It’s all about competitiveness, says the ETRMA
In its 2010-2011 annual report, the European Tyre & Rubber Manufacturers’ Association reports on what it calls the “dominant sentiment amongst industry leaders” – enhancing, or at the very least maintaining, the competitiveness of its member companies. Elaborating on the situation behind this sentiment, ETRMA secretary general Fazilet Cinaralp comments that “Europe is the most highly regulated area for tyre production and marketing but our global competitors are well aware that there is no market surveillance to enforce our strict rules. This undermines equality in regulatory enforcement and at worst leads to a competitive disadvantage for European producers.”
The association’s 12 tyre manufacturer members – Apollo Vredestein, Bridgestone, Continental, Cooper Tire, Goodyear Dunlop, Hankook, Marangoni, Michelin, Mitas, Nokian Tyres, Pirelli and Trelleborg – produce tyres under a legislative climate that Cinaralp describes as “definitely more stringent than on other continents” in certain areas. She observes that the complexity of EU legislation is increasing, particularly in regard to environmental issues, to an extent not seen outside of the region. “Every act of legislation has an impact on industry competitiveness,” the secretary general states. “The need to undertake a thorough competitiveness assessment before any regulatory initiative is launched is a fair and necessary condition – but we do not have it yet.”
Yet the ETRMA believes its members competitive disadvantage is two-pronged: Cinaralp points out that, in addition to the presence of increasingly demanding legislation, Europe remains one of the world’s most open markets – in contrast to “some of our global competitors in the emerging markets [that] still have high tariff barriers and increasingly resort to several kinds of nontariff barriers in order to hamper our access to their markets.”
Cinaralp states that “proper market surveillance” is lacking within the European Union, and to counter this the ETRMA is undertaking its own surveillance measures. “In its October 2010 meeting, the ETRMA Board of Directors named proper market surveillance as one focus area for the coming years,” the secretary general expounds. “As a first contribution to this objective, ETRMA launched a PAH-rich oil testing campaign, which has shown that a significant share of imported tyres do not necessarily abide by EU rules. It is not possible to tell by looking at a tyre if it conforms to the regulations so consumers are unwittingly buying illegal products on EU markets.” The results of these tests, which Tyres & Accessories reported in March, showed that 12 of the 110 tyres tested – all of which were manufactured outside of the EU – failed to comply with applicable legislation.
As Cinaralp shares, competitiveness hinges on a number of factors; in addition to those already mentioned, the ETRMA views fair and sustainable access to raw materials, a good skills base and sufficient investment on research & development as key to remaining competitive. “It is about a solid financial base, security of investments, intellectual property rights and a level playing field,” she continued. “Recovering from the crisis in the EU while catching up with the unchecked growth in the emerging markets [during] 2010 put a lot of strain on the European tyre and rubber industry. ETRMA in Brussels continues to deploy the necessary steps to put forward the industry points of view, anticipating and assisting the EU institutions in their sophisticated regulatory steps.”
Replacement market almost at pre-recession levels
Using data supplied by ETRMA member companies and organisations within the EU27 region and Turkey, the association reports that a total of 333.6 million tyres were sold in the European replacement market last year, a 29 per cent year-on-year increase and just 0.6 per cent less than during pre-recession year 2007. From this total, passenger car and light commercial vehicle tyres accounted for 317 million units (up 27 per cent since 2009 and one per cent higher than in 2007) and the remaining 16.6 million (a 66 per cent increase on 2009 yet still 21 per cent down on 2007) were medium and heavy commercial vehicle tyres.
During the year a total of 4.5 million tonnes of tyres were produced within the region (an increase of 25 per cent on 2009 and 11.7 per cent less than in 2007); the ETRMA notes that this production represents 26.5 % of global tyre production, which is estimated to be 17 million tonnes. Furthermore, the association’s statistics show ETRMA members to have been the biggest winners in 2010: While total industry turnover for the region increased 6.9 per cent year-on-year to 46 billion euros (6.1 per cent less than in 2007), ETRMA member turnover grew 21.7 per cent year-on-year to 28 billion euros (7.7 per cent higher than in 2007).
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