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India’s ATMA Seeking a 7.5% Rubber Tariff

A memorandum sent by India’s Automotive Tyre Manufacturers Association (ATMA) to the nation’s finance ministry outlines the tyre industry’s hopes for a reduction in natural rubber duties. Reuters reports that the memorandum, sent in advance of the national budget, states “the customs duty on natural rubber should be reduced from 20 per cent to 7.5 per cent, lower than the duty on tyres.” At present natural rubber attracts a customs duty twice that of tyres, making imports more competitive than locally produced tyres.

18th February 2010/by Tyrepress Editors

Hankook Management Target 11 per cent Price

Hankook Tire’s management are confident they can raise confidence in its ability to their products’ global average selling price by between seven and eight per cent in 2010. According to an investors note published by Deutsche Bank, additional price hikes are possible, with Hankook’s management said to be targeting an 11 per cent increase.

According to the financial analysts, Hankook’s confidence of being able to successfully implement the prices increases is based on the fact that “demand in key markets remain supportive expecting.” In real terms this means managers expect year-on-year sales volume growth of around 14 per cent this year with 100 per cent utilization.

5th February 2010/by Tyrepress Editors

Hankook Contemplating Price Increase

Bloomberg has brought news of Hankook Tire’s plans to increase prices to meet rising raw material costs. The company has already raised prices in the US, and according to the news service, Hankook Tire spokesman Yoon Seong Ha said “We’re considering raising prices in other regions.

25th January 2010/by Tyrepress Editors

Analysts: US Replacement Tyre Market Recovering

In the US, RMA members reported that replacement tyre demand grew 9.3 per cent year-on-year in December 2009, from a drop of -16.0 per cent the year before. Financial analysts pointed out that the overall market volume grew 6.1 per cent, implying that domestic tyre manufacturers (namely Cooper Tire and Goodyear) continued to experience market share gains. The is believed to be a result of last year’s Chinese-made tyre tariffs as Chinese produced tyres reportedly occupied 16.6 per cent of the US market in 2008.

13th January 2010/by Tyrepress Editors

Analysts: Conti Merger Saga 'Turning a Corner'

Morgan Stanley analysts have described Conti's recent share issue as a “very significant” move forward in an investor's note dated 8 January. “We think Conti's latest recapitalization effort is positive for four main reasons: it enables the forward start on the 2010 debt maturities… the 35 euros price was a smaller discount than… expected; [it] increases free float to 25 per cent from 11 per cent and helps stabilize the company's image in the marketplace which reduces the risk to the underlying business.” While they conceded that this final point is “intangible,” the analysts report that the share offer addresses a key concern “that Conti's winning culture and ability to retain existing contracts, attract new business and new human talent was threatened by an unstable financial future.” In this regard, we think Conti is turning the corner.

11th January 2010/by Tyrepress Editors

Tyre Industry Needs 4% Price Hike to Offset Natural Rubber Costs

Assuming foreign exchange rates remain stable, the sky-rocketing natural rubber price means the tyre industry will have to increase selling price by 3-4% to offset this raw material. That’s the view of Deutsche Bank analysts who report in a recent investors note that the natural rubber price has doubled over the last 12 months from US$1.5/kg to US$3.0/kg (RSS3 grade). “This increase will have a four to six months lag effect on tyre companies’ profit and loss…So far, we have no reason to be worried since…end market volumes are recovering (especially on passenger car tyres…inventories at dealers are low (sell in markets have been worse than sell out markets),” they analysts explained.

7th January 2010/by Tyrepress Editors

Delticom 2009 Sales Pass 300 million Mark Due to Snow

On 4 January Delticom AG, Europe’s leading online tyre dealer, predicted it will beat its full year 2009 revenue and earnings forecasts. While the severe weather has slowed down many business over the Christmas and New Year period, representatives of the Hanover, Germany-based Delticom report that the snowy weather helped 2009 sales past the 300 million euro mark. The company had previously forecast sales of 285 million euros for the period.

5th January 2010/by Tyrepress Editors

Michelin to Bring Bigger, Better Media Centre to NAIAS

The North American International Auto Show in Detroit gets underway on January 11, and the 2010 exhibition marks the 22nd year of Michelin’s sponsorship of the show’s official facility for journalists and other media representatives. For the 2010 Detroit show the Michelin Media Center has grown to 27,500 square feet and accommodates 600 working desk spaces. Each desk features electrical and hard-wired, high-speed connections to a robust fibre-optic network for working media. In addition, the 2010 facility includes an expanded photo centre, media lounge, and additional team tables customised for the needs of new media.

16th December 2009/by Tyrepress Editors

Trelleborg: “We Will Continue to be a Successful Company”

The president of Trelleborg’s Agricultural and Forestry Tire Business Unit, Paolo Pompei, has commented that the division will go ahead with the investments planned for the next two or so years. “In a time of uncertainty such as this, some companies choose to reduce, freeze or even dispose of their investments,” Pompei commented. “Trelleborg, however, looks to the future in a positive way and continues with all its planned investments for 2009 to 2011.” In its 2008 annual report, Trelleborg stated investments in the agricultural tyre sector would focus upon “further development of the customer offering.” The company outlined that its Wheel Systems’ development centre in Italy is in the process of working on the next generation of high-performance agricultural tyres in cooperation with leading machinery manufacturers, and is preparing to present new products that address the key requirements of high speed road capability, comfort, roadholding, low soil impact and environmental sensitivity.

10th December 2009/by Tyrepress Editors

Analysts Recommend Korean Tyre Shares

Financial analysts are recommending buying shares in Korean tyremakers (particularly Hankook and Nexen), following their initiation of stock coverage at the end of November. Their view is that internal structural and strategic fundamentals and external conditions are now favouring Korean tyre makers: “The top three global tyre makers continue to lose market share, having lost 10 percentage points in the past 10 years. On the other hand, we expect the global market share of Korea’s three tyre makers to rise to 7.2 per cent by 2010 from 5.5 per cent in 2008 (by revenue),” Deutsche Bank wrote in an investors report dated 21 November.

3rd December 2009/by Tyrepress Editors

Morgan Stanley: Michelin Revenues to Grow 7% in 2010

Although Michelin managing partner Michel Rollier has expressed doubt that the tyre major’s revenues will increase in 2010, other expert opinions differ. Morgan Stanley Research Europe stated on November 24 that “we expect revenue growth of seven per cent – far more optimistic than Michelin management's recent outlook of no growth.” This prediction is even more optimistic than the Bloomberg survey of analysts that netted an average estimate of revenues rising by 4.3 per cent to 15.4 billion euros. To expand on the Morgan Stanley projection, an expected ten per cent volume growth should be partially offset by a three per cent decline in price/mix.

26th November 2009/by Tyrepress Editors

Increase in Michelin Revenue for 2010 Unlikely – Rollier

Revenue at Michelin & Cie. is not expected to increase next year. Managing partner Michel Rollier has expressed his caution on growth prospects due to uncertainty about the automotive industry’s recovery and rising raw material costs.

23rd November 2009/by Tyrepress Editors

Tyre Business to be 95% of Pirelli Revenues Following Real Estate Spin-Off

Deutsche Bank Equity Research analysts report Pirelli’s intention to purely concentrate on the company’s tyre business following the spin-off of its real estate assets by mid-2010. Once this has taken place, tyres will represent 95 per cent of Pirelli’s revenues, the report adds. Management at the Italian manufacturer is said view the coming year with confidence, a positive view driven mostly by a recovery of volumes in replacement markets. It believes the entire seven per cent decline experienced in the passenger car tyre market and half the truck tyre market’s 14 per cent drop can be recovered during 2010. This positive effect, comments the bank’s analysts, should more than offset a small increase in raw material expenses, as the tyre industry is expected to remain “disciplined” in passing on raw material price increases to consumers.

20th November 2009/by Tyrepress Editors

Ukrainian Tyre Recycler Coral Group Joins TRIB

Coral Group Ecological Technologies (Ukraine) has become the latest company to join the Tire Retread & Repair Information Bureau (TRIB). Formed just over five years ago, Coral Group has developed what TRIB describes as “a very important method for recycling waste tyres and has a pilot plant in operation in the Ukraine to prove the economic and environmental benefits of their method.” Coral Group’s method is a pyrolisis-based technique that the company says results in an “ecologically clean and financially beneficial method of recycling the worn out automobile tyres.”

To get an idea of the scale of what Coral Group are planning, subscribers can view company’s corporate video below.

18th November 2009/by Tyrepress Editors

Plimsoll: 45 UK Companies Will Finish 2009 in Difficulties

At the end of a turbulent 2009 analysts of Plimsoll are predicting 45 UK tyre manufacturers and distributors will be struggling to see 2010 out: “Having clung on through the bad times many of these struggling companies are going to run out of time and fail just before the recovery really takes hold. Sadly, some of them are just too weak to carry on and there will be a spike of failures in the New Year. On the flipside, their demise will bring a welcome reduction in competitive pressure for those left”.

Pattison is convinced the market is due a prolonged period of consolidation with the number of companies in trouble leading to heightened takeover activity. He explains: “With too many companies chasing weakened demand it is inevitable that there are likely to be a number of high profile mergers and takeovers. In all honesty it’s long overdue. Once demand started to flag it was inevitable companies would be caught out. This period of consolidation is needed to sort out the dead wood. We have named 21 companies as the best acquisition prospects in the market”.

3rd November 2009/by Tyrepress Editors