Bridgestone Europe has officially opened the extension to its European Distribution Centre at Zeebrugge, Belgium. The size of the facility has doubled from 28,000 sq. m. to 56,000 sq. m., capable of holding 800,000 passenger car tyres as well as the 110,000 truck and bus tyres already housed on site.
The Vietnamese Government has taken steps to protect its domestic rubber industry by imposing an import tax on car tyres and tubes of 30 per cent and a 50 per cent tax on motorbike and bicycle tyres and tubes. These will fall to five per cent by 2006, as a condition of Vietnam’s entry into AFTA; the ASEAN Free Trade Area.
In South Africa, Yokohama is drastically cutting prices of passenger car tyres, by up to 26 per cent. The company says that this is because the Rand has strengthened against other currencies and is challenging competitors to reduce prices also. Yokohama has an estimated 2 per cent share of the South African market.
Michelin’s first quarter sales fell 4.9 per cent year on year to 3.655 billion Euros. This was due to a strong negative effect (-10 per cent) due to the weakness of currencies in North and South America versus the Euro. Sales volumes rose, but income fell in passenger car/light truck (-4.9 per cent), heavy truck (-0.9 per cent) and other segments (-5.4 per cent). Despite these figures and a predicted decline in markets, financial analysts regard Michelin as well positioned to make progress, although lower profits for 2003 are forecast.
Dr Peter Kronthaler, Managing Director Pirelli Motorcycle Tyres Germany, has confirmed that production of Metzeler car tyres will go ahead. The tyres will be offered alongside Pirelli and will not be marketed as middle market or budget tyres but have a parity with Pirelli. It is believed that two production lines will be given over to Metzeler production, but sizes, names and prices have yet to be confirmed.
Four years ago: In an interview at the Geneva Autoshow, Sam Gibara put forward his views. Goodyear had, according to him, the best people, the best distribution, the most cost-effective plants, the best products and – with its innovative EMT tyres – a three-year lead over its competitors. Within three years, he predicted, 75% of Goodyear tyres produced would be EMT tyres (in 2002, the actual figure was one million tyres). The IMPACT production process (Integrated Manufacturing Precision Assembled Cellular Technology) was held up as a revolutionary advance, guaranteeing predominance over the competition and an example of Goodyear’s technical leadership.
Business newspapers in France and England are commenting on a paper from the french analysts Gaetan Toulemonde and Alexis Boyer both from DB Global Equities are recommending Michelin shares as a clear “buy”. The share price – at about 31 Euros at present – has, according to the analysts, the potential to rise to 50 Euros within 12 months. Michelin is seen by them as “the BMW in the tyre industry” with strong brands and an excellent brand strategy. It is expected that Michelin will announce in a press conference at the end of February a turnover for 2002 of about 15.7 bn Euro and an operating profit of 1.1 bn Euro. For this year the company is aiming for a turnover of more than 17 bn Euro and an operating profit of more than 1.2 bn Euro. The stock capitalisation at present is 4.6 bn Euro.
T&A looks at the recent history of retreading, the threats and the opportunities. According to RAPRA, the number of tyres generated in the UK that would be suitable for retreading is around 15 per cent of car tyres and 50-70 per cent of truck tyres. However, it is reported that only nine per cent of car tyres are retreaded and as few as 24 per cent of truck tyres. It should be noted that many customer own tyre contracts include retreaded tyres which do not get included in this figure and these may amount to as many as 35% of the total retread truck tyre volume in the UK. In 1994 an estimated 14 per cent of the UK car tyre replacement market was taken by the retread sector. This dropped to 12 per cent by 1998 (something around 16 million tyres) and collapsed to eight per cent in 1999 and is continuing to fall. This is a far cry from the 20 per cent market share held in the 1970s and 1980s (when, ironically, the quality was perhaps not quite so good as it is today). Figures for the tonnage retreaded show an increase between 1999 and 2000 from 76,000 tonnes to 77,000 tonnes. Truck retreading is not a particular problem, though there are shortages of casings in some sizes, particularly older more popular retread sizes. The truck tyre market is looking at the cost per kilometre, and retreading lowers the cost per kilometre and makes tyre use much more cost effective. The truck operator sees retreads as a tool to lower running costs.
Nokian’s 3Q net sales were up 11.1 per cent at 117.9 million Euros, but higher fixed costs affected operating profit, which was 15.2 million Euros (3Q 2001: 18.6 m). 51 per cent of Nokian’s income comes from car tyres and 63 per cent is generated in Scandinavia and Finland. Sales of heavy tyres and bicycle tyres both rose, but sales of retreading materials fell. Vianor, Nokian’s retail chain, showed an increase in sales of 14.4 per cent, but operating profit was similar to 3Q last year.
1997 marked the US-comeback for BFGoodrich Tires in the agricultural segment, where the brand had a long tradition. Now BFGoodrich Tires – well-known for off road and car tyres – is returning to the European agricultural tyre sector as the second world brand in Michelin’s multi-brand-strategy. Across the world and in the tyre segments where Michelin is well-known for attributes like “premium, innovator, top technology”, BFGoodrich Tires will be positioned in the “value for money” segment, in original equipment and the aftermarket also. Overlapping in some sub segments such as front and implement tyres with the brands Stomil/kormoran and Taurus will, in the long run, be resolved in favour of BFGoodrich.
Bridgestone Corporation has announced that it and its subsidiaries will expand their collective production capacity worldwide. It also announced that the Bridgestone Group will realign the geographical distribution of production capacity for different kinds of products. Bridgestone and its subsidiaries will invest approximately 250 million dollars in the production expansion and realignment, according to the announcement. The moves are measures to cope with the shift toward larger sizes of passenger car tyres in the industrialised nations and the growing demand for commodity-grade tyres in the newly industrialising economies of Asia and elsewhere.
Continental’s second quarter results are generally encouraging; better than forecast by analysts. Group sales were up slightly (0.2 per cent) compared to Q1 last year, at 2.925 billion Euros. Operating income was 193 million Euros. Divisionally, the best growth in sales was achieved by the Automotive Systems division, which gained 10.8 per cent. Revenue at the other divisions – car tyres, truck tyres and ContiTech – all fell, though all made a profit. Analysts regard Conti’s restructuring as the main reason for the good figures although the North American business of Conti General continues to have an adverse effect on profits.
Yokohama Rubber is to mass-produce car tyres, using a new production system based on an idea from Fuji Seiko Co. Ltd. Yokohama is a member of a group of companies aiming to commercialise the system. Details of the system are not available but it is said to produce high precision tyres with low distortion and consistent quality. As well as Fuji Seiko, Yokohama has been working with Toyota Motor to evaluate the tyres.
India’s second-largest tyre manufacturer, Apollo Tyres, is to invest 1.1 billion Rupees (24.7 m Euro) in a plant to make radial truck and bus tyres. The plant will be sited at Baroda, in Gujarat, next to an existing Apollo factory and will use technology from Continental, with whom Apollo has an existing collaboration. Apollo claims a 25 per cent share of the truck and bus tyre market but poor infrastructure and a large number of two-axle vehicles mean that radialisation in this sector is a very low 2 per cent.
US recycling giant, GreenMan Technologies has reported its sixth profitable quarter in a row. Net Sales for the second quarter ended 31 March 2002 totalled 5.561 million dollars, an increase of 21 per cent compared to the same quarter in 2001. The company processed the equivalent of 5.6 million passenger car tyres in the second quarter of 2002, an increase from 4.8 million in the same quarter of the previous year. Operating profits for the six months to the end of March 2002 have increased by over 100 per cent to 932,000 dollars.
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