What do tyres, websites and a new cover design have in common? It is all a question of quality. In the British tyre industry everyone talks about price versus quality. Almost as often the debate broadens out before settling in the amorphous arena of “value”. More often than not this means the narrowing of the gap between two perceived opposites. In practice it could mean a customer buying a high quality product for a lower than expected price.The classic example of this is the customer that buys a higher priced product that performs beyond either their expectations or what the competition has to offer. In either case both propositions are predicated on the basis of product quality. Without this there are only short term pricing and sales strategies. And this in turn leads to the key difference highlighted by the age-old business adage: “sales are vanity, profits are sanity”. Without a properly considered quality-focused market approach, businesses struggle to make sense in the long-term, whether the macro-economic environment provides wind in your sails or an adverse gale.
It has been quite a month for the forecasters. Not the weather forecasters mind you – although the winter weather that has sprinkled the UK and parts of Europe with a fresh dusting of snow will no doubt have kept them busy too – but rather the market forecasters. With ETRMA reporting that tyre unit sales fell off a cliff last year, Conti saying the market is likely to bottom out in 2013 and with other analysts predicting 2013 will be a good year for tyre retailers, what is on the horizon for the next 12 months?
A few years ago people were asking if this fuel-saving thing is ever going to catch on. Now virtually every manufacturer has a fuel-saving line and a fuel-economy strategy – we even have mandatory product labels comparing products on the basis of this characteristic.
While some say the Mayan’s predicted the apocalypse would take place this year, the good news is that Armageddon doesn’t appear to have taken place either literally or figuratively. Instead, as we look back on 2012 it is probably fair to say that the year has been dominated by labelling, tough tyre retail sell-out conditions and a resurgence in car sales and production…in the UK at least. Some might gloomily reflect on the fact that our economy as a whole encountered a double dip recession, but there are also signs that the bad times are slowing and in fact things may even pick up a bit in the year to come. (All these themes are followed up in this month’s Review of 2012 feature, which begins on page 40 in our forthcoming December issue)
Now the dust has settled from the first suggestions that Apollo Tyres was preparing to bid for Cooper Tire, the rumour mill has slowed considerably. There are those that are saying there is no smoke without fire when it comes to the reports published in the Indian and then global press; and there are those that believe it was all a carefully orchestrated publicity manoeuvre. Whatever the truth turns out to be, the interest surrounding this story is a reflection of the facts that the global market is ripe for consolidation and that there are a lot of ambitious tyre companies in and around the top 20 aiming to make it into the top 10.
With tyre labelling virtually upon us and with TPMS kicking in at the same time (see the forthcoming October magazine's Company News section for more coverage on this), the market needs to know where it stands with regards to enforcement…as soon as possible. We know the Department for Transport has got the whole West coast rail franchise fiasco fallout to deal with, but without proper attention the strength of the imminent labelling legislation could be seriously undermined. Indeed many questions are already being raised. This point is emphasised by a photo currently doing the rounds on the Internet. It is small and of mediocre quality, but what is clear about the image is that it portrays two Chinese-produced tyres of the same size model, speed and load rating on top of each other in a warehouse. A common sight you might think until you realise that the two apparently identical products bear two different European labelling results. The first BB-71 and the second CC-71.
Following last month’s “Panorama” which covered issues relating to illegal tyre dumping, you could be forgiven for thinking this column has gone a bit “Radio Times.” It hasn’t, but it seems tyres are getting far more than their 15 minutes of fame this summer. While last month’s piece looked at the pros and cons of the BBC’s, shall we say, variable TV coverage (which leapt from theme to theme apparently without fully thinking through the lack of linkage between them), this time it was the turn of radio.
It is not often that a tyre journalist gets to take a turn at being TV critic, but July’s Panorama documentary focusing on tyre dumping was one such opportunity. This month’s Tyres & Accessories gives the 30 minute documentary the full treatment in the UK section of the forthcoming August magazine, however the issues raised are worth discussing in more detail.
As this issue of Tyres & Accessories goes to press, most of the team are en route to Essen for what has become the world’s largest tyre exhibition (look out for full coverage in our July issue and online at Tyrepress.com). Now that restrictions related to tyre labelling have been lifted, it is likely that this is the subject that everyone will be talking about. The leading manufacturers have already started positioning their companies in relation to one another and we can only imagine how they will position their respective pre- and post-labelling products compared with the rest of their group brands. Again this is something we are keeping a close eye on here at T&A.
After two successive cold winters (2009 and 2010) a lot was hanging on a frosty conclusion to 2011. While only five years ago winter tyre sales barely registered at less than 1 per cent UK market share, by the end of the opening months of 2011 various sources were reporting that the market had swollen to around 450,000 units, doubling and even tripling some wholesalers’ stock forecasts.
As of the 1 January 2012, the MOT test we all know and love will change. No I am not talking about the government consultation exercise mooting a possible change to 4-2-2 frequencies, that would be opening another can of worms entirely. What I am referring to is the technological evolution of the test that will see our belovedly idiosyncratic MOT stretch itself to incorporate an MIL survey. That’s a Malfunction Indicator Lamp check to you and me.
As I write David Cameron has just vetoed Angela Merkel and Nicholas Sarkosy’s proposal for closer fiscal integration between European states. A day earlier Standard and Poor’s put the best part of Europe on credit watch, threatening to downgrade national credit ratings if nothing substantial happened to shore up the collective accounts. The day after the 10-hour long European fiscal integration talks concluded with all but three countries (UK, Sweden and Hungary) signing up to the treaty within a treaty, far from stabilising things, increased Italian bond rates actually made its governmental borrowing more expensive.
Reading the recent UK winter tyre usage survey commissioned by Manheim Auctions, anyone would think that the concept of fitting winter tyres was a) peculiar and b) a “minority purchase.” The reality is that all across Europe millions of winter tyres are fitted every season and that the numbers of motorist taking the winter option are at an all-time high and growing fast.
…or are we about to witness a real dip in tyre markets? While the massive drops in OE demand of a few years ago appear to have turned a corner, and while tyre manufacturers the world over are steadily ramping up production to pre-recession levels, some are questioning whether or not replacement markets have really felt the full force of the recession. Could 2011 be shaping up to be worse than 2008/2009?
After an eight-year long mutually beneficial relationship Maxxis International UK Ltd has decided to part company with its long-term distribution partner Grouptyre. The news came in the form of an announcement that the two companies have ended their exclusivity agreement, which implies that the firm will continue supplying Maxxis tyres for the time being. However, Tyres & Accessories understands that there is more to the story than that.