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Dunweedin Ltd has given around two tonnes of rubber chippings to Kingsmead Primary School in Northwich, Cheshire. The colourful landscaping chips, made from scrap tyres, have been used to create a recycled garden with decorated flowerbeds and safe playing areas for pupils.
Dunlop Nigeria Plc, has invested an estimated sum of 6.5 billion naira (roughly £27 million) on radialising its plant technology with a view to further boosting the production of tyres for heavy duty vehicles. According to company, the Super Steel Radial Plant will be commissioned by Nigerian President, Olusegun Obasanjo, and will be capable of producing 300,000 heavy duty tyres annually. Furthermore, the expansion is expected to create 200 additional jobs.
While much has been made about the enormous potential of the emerging Chinese tyre market, the opportunities go further than this alone. For every tyre that is produced and used in the People’s Republic there is a potential money-making opportunity for the retreading and collection aspects of the tyre business.
It is not overstating the situation to say there is huge potential for retreading in China. Currently around 265 million tyres are produced in China each year, across all segments. At the same time the domestic market’s 3 million vehicles currently demand 130 million tyres annually, according to a Hong Kong Trade Development Council report.
Ex-Grand Prix star and BBC MotoGP commentator, Steve Parrish, visited Bridgestone UK’s Warwick HQ last week to draw the winner of the second phase of the manufacturer’s 2005 dealer and customer promotional campaign: ‘Grip the Road – Escape to Freedom’
The Yokohama Rubber Co, Ltd is to exhibit at the 61st International Motor Show (IAA) Passenger Cars 2005 in Frankfurt, Germany from September 13 to 25. The company’s exhibit will go under the theme of “Further Evolving Advan - A Global Flagship Brand.” Yokohama says it will show visitors its commitment to becoming a world leader in tyre brand development through three aspects - its flagship product line-up, OE activities and motorsports activities.
Juan Pablo Montoya has won the Italian Grand Prix delaying Fernando Alonso’s attempts to become world champion. The Renault team of Fernando Alonso and Giarcarlo Fisichella took the remaining podium spots. At Monza, all of the top eight points scoring cars were running on Michelin tyres. The highest placed Bridgestone shod vehicle was Felipe Massa’s Sauber-Petronas, which came ninth. The results are good news for Michelin. Whatever happens during the course of the next Grand Prix race, Michelin is now mathematically assured of manufacturers/drivers championship victory.
Goodyear is to use its fleet of airships to encourage donations in support of the Hurricane Katrina relief efforts. The only airships with electronic day and night signs, the blimps will use their signs to promote fund-raising efforts from the American public.
Chuck Sinclair, senior vice president of global communications for Goodyear commented: “We talked about the possibility of flying signs over the affected areas, however it was agreed that the best way to offer immediate support is through an awareness campaign to alert the public where donations can be made. We recognise the relief efforts will go on for months, and we pledge our resources in support of these efforts as a way to keep the American public focused on the needs.”
Beru AG claims its technology is good for drivers’ wallets in addition to ensuring increasing levels of safety. According to the pressure monitoring equipment manufacturer, experts have calculated that roughly a third of all drivers are on the road with 0.2 to 0.7 bar negative pressure. And this means that they are also paying more than they should in fuel consumption. For example, if the tyres have 0.6 bar too little pressure, the fuel consumption rises by around four per cent.
Kumho Tire Co is planning to set up its third production plant in China, the company has reported. The move will reportedly go ahead in partnership with China’s largest vehicle manufacturer, China FAW Group Co (FAW). Kumho plans to build the production plant in the Chinese northeastern city of Changchun with an investment of $150 million.
Recycling has not only become more important to the public, but to the tyre industry too. Tyre recycling has a lucrative future, and tyre shredding is fast becoming a money-spinner for those companies involved. The choice of tyre shredding and recycling equipment manufacturers and distributors is growing, as is the range of casing collection services throughout the industry.
“However, it is one thing to realise the potential of this market but quite something else to actually set up a business that will evolve into a successful and lucrative service,” says Bob Batchford of RJB County Contractors. This is why the company has recently established a new division within the business, RJB Consultancy, to provide a service to both new and established businesses on how to achieve financial reward from tyre recycling.
According to Group Tyre, Maxxis is fast becoming one of the most highly regarded ‘premium budget’ brands in the UK. Chairman, John Church, commented on the development: “In the last two years, we have invested major resources in developing the Maxxis brand in the passenger car, 4 X 4 and light truck sectors, promoting its quality and value-per-mile attributes, which have clearly resonated with trade and retail customers alike. These initiatives have assisted in creating a firm foundation of distribution outlets, for the brand in the UK, and we can confirm that the initiatives will continue, as we look forward to further developing the Maxxis brand.”
Four members of Truck Point, the network of independent truck tyre dealers, won awards at the first-ever Truck Point conference. The awards were made by major customers that use the tyres and services on offer from Bridgestone and the Truck Point network.
Chris Deevey, head of purchasing for Ryder Europe, presented the Ryder award to Glyn Cainey, of Dexel Tyres, saying that the company had exhibited levels of service “second to none” and had been pro-active in reducing Ryder’s costs and downtime.
Bridgestone is urging tyre dealers across the UK to better understand the implications of fitting run-flat tyres. Despite continuing investment in the technology and an increasing number of run-flat tyres on UK roads, there have been reports of a lack of knowledge within the industry about how these tyres could and should be fitted.
As a relatively new market segment the ATV tyre sector is hard to define in terms of numbers. It is estimated that the UK ATV tyre replacement market lies between 40 to 60,000 tyres, but it’s difficult to qualify specific numbers when so few companies compile statistics. Despite this lack of information everyone involved in this area will tell you that ATV tyres, in particular the recreational types, are increasing and there is potential for much growth. Further opportunities within the segment are beginning to show themselves, giving wholesalers and retailers the chance to broaden their portfolios, but there are no realistic forecasts as to their expected success. Tyres & Accessories asks UK dealers whether the ATV tyre sector has the scope – volume and longevity – to become more than just another niche?
UK wholesaler, R H Claydon has, like every other ATV specialist, noticed an increase in sales of competition ATV tyres and believes that their volume will increase in the next two to three years. However, currently the utility side provides it with its volume sales, and the company expects this to remain the case, terming it a “drip feed” segment. According to the company’s corporate business manager, Dick Anderson, R H Claydon’s existing sales are split 90:10 (utility: recreational), but he expects this to shift in the future. Whether sales of recreational ATV tyres will ever equal that of utility the manager could not estimate, but he does believe that due to the sector’s following it will continue to grow for years to come.
Mr Anderson maintains that both the volume and longevity of the recreational ATV market are certain, but what about profit? R H Claydon broke into the ATV sports sector last year and has been joined by considerably more competitors since. The recreational ATV tyre side has, until now, been dominated by a small quantity of companies but the numbers are beginning to grow. “It’s a niche market,” claims the business manager, continuing: “however the profitability has been eroded to some degree over the last few years due to the increasing number of companies present in the market.”
David Williams, ATV department manager, Fieldens, agrees that there has been a significant increase in those involved in ATV tyres. “There was a time when only ATV centres dealt with the tyres however this has changed. Now there are many more companies offering the tyres, even retail chains, and if they don’t stock the tyre they will generally offer to find it for a customer anyway.” Both managers commented that the increasing number of ATV tyre brands on the market (especially those from China) has also had an affect on profitability. Dick Anderson added: “Margins on ATV tyres are acceptable, but have decreased as the tyre’s worth has gone down.”
If the individual profit of an ATV tyre has decreased then it is obviously important that overall volume does the opposite, and that new opportunities to make money present themselves to the wholesalers and retailers involved. According to Quad magazine’s Dave Bradford quadricycles have become a “sales sensation” in Europe and are becoming a more frequent sight on UK roads. This craze has therefore increased the need for street legal tyres; e-marked ATV rubber that offers a performance similar to a passenger car tyre. Maxxis UK estimates that currently 15 per cent of ATV tyres are used on road with the remainder used in off-road conditions. MD Derek McMartin also explained that street legal tyres have become a massive opportunity in America for the company and he expects the same to happen in Europe.
Because ATV tyres have changed in terms of usage over the last five years, the technology behind them has also had to change. ATVs initially raced on turf tyres until they became so popular that ATV racing rubber was developed. As well as that run-flats have been created for the utility sector, so both wholesalers and retailers are expecting big things when it comes to future street legal tyre development.
As far as the ATV specialists are concerned there are plenty of emerging opportunities within the segment for them to get their teeth into. But what they don’t want is every other retailer and wholesaler in the market to take a bite of the cake also! As far as the existing ATV tyre companies are concerned it is a specialist market and an area for the specialist dealer only.
“It’s very much a regionally specific market, and that makes it ideally a market for specialist farm dealers, or on the sporting side specialist ATV dealers,” maintains Mr Anderson. An ATV tyre sales person needs a “sound” understanding of the market to ensure they fulfil the needs of customer, agree both R H Claydon and Fieldens, inferring that it is not an area that simply any retailer can operate in.
According to Mr Anderson, forecasting an ATV tyre stock profile also complicates matters. “With ATV tyres you have to be able to offer a full range because demand can be very varied. It’s difficult to assess the stock profile because there may be eight or nine popular sizes in the utility segment and six in racing, but each range has its own popular fitments, and you want to be able to offer them all. We (R H Claydon) bring in our ATV tyres by container so we can offer a full range, even of the less common sizes, but not every company is in a position to do that. So it’s not an area that every wholesaler and retailer could get into.”
As both the ATV utility and recreation markets develop new branches the market certainly seems to have the capacity to sustain the expected future growth. But whether these new opportunities mature into long-term profits is difficult to estimate at such an early stage. The wholesalers and retailers certainly have faith in the niche’s permanence and future volumes, just as long as it remains that, a niche.
Deutsche Bank analysts are convinced that Continental’s US passenger car division has made losses of up to 200 million euros last year. The closure of Conti’s Mayfield facility was expected to have cost up to 120 million euros alone. Financial experts have abandoned hope for a noticeable and continuous growth. During 2005 the tyre manufacturer is expected to come up with an annual loss of about 100 million euros, says Deutsche Bank, meaning that the shutdown of the Mayfield factory didn’t have its expected positive affect.
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