Now one of the largest tyre-producing countries in the world, China has an indisputable influence on the direction of global tyre trade. The home of both fast-growing up-and-coming brands as well as a burgeoning domestic market, this tag chronicles China’s involvement with the tyre business.
The Yokohama Rubber Co., Ltd. And Kumho Tire Co., Inc. signed a Memorandum of Understanding (MOU) on 29 November. The companies report that they have agreed to open discussions relating to technology exchanges and a capital alliance based on “cross-shareholdings”.
Cooper Tire has announced its plan to open a 6,800m2 distribution centre in conjunction with logistics expert, Milsped, in Belgrade, Serbia. The facility will be located alongside Milsped’s corporate headquarters in the Krnjesevci area of Belgrade. Due to open in December, the centre will have a storage capacity of up to 400,000 tyres.
At Continental and Schaeffler’s joint ‘Premium Supplier Day’ in November the two companies named 12 new companies as premium suppliers, and renewed the status of their 19 existing premium suppliers. At the ceremony, Günter Fella, Continental Automotive’s senior vice-president of purchasing, described the cooperation with its premium suppliers as the “basis for a successful industrialisation” of new technologies.
Historically, many fleets have taken a short-term view of their tyre policy and failed to plan ahead. This is particularly the case for fleets facing immediate pressures, as the temptation not to consider three years in the future is strong for operators who are uncertain if they’ll even remain in business that long. Yet short-term savings can prove costlier in the long run, and Michelin opines that fleet operators need to consider their tyre choice in a similar way to their vehicle choice – they need to ensure it is right for the application and vehicle.
Sales of locally-produced Continental run-flat tyres will reportedly begin in China before the end of this year. Quoting Jay Dhillon, general manager of Continental Tires China, the China Daily wrote on 28 November that annual output of these products will reach 340,000 units next year and 510,000 units in 2015. Hefei is the fourth Continental plant to begin run-flat production, after Aachen (Germany), Port Elizabeth (South Africa) and Mount Vernon (USA).
The hybrid communist/capitalist system makes the Chinese political environment an odd one for those doing business inthe People’s Republic. As well as booming demand for imported brands (many of which are manufactured domestically), the strange combination of top-down legislative rule-issuing combined with crypto-relational give-and-take means success is as much about knowing the people and protocol as it is about having your numbers straight. So when the ruling communist party announced a string of apparent liberalisation measures, you can imagine why Chinese middle class and the businesses employing them (as well as courting their custom) inclined their ears.
Writing on Reuters Breakingviews, corporate finance columnist Una Galani draws attention to how financial institutions contributed towards the current tensions between Apollo Tyres and Cooper Tire & Rubber. She opines that Apollo’s move to renegotiate its Cooper acquisition deal and seek a buying price less than the US$2.5 billion originally offered was pushed by attempts from Apollo’s lenders to extricate themselves from the takeover agreement.
The MG marque returned last year as a brand owned by China’s SAIC, and now the second new MG model has arrived in the UK. Following its launch at Auto Shanghai 2013 in April the new MG3 is now available here – and Goodyear has been chosen to provide original equipment tyres for all versions.
The Belgium-based Bosal Group has opened its first production facility for automotive emission control systems in Chongqing, China. According to the company, the new 2700 m2 facility in Dadukou District will produce innovative emission control systems and components for passenger car manufacturers in the region. The factory is reporteldy equipped with a latest technology production line including laser welding and CNC roll forming. The news comes less than 8 months after the firm closed its UK production operations with the loss of over 100 jobs.
Amongst the news announced at the Agritechnica 2013 show was that Netherlands-based truck and off-road tyre specialist Heuver Tyrewholesale has obtained exclusive rights in a number of European countries to distribute the agricultural range from one of China’s best-known tyre makers. Heuver will initially focus on distributing the LingLong agricultural range in Germany and the Benelux markets.
Kumho reports that in October it began delivering its Ecsta HM KH31 for original equipment fitment on the Mercedes-Benz B-Class. The compact Mercedes-Benz receives size 195/65R15 91H tyres produced at Kumho’s Tianjin factory in China.
Luxembourg-based Maxam Tire has been very active recently in the exhibition arena, showing examples of its product range at shows in China and Belarus.
Current low prices for butadiene rubber have been singled out as a key reason why sales within Lanxess’ Performance Polymers business declined eight per cent year-on-year to €1.1 billion in the third quarter of 2013 despite a 14 per cent rise in volumes. Lanxess says lower raw material prices, especially butadiene, led to selling prices dropping 19 per cent. Sales were also hampered by negative currency effects.
At this month’s SEMA show in the US, the China Manufacturers Alliance (CMA) displayed the first Warrior brand passenger car tyres sold in North America, the R29 and R30. The Warrior range, the product of a joint-venture between Double Coin Holdings and Michelin Tire Group and manufactured by Double Coin Group (Anhui) Warrior Tyre Co., was re-introduced in the Chinese domestic market in May 2012 following a two year absence.
Didn’t know today was World Quality Day? Neither did we. Nevertheless, the United Nations-established event has been held since 1990 and aims to increase worldwide awareness of the important contribution quality makes to national and organisational growth and prosperity. Continental says 16 of its Tire division locations around the world are participating in the day; under the slogan “Continuously Striving for Best in Class in Quality, employees will organise events and activities in order to raise quality awareness.
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