Nokian Tyres exits Chinese market
The official Chinese website of Nokian Tyres states that the Finnish tyre manufacturer is withdrawing from business in the Chinese market due to its “limited production capacity”.
The official Chinese website of Nokian Tyres states that the Finnish tyre manufacturer is withdrawing from business in the Chinese market due to its “limited production capacity”.
On 18 January, Sailun Group announced an 833-million-yuan (£99.63 million) investment to upgrade OTR tyre production at its plant in Qingdao, China. The upgrade will allow Sailun to produce OTR tyres in sizes up to and including 49-inch. The tyre maker intends to complete this upgrade and adjust its production portfolio within a period of ten months.
Recently, Guizhou Tyre (also known as Advance Tyre) disclosed utilising production capacity. In 2022, China has implemented relatively strict control measures against the epidemic, and the logistics are not smooth, which indirectly leads to weak demand for truck and bus tyres. Affected by the above factors, Guizhou Tyre’s domestic plant has a capacity utilisation rate of around 80 per cent for all-steel radial tyres. Over the same period, capacity utilisation for OTR tyres was about 95 per cent.
Passenger car and light truck (PCLT) tyre production trends in Western Europe have been scaling down over the long-term. The move to larger production facilities in the comparatively low-cost labour markets in Eastern Europe, or greater reliance on imports from Asia, has seen a steady stream of plant closures and conversions to speciality, short-run production capacity – on in the case of Cooper Tire’s UK plant, for example, one followed by the other – in the region. A new assessment of the most recent three-year period by tyre industry analyst Astutus Research suggests that the overall picture has been of a decline similar to the period following the 2008 financial crisis, which was itself a catalyst for this trend. Yet digging a little deeper into the figures shows several dynamics at play in European PCLT tyre production, including supply chain disruption and spiralling energy costs. For comprehensive analysis of global tyre market trends, a series of reports by Astutus Research are available to buy now in the Tyrepress Reports Shop – click here for more details.
According to local media sources, both Bridgestone and Maxxis plan to ramp up their activities in India. Maxxis Group intends to invest a further US$100 million over the next five years to capture a 15 per cent stake in the two-wheeler tyre market, while Bridgestone Corporation is looking to increase its production capacity for car tyres by ten per cent next year to meet rising demand from both OEM and aftermarket customers.
Through its local subsidiary Bridgestone Do Brasil Industria e Comercio Ltda, Bridgestone Corporation is once again increasing production capacity at the Bahia passenger car and light truck tyre plant in Brazil. Earlier today, the company said it would invest approximately BRL 270 million (£45.4 million) in this project; when combined with the capacity investment announced in July 2021, total investment in boosting Bahia plant capacity amounts to approximately BRL 970 million (£163.2 million).
Bridgestone Americas will spend US$550 million over the coming two years on the expansion and modernisation of its Warren County truck and bus radial tyre plant in the US state of Tennessee. The project will add 380 jobs to the Warren County workforce and expand the plant’s existing footprint by 850,000 square feet (around 79,000 square metres).
Sumitomo Rubber Industries (SRI) intends to raise production capacities at a number of its facilities around the world, but at the same time will remove some products from its portfolio in order to address rising costs. It will also aim for more “flexible” production allocation in response to changes in the business environment.
With capacity expansion projects now completed and being ramped up, BKT anticipates achieving a total capacity of 360,000 tonnes per annum by the end of March 2023. But further growth is necessary if the company is to keep pace with demand for its off-highway tyres. During a conference call with investors on 5 August, the tyre maker confirmed that plans are already “on the drawing board” for additional expansion beyond the current projects.
Bridgestone Corporation is investing to increase production capacity for motorcycle tyres at its Nasu plant in Japan, its sole motorcycle tyre production facility worldwide. The tyre maker will invest approximately 1.7 billion yen (£10.4 million) to gradually expand output potential from 2026, with capacity rising by approximately 90,000 units.
Construction work to expand the Sumitomo Rubber USA plant in Tonawanda, New York is progressing following the official groundbreaking at the site on 29 March, and in the coming two to three years the tyre maker will invest US$129 million in a project that will boost production capacity by 50 per cent. After erecting a 5,100 square metre plant building this summer, Sumitomo will install new mixing machines, tyre presses and tyre building machines. Plant manager Tim Sprunger says the expanded facility will feature a high level of automation.
Wheel and automotive component manufacturer Iochpe-Maxion is investing R$100 million (£16.7 million) to expand its operations in Cruzeiro, Brazil. Work to increase truck wheel capacity in Cruzeiro will be finished in the first quarter of 2023 and boost annual output capability by 400,000 wheels, and when expansion of the plant’s agricultural wheel production capacity is completed in the third quarter of the same year, the Cruzeiro site will be equipped to produce a further 110,000 of these products annually.
JK Tyre & Industries intends to significantly increase its capacity to produce passenger car tyres. During an earnings call this month, managing director Anshuman Singhania confirmed that the tyre maker’s Board of Directors has approved an Rs 5.3 billion (£54.0 million) expansion of PCR capacity at its Banmore plant. Along with a recently commissioned debottlenecking programme, this will increase PCR capacity there by 35 per cent from its current level of around 9 million tyres per annum.
The war in Ukraine has brought “high uncertainty” to Nokian Tyres’ operational environment and manufacturing capacity, and as a result it is accelerating plans to invest in new production capacity in Europe. To help fund this capacity, the Board of Directors at Nokian tyres has decided to decrease the dividend payable for the 2021 financial year.
Nokian Tyres has explained the decision to retain its manufacturing operation in Russia, a facility that reportedly produced 82 per cent of Nokian’s passenger and light commercial vehicle tyres last year. The Finnish tyre maker states that by continuing to operate the passenger car tyre factory in Vsevolozhsk, Russia it wants to “make sure that the factory is operated and controlled by Nokian Tyres also in the future.”
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