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UK Agricultural Tyre market: a steady decline but still good business

The Agricultural tyre sector in the UK has had a tough year. It began with the aftermath of Foot and Mouth. There was an extremely wet start to the year. Then a prolonged dry period – the driest – if not the hottest – in 25 years.

Wet weather usually means more sales for the agricultural sector, but too much rain just stops the market in its tracks – no pun intended. That was the case early in the year. When the weather turned dry the public lapped up the sunshine and the long dry spell, but farmers anticipating the traditional UK summer were faced with their own dry weather difficulties.

However, tyres and traction were not amongst their troubles. Dry fields do not create traction problems and the agriculture sector stretched the mileage of existing tyres well beyond their expected lifespan. The result has been a drop in the overall market of something around 10 per cent.

The wider agricultural market is dominated by Michelin, Goodyear, Continental and Bridgestone in the UK – with the big players accounting for around 60 per cent of the market. Although just how big the market is no-one can say. That 60 per cent represents almost two thirds of the premium brand tyre market. It does not include the figures of the budget brand sector. As with the car and truck sectors there is no hard evidence to confirm the sales figures at the bottom end of the market. Asking tyre companies about market share results in a sum that is greater than the whole. But general consensus places Michelin group at the head of the market, followed by Goodyear Dunlop, then Continental and Bridgestone followed by Trelleborg/Pirelli and Vredestein.

In order to sell tyres it is, in every sector, important to know who, or what, the customer is and what is being sought. It might be a fair assumption to say that the farmer expects tyres to do the job they are asked to do. That, in itself, is open to interpretation. The contractor may be keeping an eye on the slip meter in the cab and be watching for the point of diminishing returns from a set of tyres; changing them at the point when they become inefficient for his purposes. Another farmer using the same tyres may take a different approach, saying that so long as they hold air they will stay on the tractor. Somewhere in-between there are those who only change tyres when they are damaged beyond repair – they may change the tractor at the same time as the tyres. In marketing tyres to the top end of the agricultural sector though, there must be an assumption made that the people prepared to pay the premium price for a leading brand tyre must have some concept of tyre management and an eye on productivity and efficiency.

28th January 2004/by Tyrepress Editors

Andreas Niegsch: “Our brands are our greatest asset”

It has been an eventful – some might say traumatic – year or two for the Goodyear Corporation as it struggled to integrate Dunlop within its organisation across Europe and the USA. One of the countries that has seen a great deal of change is the UK, where a number of different methods of restructuring have been tried, with varying levels of success. Recent changes affected the management at the highest level – Goodyear and Dunlop had their own MD’s, reporting to Marco Molinari, who was in overall control. When Molinari left the company, it was decided to change the management structure and responsibilities. Out went the two separate MD posts and a General Manager was brought in.

That person was Andreas Niegsch, a 39-year-old German who only joined Dunlop in 1998. One year on, the structure is in place and beginning to produce results and Andreas Niegsch found the time to give his first press interview, with T&A. Where Andreas Niegsch’s position differs from that of his predecessors is that he is responsible purely for the sales organisation at Goodyear Dunlop and the UK factories report to Goodyear Dunlop Europe. By not being responsible for manufacturing, Andreas Niegsch is free to concentrate on sales and in getting closer to the market and the customer.

The new structure has separate sales divisions for consumer, commercial, farm, earthmover, motorcycle and motorsports tyres and these are supported by functions such as HR, logistics and finance. Retail is treated as a separate profit centre and a new marketing department has been created to support all the product groups. Given enough time, things will turn around, said Andreas Niegsch, as the company has the funds and has bought itself the time to implement the necessary changes. However, whatever else changes, he believes that Goodyear Dunlop still has those two priceless assets; two brands that are worth their weight in gold.

12th December 2003/by Tyrepress Editors

Daytona stumping Dunlop?

Reports from the annual tyre tests at Daytona Superbike trials have been called off due to a series of tyre failures. Dunlop is working frenetically to overcome the difficulties but leading racers are not blaming Dunlop for the failures but rather the condition of the banked Daytona circuit and the power of the Superbikes. “Tyre wear is not the issue or the reason why for the failures.” Said team manager Matt Mladin. “The problem Dunlop is facing is that they just don’t know why it’s happening. The bottom line is that the speeds and the forces generated on the banking, I don’t think can be replicated in a closed testing environment and that makes it hard. The banking does have what feels like very sharp holes, what would feel like stutter bumps on a motocross bike, but at 270kph, so is this additional load causing the tyre to fracture. That’s the thing at the moment, we just don’t know.”

11th December 2003/by Tyrepress Editors

Goodyear: Net loss grows to 332.4 million $ for the first 9 months

Tyre manufacturer Goodyear announced a net loss of 332.4 million US Dollars for the first nine months of this year. The net loss for the 3rd Quarter totalled $105.9 million. Sales in the last quarter rose around eleven per cent from 3.5 to 3.9 billion Dollars. However, volumes increased only by approximately two per cent from $54.4 (3Q 2002) to $55.3 million (3Q 2003). According to Goodyear, the turnover increased partly due to currency-exchanges and partly due to an improved product-mix. CEO Keegan is of the opinion that the efforts of the last months are bearing fruit. Nevertheless the fact is that the company disappointed again on the full line.

21st November 2003/by Tyrepress Editors

Goodyear: Net loss grows to 332,4 Million $ (Update)

Goodyear’s 3rd Quarter 2003 results were taken up by the financial world with a deal of restraint and also with some disappointment. The Analyst at UBS Investment Research fears that because of the continuing loss situation in North America Goodyear shows signs of a possible breach of a covenant, while an analyst at Fitch Ratings asks impatiently, how long one has to wait for signs of the promised turnaround in North America? There was particular criticism that Goodyear was able to increase sales volumes only by approximately four per cent, in a market which grew by 6 per cent, while competitor Cooper added around nine per cent. Doubts were voiced that Goodyear can increase prices to the full extent needed, because of raw material price increases. While Goodyear mentioned positive trends, these were not apparent to observers.

21st November 2003/by Tyrepress Editors

Hwa Fong plans listing on Thai Stock Exchange

Hwa Fong Rubber manufacturer and distributor of Duro and Dunlop tyres, will list on the Stock Exchange of Thailand on Dec 15.

12th November 2003/by Tyrepress Editors

Street-legal drag tyre Dunlop SP Sport Inferno

At the SEMA show, Dunlop has unveiled a competition drag tyre that is also street-legal, aimed at the sport-compact drag segment, allowing enthusiasts to drive to the track and test their vehicles without changing tyres. The tyre, called the “Inferno”, looks the part as well, with an image of flames on the sidewall, and a tread pattern of directional, sweeping grooves to optimise straight-line performance. The Inferno’s compound is based on the Dunlop drag racing slick and the tread pattern, carcass and mould shape were computer-designed. It will be available early next year in size 205/50 R15.

6th November 2003/by Tyrepress Editors

Dunlop’s Super Sport Race in North America

Dunlop North America announced the SP Super Sport Race; a Z-rated radial designed for super car owners and autocross enthusiasts who want a non-competition, street-legal tyre that nevertheless has race-like levels of grip. The Super Sport Race is available in eight Z-rated sizes, with aspect ratios from 40 series down to 30 series and for 17″ and 18″ wheels. Target cars include Audi TT, A4 and A6, Porsche 996 and 986, BMW 3 series, 5-series, M3 and Z3, Honda S2000, VW Golf GTi and the Mercedes SLK, CLK, C-class and E-class.

6th November 2003/by Tyrepress Editors

Michelin Ranks Highest in Germany OE Tyre Customer Satisfaction

Michelin ranks highest in original equipment (OE) tyre satisfaction for the third consecutive year, according to the J.D. Power and Associates 2003 Germany Original Equipment Tyre Customer Satisfaction Index Study released today.

23rd October 2003/by Tyrepress Editors

Marketing appointment for Goodyear Dunlop UK

Neil Burrows (44) has been appointed to the newly-created role of Marketing Director for Goodyear Dunlop UK. He joins the company from Nissan Europe,
where he was responsible for advertising and brand management across Europe. Before this he was Marketing Director of Nissan (GB).

9th October 2003/by Tyrepress Editors

Reifen Schwarz in deep water

The company, based in the South of Germany and founded in 1924, has 50 outlets, of which are 4 in Austria and 2 in the Czech Republic, and makes a turnover of more than 100 million Euro with 500 staff. Due to the ongoing poor business situation there have been rumours in the market that Schwarz would sell to Bridgestone, as an emergency measure. Now the management was forced to admit during a meeting of creditors that Bridgestone has surprisingly withdrawn. It is said that the expectation of the Schwarz Family regarding a goodwill payment was far too high. Schwarz might possibly apply for insolvency early next week. Suppliers such as Dunlop, Pirelli and Bridgestone have already collected the remaining tyres which Schwarz had in stock. This magazine’s information is that there will be a meeting on Tuesday next week with creditors. In the meantime, it is said that the Schwarz family will establish a rescue company.

3rd October 2003/by Tyrepress Editors

Ups and Downs for Goodyear in August

Goodyear claims to have increased replacement tyre shipments by 4 per cent over the previous year’s level. In August industry shipments of tyres to OE declined by 11 percent, Goodyear’s decline was less than the industry average. However shipments of commercial replacement tyres declined by more than the industry level of 10 per cent. Additionally product mix was unfavourable due to market share gains by Dunlop, Kelly and associated brands. Goodyear shipments of commercial OE tyres fell at the industry rate of 10.5 per cent.
Outside the North American market Goodyear performed well in all other areas with increases in aftermarket car and tyres in every region, but some decline in most markets for commercial vehicle tyres. OE supply varied depending upon the application of the company’s selective OE strategy.

24th September 2003/by Tyrepress Editors

Goodyear claims to achieve flexibility, cost goals with USWA Pact

The Goodyear Tire & Rubber Company has stated that its new labour contract with the United Steelworkers of America (USWA) meets the operational flexibility and cost-savings goals established prior to the negotiations. “Our goal for these negotiations was to achieve what some thought was impossible: a fair agreement that contributed approximately 1 billion dollars in cost savings and cost avoidance over its three-year term without a work stoppage,” said Robert J. Keegan, Goodyear chairman and chief executive officer.

23rd September 2003/by Tyrepress Editors

Wolverhampton car tyre production to cease

Goodyear Dunlop Tyres UK Limited has announced that it has initiated an information and consultation process with Union Representatives regarding possible redundancies as a result of the removal of car and radial light truck tyre production at its Plant in Wolverhampton, West Midlands. The company has advised the UK Department of Trade and Industry and our Unions today that we will be ceasing production of car and radial light truck tyres in Wolverhampton and that up to 420 associates could potentially be affected. The remaining production from Wolverhampton is unaffected by this decision, with tractor tyre manufacturing and other processes used in tyre production, such as mixing, calendering and retreading, continuing on the site.

23rd September 2003/by Tyrepress Editors

All round Dunlop for SUVs and Light Trucks

Dunlop has announced a new, multiple application tyre targeted at the multi-purpose usage engaged by sport-utility vehicles and light trucks. The new Dunlop Rover RVXT is an all-terrain performance tyre carries the Rubber Manufacturers Association’s standard that designates tyres designed for use in severe snow conditions. The Rover RVXT is labelled with the mountain-and-snowflake symbol on the sidewall to distinguish its capability as a winter tyre. A key benefit for Dunlop dealers is the consolidation of two existing product lines – the Dunlop Rover RV and Rover P-Metric – as the new Rover RVXT hits the market. The new line offers 31 sizes, ranging from 15-inch to 17-inch rim diameters. The Rover RVXT’s tread pattern features a rugged, four-rib design to provide excellent on- and off-road performance. The tread has deep lateral grooves that provide extra traction in tough conditions, and circumferential grooves that assist in channelling water away from the tyre’s contact point patch with the road surface.

19th September 2003/by Tyrepress Editors