The German car industry will this year, for the fourth time, produce more than five million cars, announced the association of the car industry in Stuttgart. The losers in terms of car sales are expected to be the importers. For the year as a whole. it is estimated that there will be 3.33 million new car registrations in Germany – about 50,000 fewer than the previous year. Exports are expected to reach a new record.
First came the second tyre recall with costs up to 3 bn $-US, secondly the “extended guarantee” due to problems with ignition systems, and thirdly many quality-related recalls of new car models, all of which have cost Ford a lot of its expected profit. Therefore the management has announced early retirement for up to 5000 white collar workers in the US. This is seen as the first step in a major restructuring in North America, where Ford has announced about 13 p.c. fewer new registrations compared with the same time last year, whereas the market in general shows only about 5p.c. fewer registrations of new cars. Analysts from Wall Street have already greeted Ford’s latest decision positively.
Car makers in a lot of markets grieve over significant reductions in new car registrations. One should not forget that, for most suppliers, from whom parts are needed for the production of cars, the consequences are negative also. But not for manufacturers of light alloy wheels: a flood of special car editions and generally growing fitment rates – in comparison with steel wheels – means that the European aluminium wheel manufacturers are selling all that they can produce. New facilities are even having to be built. The aluminium wheel in original equipment changes from a part which raises the value of a car to standard fitment, even for middle class vehicles. In spite of these favourable conditions, the sector is under pressure. The middle-class structured alloy wheel manufacturers cannot resist the downward trend of prices, caused by the car manufacturers. This is especially so because the purchase of this product happens more and more on a global scale. Besides this, the number of possible oe suppliers of cast aluminium wheels is still enormous. A process of consolidation (as in other segments supplying oe) has not happened, until now.
The car fleet servicing market in the UK is a very tough business. The size of this segment become evident looking at new car registrations in the UK last year, 57% of more than two millions were fleet vehicles. In absolute figures the German market surpasses the British, but the proportion of fleet cars is less. The potential is enormous: Industry sources say that the average fleet car needs 1.8 tyres replaced a year, which gives a total market of 9 million tyres in Germany. And it should be remembered that fleet cars are normally newer than the average, travel more miles per year and fitment rates of winter tyres are higher than for private cars. A fleet service provider knows how much he has to pay for tyres per mile. It should be routine to ask whether the fleet has the right cars and the most suitable tyres, but could another model of car be more appropriate to the needs of the fleet because of how it is used? Car fleets need a mobile fitting network wherever the cars are driving. The tyre dealer carrying out the service on behalf of a leasing company must know the state of the tyres, has to ensure that they are at the correct pressure, has to identify the reasons for unbalanced abrasion patterns and has to fit the car with winter tyres before the first snowflakes fall. Whoever wants to participate in the growing market segment of car fleets has to be fully professional – and he has to invest money. For example, an integral component of car leasing or full service fleet management systems is the use of the Internet. All those involved in the package use the Internet as a communication platform and they want to reduce the costs for the fleet parc. Customers are very interested in quality; the package they anticipate is more than “only” good tyres. Car fleet servicing might be an opportunity, but not a cheap one.
The association VDA has calculated that 3.8 million new cars were registered 1999 in Germany; 2% more than in 1998. The association is expecting a decline in registrations for the year 2000 of between 2 and 5%.
Despite a slight fall in new car registrations in France during April, the market so far this year has risen 6% compared to 1999. French manufacturers have done exceptionally well, with Renault sales up 6% and Peugeot up 12%. Not so happy in April were Fiat (down 28%) and Ford (down 25%).
The German Automotive Industry Association (VDA) reports that vehicle registrations in Germany dropped by 10 per cent in March and 8 per cent overall for the first quarter of this year. It is anticipated that the German vehicle market will remain weak for the time being and a decrease in domestic orders by 10 per cent is likely for the whole year. At the same time, exports are expected to rise by 6 per cent
Recently BFGoodrich had chosen Dubai (United Arab Emirates) as the venue for the introduction of the latest 4×4 BFGoodrich tyre. The new tyre is the “All Terrain T/A” for mixed application on and off the road, a new/further development of its predecessor, “Radial All Terrain T/A” which will now be completely replaced by the new model in all sizes, with some more sizes added. This demonstrates the importance BFGoodrich attaches to the “All Terrain” tyres, a regularly updated line, which has sold well for more than 20 years. “The ‚All Terrain T/A‘, along with ‚Mud Terrain T/A‘ and ‚Long Trail T/A‘ are some of our most popular 4×4 models”, explained Matthias Utzinger, Kléber’s off-road product manager. The new “T/A” will be the most generally useful tyre in the product range, conceived for mixed applications, i.e. for light off-road work but also for the road and for drivers keen on sporty driving, without ever losing sight of its use as a “work-horse”. The forecast for Germany is approximately 100,000 new registrations for off-road cars in 1999, meaning more than 750,000 vehicles of that kind on the road in 2000, according to the tyre manufacturer’s market data, with 4×4 tyre replacement sales amounting to about 700,000. Thus the revised/new “All Terrain T/A” may well lead to BFGoodrich getting a larger slice of the cake.