Goodyear: Dunlop investment continues, Fulda brand to remain in post-factory scenario

Goodyear may have announced plans to close its Fulda and Fürstenwalde car tyre factories in Germany, but the tyre maker has confirmed that the Fulda brand will continue. Similarly, just a day after Goodyear announced that it is “pursuing strategic options” in relation to the sale of the Dunlop tyre brand as well as the company’s OTR tyres and Chemical businesses, Goodyear EMEA executives have reaffirmed their support for the Dunlop brand.

When we spoke with senior Goodyear EMEA executives a month ago, they set out plans to differentiate Goodyear and Dunlop by setting range and price space between the marques that were formerly positioned as joint flag brands. Meanwhile, further into the Goodyear group brand basket, the EMEA executives explained that well-known brands such as Avon and Cooper would continue to receive investment as “local hero brands”.

Roughly a month later, plans for the sale of the Dunlop moniker/intellectual property and the closure of the Fulda factory have been announced. So, what does that mean for Goodyear’s EMEA 2024 branding strategy? Business as usual, comes the clear answer.  That means the Fulda brand is staying and investment in the Dunlop brand will continue.

“It is important to emphasize that this announcement does not impact the Fulda brand which we intend to keep as a valued part of our multi-brand product portfolio. Fulda tyres are manufactured across various facilities in EMEA, and we aim to continue their availability to customers in Germany and other markets”, Goodyear EMEA executives said in their Fulda factory closure statement.

Investment in Dunlop continues

Meanwhile, Goodyear EMEA executives confirmed that “investment in Dunlop continues” and that there will be no change in the 2024 brand plan in relation that was shared in October. And there are good reasons for that approach. Not to put too finer point on it, it doesn’t make sense to do anything else. “If we sell Dunlop”, a spokesperson told Tyres & Accessories – highlighting that Goodyear has not committed to sell Dunlop but is rather considering its strategic options in relation to such a sale – it would firstly have to be the right move at the right price for the ongoing success of Goodyear as a company. In that scenario, maintaining investment will no-doubt help achieve the best price. In the hypothetical event it doesn’t sell, brand marketing plans would be in the best position to continue. It remains to be seen quite how investment will be maintained if Goodyear CFO Christina Zammaro’s suggestions that the sale process will turn out to be a six-to-nine month project are correct.

On the subject of price, there was some pushback of suggestions that Goodyear has “valued” Dunlop at around $0.7 billion. Rather, say Goodyear representatives, that figure reflects a year’s turnover value associated with the brand (and mostly generated in EMEA). Instead, according to Goodyear, Dunlop’s value is “much higher” than $0.7 billion and could even be described as a “multiple” of that figure. However you frame the wording, there is no doubt that slide nine of the Goodyear Forward investor’s call presentation clearly sets out the stall for the sale of Dunlop plus the Goodyear OTR tyres and Chemicals business in a bid to generate “accretive gross proceeds in excess of $2 billion”, using annual turnover of the respective parts to generate contextual figures for negotiations with interested parties.

Implications of a Dunlop sale

There is also no denying that Dunlop remains a significant part of the overall business, not least in EMEA. Goodyear currently sells 7 million Dunlop-branded tyres a year in total. 5 million of those sales are generated in EMEA. The vast majority of that figure relates to passenger car tyres, but around 500,000 are truck tyres.

Questions also remain as to what the sale of the Dunlop brand will mean in the Asia Pacific market (specifically in Australia and New Zealand) where National Tyre & Wheel Limited recently became the exclusive distributor of the Dunlop tyre brand. That move saw Goodyear restructure its distribution model around a third-party partner. However, news sources down under have been reporting that such restructuring might become irrelevant if Goodyear sells of the Dunlop tyre brand.

National Tyre and Wheel issued an Australian stock market stating that the company “is seeking clarification from Goodyear and [its] advisors about the implications, if any, a sale of the ownership of relevant intellectual property would have on the Agreements and the opportunities such a sale may present for NTD”, adding:

“As Goodyear is in the early stages of its strategic review, further clarity about possible implications…is not expected until 3Q24”,

And: “The distribution of Dunlop brand tyres…in New Zealand commenced on 1 November 2023. Preparatory work for the commencement of [National’s] distribution of Dunlop brand tyres in Australia from March/April 2024 is continuing.”