyres are available in a full range of 33 sizes.
Austrian journalist and ‘fuel economy record man’ Gerhard Plattner succeeded in crossing 20 European countries in a VW Lupo 3L TDI, with a fuel budget of less than 100 Euros. Plattner relied on Bridgestone Ecopia low-rolling-resistance tyres that are fitted as standard on the Lupo. Their fuel-saving capabilities helped him to achieve a record average consumption of a mere 2.78 litres/100 km. The attempt began on 3 November 2003 in Oslo, Norway, and ended 4,683 kilometres and four days later in The Hague, The Netherlands. Running at an average speed of 80.76 km/h, the Austrian managed to complete the trip having spent only 90.94 Euro from the budgeted 100.
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