Pirelli has announced that it is to increase prices of tyres in all European markets, due to “considerable and unexpected increases in the cost of raw materials.” The increases will be between four and five per cent and will come into effect by June this year.
Goodyear has said that its net income figure for the past six years will be reduced by $65 million, due to improper accounting and other reasons. The improper accounting figure – most of it in Europe, and for which several senior managers have been disciplined – comes to $10 million and the remaining $55 million is attributed to workers’ compensation claims, product liability, profit elimination in inventory and other items.
At its Annual General Meeting, Nokian Tyres elected Mitsuhira Shimazaki, Director, Sales Administration, Bridgestone Europe, to the Nokian Tyres board of directors. A year ago, Bridgestone announced that it would take a stake in Nokian (nearly 19 per cent) for 78.34 million Euro. Also at the AGM, Nokian agreed to pay a dividend of 1.56 Euro per share.
Robert J. Keegan, chairman and chief executive officer of The Goodyear Tire & Rubber Company, has been elected to the board of directors of Sumitomo Rubber Industries Ltd. in Kobe, Japan. Goodyear and Sumitomo Rubber Industries have six joint venture businesses in North America, Europe and Japan. In addition, each company holds common stock in the other.
The Indian tyre industry is expected to register impressive growth coming from a combination of both organic and inorganic development, according to credit rating agency ICRA. Consolidation of the Indian tyre industry is expected to continue through mergers of existing players. While organic growth would come from raising efficiency levels, inorganic growth would be achieved through alliance and mergers and acquisitions, it said. To leverage growth, ICRA predicted that tyre makers would expand their dealerships and explore tie-ups among themselves to increase customer bases. Outsourcing would also play a major role as many companies have entered into offtake agreements with tyre producers in South-East Asia, Eastern Europe and Latin America.
Goodyear Tire & Rubber Co. on Tuesday again said it needed more time to finish a financial report for federal regulators because of its probe of accounting problems at overseas operations. The company said after the markets closed that it would tell the Securities and Exchange Commission that its annual 10-K report will be delayed because of the investigation of accounting problems in Europe and elsewhere. Goodyear shares plunged more than 5.6 percent, or 44 cents, in extended trading Tuesday, after closing at 7.84 dollars, up 26 cents, on the New York Stock Exchange. However, after-hours trade climbed on the news of the delay, rising 3.5 per cent to 8.12 dollars on INET.
Goodyear has fired three of its European managers, obviously holding them responsible for what the company calls accounting errors. Scialom (Vice President Finance Europe), McKnight (Managing Director Sales Countries) and his finance manager Loysen have bitten the dust. As far as it is known the three were given no reason for the notice, at this stage. Spokesmen for the group even refused to comment as to whether the three had been fired or had taken retirement. Goodyear is under formal investigation by the SEC and had to inform the public yesterday yet again, that it had found more accounting errors in the US, in the region of 16 million US dollars. Analysts are now concerned that Goodyear could be too busy dealing with these alleged improper actions instead of leading the company into a much needed turnaround.
Interstate Europe BV, the European importers for the Mastercraft brand manufactured by Cooper Tire, has announced the appointment of British & International Tyre Supplies (B.I.T.S.) as the new UK distributors for the complete Mastercraft passenger tyre range. Read the full story in the April edition of Tyres & Accessories.
The group recorded a 96 per cent increase in net income in 2003, to ¥88.7 billion (0.8 billion US dollars), on a 2 per cent increase in net sales, to 21.5 billion US dollars. Operating income was basically unchanged, at 1.7 billion US dollars, and ordinary income rose 13 per cent 1.6 billion US dollars. Net return on shareholders’ equity was 10.5 per cent, compared with 5.6 per cent in the previous year. Contrasting geographical trends characterized the operating environment. In Japan, economic recovery was weak. In the latter half of the year the weakening of the dollar affected Japanese exports adversely. Escalating costs for natural rubber and other raw materials undercut profitability in all principal markets throughout the year. Sales of tyres increased 2 per cent to 17.2 billion US dollars. However, operating income in the tyre segment declined 4 per cent to 1.4 billion US dollars. Sales in Europe rose 20 per cent to 2.7 billion US dollars, and operating income climbed 87 per cent to 0.14 billion US dollars, reflecting success in focusing sales on high-value products and the results of a financial restructuring in the previous year.
India has approved a proposal by Europe’s biggest tyre maker, Michelin, to pick up a 14.9 per cent stake in tyre-maker Apollo Tyres Ltd for 71.44 million Dollars. A government statement said the investment by Michelin would be used to manufacture, market and distribute truck and bus radial tyres in India. Truck and bus tyres account for more than 70 per cent of India’s 2.2-billion dollar tyre industry but less than two per cent of tyres are radials. But radials make up more than 75 percent of car tyre sales. Indian transporters have shied away from radial tyres, seeing them as not rugged enough for the appalling roads and rampant overloading in India. However, radial sales are expected to increase because of improved highway conditions.
New passenger car registrations in Europe (EU-15 + EFTA) for January 2004 amounted to 1,173,273 units, representing a decrease of 1.6 per cent (-1.6 per cent in the EU-15) with respect to January 2003. The figures for the first month of the year show a contrasting picture from country to country: in some of them, there are clear signs of recovery, while in others uncertain economic conditions continue to prevail. This is well illustrated by the figures in the five main markets. While Germany (-12.4 per cent) and France (-11.9 per cent) posted decreases, Spain (+9.2 per cent), the United Kingdom (+5.8 per cent) and Italy (+5.6 per cent) showed a positive start of the year. Overall passenger car registrations in the eight main markets among future EU Member States grew 3.5 per cent. The two main markets, Poland and Hungary, both posted an increase of 5 per cent, while the Czech Republic saw a decrease of 9.8 per cent.
Honeywell has announced that it will double its dimensionally stable polyester production in Kaiping, China, to meet growing demand for its products and services in the Asian marketplace. The added capacity will produce the latest generations of Honeywell’s DSP® fibres for tyre reinforcement and other end uses. “This is another example of our commitment to the global tyre industry and our customers worldwide,” said Greg Rogowski, General Manager, Performance Fibers. “As the only polyester fibre supplier with manufacturing facilities in Asia, Europe and North America, we continue to make investments in technology to meet the needs of our customers, wherever they are located.” The plant expansion is expected to be complete by late 2004.
Rodney O’Neal, the president of Delphi Corporation’s Dynamics, Propulsion, Thermal and Interior Sector, has been elected to the Board of Directors of The Goodyear Tire and Rubber Company. “Rodney has demonstrated outstanding leadership throughout his many business management successes at General Motors and Delphi,” said Goodyear Chairman and Chief Executive Officer Robert J. Keegan. “We are confident he will make significant contributions to our board.” In his present position, which he has held since 2003, O’Neal is also responsible for Delphi’s operations in Europe and South America and serves as executive champion for its Ford Motor Company customer team. He is a member of the Delphi Strategy Board, the company’s top internal policy-making group. The election of O’Neal brings the size of Goodyear’s board to ten members, nine of whom are independent..
Michelin signed a three-year agreement to supply Volvo Group with truck tires as original equipment on Renault and Volvo trucks assembled in Europe. The agreement confirms Michelin’s position as a major supplier of tires to the Volvo Group in Europe. The deal comes at a time when global radial truck tire production capacity is saturated, even as demand is expected to experience growth in the future. It is in line with Michelin’s commitment to balancing its operations in the original and replacement equipment markets in order to deliver optimal service quality across all markets, while maintaining its profitability.
ACEA figures for 2003 passenger car sales hardly make good reading for European car manufacturers. The only country to show significant sales increases in 2003 was Finland, with an increase of around 30,000 units. Portugal’s drop in sales though of almost 27,000 almost wipes out that gain. Despite claims in the UK of a good year for car sales, the actual figure shows only a 0.6 per cent increase. Overall the market in Western Europe shows a fall of 1.3 per. Looking at vehicle manufacturer sales the only western manufacturer to make any gains has been BMW with a meagre 1.4 per cent increase in sales, largely generated by sales of the Mini. For all the other groups it is bad news, with sales down between 1.3 and 10.2 per cent (the latter at the long ailing Fiat Group). Japanese and Korean manufacturers though can smile as sales for all bar Suzuki and Mitsubishi are all on the increase, with Nissan and Mazda performing particularly well, and Korean manufacturer Kia making an incredible comeback from the brink of extinction.
ewan.scott@77.237.250.82
If you would like the latest news from the Chinese tyre industry in Chinese, visit our partner site TyrepressChina.com. Or click below to continue on Tyrepress.
