Following its decision in March to suspend all manufacturing activities in Russia, Bridgestone has officially initiated the process of finding a local buyer for its Russian assets. The process of finding a buyer and closing any subsequent deal is expected to take “several months”.
Nokian Tyres plc has agreed to sell its Russian operations to Tatneft PJSC for approximately 400 million euros. The precise final purchase price will be affected by factors including net cash, working capital adjustment and foreign exchange rates. Confirming the news, Tatneft issued a one-paragraph statement saying the deal includes the plant in the city of Vsevolozhsk, in the region of Leningrad and that “the closing of the transaction and the purchase of assets is subject to a number of conditions, including obtaining approvals in accordance with Russian law.”
Since March, cumulative passenger car and light truck tyre imports to the European Union and UK have, for the first time, recovered to run above pre-pandemic levels. This is despite the well-documented impact of sharply higher ocean freight costs in this period, and disruption to production in some source countries. A newly published report by Astutus Research, “European PCLT Tire Demand and Supply Forecasts to 2026”, shows that in the first seven months of 2022, European (the EU-27 plus UK)* imports from outside the region were 11% higher than the same period last year and 5% higher than the equivalent pre-Covid period in 2019.
In light of strongly rising energy prices in Europe, chemical firm and synthetic rubber manufacturer Synthos has announced that it can no longer produce Emulsion-SBR (ESBR) at full capacity. It will thus reduce ESBR output by approximately 30%, equivalent to around 100,000 MTPA, effective immediately.
After an April to June period punctuated by negative EBIT and a net loss, tyre maker and automotive components supplier Continental says it is “looking ahead to the second half of the year with optimism.” It is also maintaining its full-year outlook despite a current headwind that chief financial officer Katja Dürrfeld describes as being “rather like a hurricane.”
In a market hit by the systemic impacts of the conflict in Ukraine and the health crisis, the Michelin Group reports that its net income fell by 18.3 per cent despite a year-on-year increase in sales. The tyre maker nevertheless considers this a good result “in an extremely unsettled environment.”
UK car production in grew in May 2022 for the first time since June 2021. The Society of Motor Manufacturers and Traders (SMMT) report that a total of 62,284 units left factory gates during the month, a rise of 13.3 per cent. SMMT notes, however, that the increase must be viewed in context against May 2021, which was still suffering significantly from pandemic-related headwinds. Output remains 46.3 per cent below the pre-pandemic month in 2019, with ongoing supply chain issues, increasing economic uncertainty, rising business costs and disruption caused by the war in Ukraine.
Due to the war in Ukraine and subsequent, tightening sanctions, Nokian Tyres plc has determined that it is “no longer feasible nor sustainable” to continue operations in Russia. The Finnish tyre maker’s Board of Directors thus decided today to initiate a controlled exit from this market. Exit preparations start immediately and Nokian Tyres will evaluate different options for its departure, with “due consideration to local employees and legislation.”
After suspending its manufacturing activities in Russia on 15 March, Michelin now confirms that it is “technically impossible to resume production,” due in particular to supply issues, amid a context of general uncertainty. It says Michelin Group is “therefore compelled” to plan the transfer of all of its Russian operations by the end of 2022.
When the going gets tough, diversify. This strategy helped storage systems specialist Arcom weather the storms of the past two years. The Polish company is once again enjoying strong demand, both within the tyre industry and beyond. We caught up with sales manager Marcin Smulski during The Tire Cologne to find out more.
Although the war in Ukraine and subsequent sanctions continue to “cause significant uncertainty” for Nokian Tyres’ operating environment, especially in regards to its business in Russia, on Friday the company reported that demand for its tyres has nonetheless remained good. For this reason, and after successfully implementing price increases to mitigate the impact of inflation, Nokian Tyres has raised its net sales guidance for 2022.
Pirelli & C. Spa has reported a strong set of first quarter 2022 results which show revenues and pre-tax profits (adjusted EBIT) were up 22.2 per cent and 35.4 per cent respectively despite considerable turmoil related to the war in Ukraine and the resultant sanctions against Russia, where Pirelli runs two tyre factories. However, the tyre manufacturer has also revised down full-year estimates due to the same “geopolitical tensions”.
Announcing its financial results for the first quarter of 2022, tyre maker and automotive technology firm Continental states that it “performed well” during the period despite “an increasingly turbulent market environment.” It describes its Q1 2022 tyre business as “strong.”
Although Russian tyre maker Voltyre-Prom recently spoke of potential opportunities arising from the war in Ukraine and related international implications, majority shareholder Titan International confirms it will not be investing in this business any time soon. Details of Titan’s relationship with the Russian operation were set out in the US-based firm’s 10-Q financial report for Q1 2022 and further commented on during a teleconference held on 3 May.
Results of a survey conducted on behalf of Kwik Fit suggest 69 per cent of motorists have changed their driving behaviour since the beginning of the year. Altered habits include cutting down on ‘non-essential’ car journeys, something 35 per cent of the 2,000 respondents admitted to doing. Drivers of petrol or diesel cars are almost twice as likely to cut down on such trips, with 40 per cent doing so as opposed to 22 per cent of electric vehicle (EV) drivers.
Bridgestone
Tatneft
Astutus Research
Pirelli