‘More Muscle, Less Fat’

Continental has unveiled its new HTR2 “second generation” trailer tyre at the Commercial Vehicle Show in Birmingham. With 20 per cent more rubber in the tread area and new steel belt and bead designs, Continental claims the HTR2 offers the best rolling resistance in the segment and better retreadability than ever before. The HTR2 will be available immediately, initially in 385/65 R22.5. The rollout will then start with 22.5 and 19.5 sizes, with a wider selection following in the months and years to come.

Tyres & Accessories met with Continental Commercial Vehicle Tires executives Dr Michael Korpiun, marketing director; Bernd Kort, director product development and industrialisation; and Geert Roik, senior vice president research and development and asked what the strategy behind the product overhaul is?

In Dr Michael Korpiun’s words, the thinking behind the new tyre is “more muscle, less fat.” Throughout the discussion it was clear that the launch of the HTR2 is just the beginning of much larger and more far reaching refreshing of the company’s truck tyre portfolio. In other words, the launch of the HTR2 is the first part of a two-year programme that will see the manufacturer replace 60 per cent of its truck range in the next two years.

Increased carcass rigidity, better air retention (both in order to improve rolling resistance) and additional mileage appear to be the key characteristics that will be reflected throughout the new range. However, in addition to improved rolling resistance, mileage and retreadability, the increased rigidity in the new tyre line also reflects the company’s intention to market the tyres in “non-standard markets.”

According to the Continental executives T&A spoke to, the new tyres will be produced “as close as possible to the customer.” To be clear, for UK and European customers this means the tyres they are supplied will be produced in “Europe”

Moving on to a more OE perspective T&A asked if, in light of the news that certain Chinese manufacturers are integrating RFID chips into tyre production (see this month’s International Tyre Market Section for more on this), Continental and the other European premium manufacturers are likely to follow suit.

“RFID is a very old question,” Geert Roik answered, explaining that certain OEMs were enquiring into this technology four or five years ago. Apparently, in the west at least, the problem has always been finding an OEM willing to pay for the additional components. In the Far East where the cost base is lower and the quality is so much more variable, they have an added incentive to utilise this technology, Roik continued. According to the Commercial Vehicle Tires vice-president of research and development (whose role also covers OE), Continental’s position is clear – “if someone is willing to pay for RFID, we can immediately deliver this.”

New tyre ‘lowest rolling resistance in class’

Continental puts the increased performance offered by the HTR2 down to three new technologies incorporated in the trailer tyre’s design – the tread, the bead/belt construction, and the inner liner.

First, the new stabilizer belt, based on a triangular geometry, stiffens the structure of the HTR2 to minimize the rolling resistance and improve the durability of the carcass. The steel-reinforced bead construction better withstands raw forces acting on the trailer better and ensure secure seating of the tyre on the rim – which itself helps to maintain good rolling resistance.

The HTR2’s tread contains 20 per cent more rubber, resulting in an effective tread depth 17 millimetres. The tyre’s larger contact patch is designed to aid even wear, resulting in the high mileage performance.

The HTR2’s patented “Air-Keep” inner liner deserves particular attention at this point. According to the company, an “Air-Keep” inner liner holds tyre pressure at an optimum level for up to 50 per cent longer than standard materials. Fitting the new liner has a beneficial secondary effect too: as less air is able to escape through the tyre, less tyre oxidation occurs, making the tyre significantly less sensitive to the aging process.

Continental truck tyres have a particularly reputation for being low weight products, so with extra rubber and extra steel belting, an even more stringent focus was placed on the new tyre’s weight. The result is that the HDR2 is only 5-6 kilograms heavier than its predecessor, a negative feature company representatives say is cancelled out by the products other strengths such as increased strength, durability and improved rolling resistance performance. On this note Bernd Korte, director of product development and industrialisation, pointed out that the tyre was already lighter than the rest before the ‘second generation’ construction upgrades. Nevertheless, the HDR2 is said to remain amongst the lightest products of its kind.

Finally, at the end of its life, the enhanced construction reportedly increases the tyre’s retreadability, effectively lowering its total costs.

Sale of CV division ‘still an option’

In spite of all the good news – increased sales and market share/new products – coming from Continental, this is all set against a somewhat more cautionary backdrop. A comment made by the Continental AG CFO during the company’s recent corporate conference call indicates the German manufacturer still considers the sale of its truck tyre division as an option for the future. According to Forbes report, Dr. Alan Hippe said: “Should the division be unable to reach the targeted margin, we will have to consider a divestment.” However Dr. Hippe added he doesn’t foresee such a transaction occurring in the short-term.

Conti results released on 29 April state that the Commercial Tire division attained sales of 328.4 million euros during the first quarter of 2008, a decrease of 4.7 per cent on the previous year. Upon releasing the quarter’s figures Executive Board chairman Manfred Wennemer commented, “In the Commercial Tires division, we implemented measures to again significantly improve the margin.” However the unit’s adjusted EBIT margin was 3.8 per cent for the quarter, well below Continental’s adjusted EBIT margin target of 10 per cent for all divisions by 2010.

The previous week Mr. Wennemer also made comments to the effect that the division’s position within Continental was under scrutiny. “We’ve been looking at that division for some years now, and as before, I don’t want to rule out we’re selling off the division,” he said.