Lord Marshall of Knightsbridge has been named as non-executive Chairman of the Boards of Pirelli UK plc, Pirelli General plc and Pirelli UK Tyres Ltd., effective September 1st. Lord Colin Marshall is currently Chairman of British Airways and is also a member of the Board of HSBC Holdings, Chairman of the International Advisory Board of the CBI and Chairman of Britain In Europe.
Ford of Europe, which two months ago lowered its second-half-year production target by 80,000 vehicles, has announced that it will increase its fourth quarter production by 40,000 vehicles. This is in anticipation of an increase in demand later in the year and the introduction of new marketing programs to stimulate demand even further.
Ford of Europe, which two months ago lowered its second-half-year production target by 80,000 vehicles, has announced that it will increase its fourth quarter production by 40,000 vehicles. This is in anticipation of an increase in demand later in the year and the introduction of new marketing programs to stimulate demand even further.
Martin Leach (46), appointed as president and COO of Ford of Europe a year ago, has resigned “to pursue new opportunities”, says the company. This follows publication of Ford Europe’s second quarter figures, which show that the car manufacturer made a 2Q pretax loss of $525 million (462 m Euro). Leach’s job will be carried out by David Thursfield, president of international operations and chairman and chief executive of Ford of Europe, until a replacement is found.
The EU is planning legislation to significantly reduce (by 25 per cent) the amount of fluorinated greenhouse gases in a range of products by 2010. One of the worst greenhouse gases is sulphur hexafluoride, which is present in tyres, and which has a greenhouse effect 23,900 times that of carbon dioxide. Should the proposals become law, any EU country not meeting the standards could face sanctions and non-EU countries wanting to export goods that do not comply with the standards into Europe would be prevented from doing so.
The Nordic Market is very different from the highly developed mass markets of the UK or Germany – both of which are recognised as the most highly developed markets in Europe. The Nordic market might be considered to cover essentially Norway, Sweden and Finland, and possibly Denmark – depending upon your point of view or your business strategy. In any of these countries logistics would give most typical regional wholesalers nightmares. In the case of the three northern countries deliveries are hampered by long distances, less developed road networks, and for around half the year, bad weather conditions – not to mention fjords and ferries in Norway. Denmark, being more densely populated and considerably less mountainous has a better transport system, but also relies heavily on ferries between the islands that make up much of the country.
Leif Kristiansen has a long history in the tyre trade and in 1993 was working with Vianor when he saw the need for a tyre retailer group that not only served as a buying point for tyres, but as a much wider partnership aimed at helping the independent tyre retailer compete in a market increasingly dominated by equities.
Leif Kristiansen says, “Dekk Partner is owned by the members, each with one share so that there is no controlling member. That is very important. There are no suppliers involved in the group and no producer can buy shares. We want Dekk Partner to be fully independent.
“Our members are free to buy and sell what they want from whoever they wish but we do have a loyalty rebate scheme for our members that encourages them to buy within the group. It is highly successful. With respect to the suppliers, there are none with a contract any longer than two years. So irrespective of the brand or the manufacturer, we work on two year contracts to keep the standard of service provided as high as possible.”
When we contacted a number of tyre manufacturers to obtain information for this feature, we received a number of reactions along the lines of “Winter tyres? There’s not much call for them in the UK.” Some companies had to contact their mainland European offices for product details and the situation is neatly summed up by the fact that, if you want Michelin’s latest high speed winter tyre in the UK, it has to be ordered specially.
Perhaps this is not that surprising, as there is a shortage of winter tyres in mainland Europe, caused by the long winter which went on into March this year. One estimate is that winter tyre inventories are now around 15 per cent below normal, at six million units.
But the UK winter tyre market is minimal, mainly because we have light snowfalls over much of the country. However, you do not need snow for a winter tyre to be effective and to improve driver safety. The main supporter of this view is the head of Vredestein UK, Bert Stellinga. When he first came to the UK, he declared himself amazed at the tiny size of the UK winter tyre market and it is his ambition to see this grow.
If they are not designed for snow, then why fit winter tyres? The simple answer is that, when it is cold and wet – which, let’s face it, is more typical winter weather than snow – a winter tyre performs better than a summer version. Research showed that, in these conditions, braking distances were significantly shorter for winter-shod vehicles. The figure that you will see mentioned throughout the articles in this feature is +7ºC; below this, winter tyres outperform summer tyres.
Vredestein wanted to enhance winter tyre sales, so the company joined forces with a medium-sized car leasing company and the Euromaster chain of tyre retailers. The leasing company was looking at ways to differentiate itself from the herd and, after being convinced by a series of braking tests that stopping distances were indeed shorter on winter tyres (and by analysing accident statistics and finding that more happened in the winter) it came on board.
Says Bert Stellinga: “Back in 1995, winter tyres accounted for half of one per cent of Dutch tyre sales and, by the end of 2002, it was up to around seven per cent” he remembers. If we accept the rough figure of 25 million tyres in the UK replacement tyre market, then seven per cent equates to 1.75 million tyres, which is a figure that should be of interest to the manufacturers and to the tyre dealers too.
The Trelleborg Group has signed an agreement with Smiths Group Plc of the UK to acquire its operations in polymer-based precision seals (Polymer Sealing Solutions – PSS). PSS has annual sales of approximately SEK 5.5 billion (599.37 million Euro) and some 6,000 employees, mainly in Europe and North America. Following the acquisition, the annual sales of the Trelleborg Group are expected to total SEK 22.5 billion (2.45 bn Euro), with approximately 21,000 employees in some 40 countries. The acquired operations will form a new business area within the Trelleborg Group.
Kwik-Fit Fleet has won a five-year solus contract, worth 30 million Pounds, to supply tyres to Motability Operations, which operates Europe’s largest vehicle fleet of 400,000 vehicles. Motability customers will have 24-hour access to a dedicated Kwik-Fit team via a single, local rate phone number.
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.
Bandag, Incorporated has reported consolidated net income of $8.7 million, or $0.45 per diluted share for second quarter 2003, compared to second quarter 2002 consolidated net income of $11.7 million, or $0.57 per diluted share, a decrease of 26% and 21% for consolidated net income and diluted earnings per share, respectively. Second quarter 2003 results were reduced by approximately $2.2 million due to net foreign exchange losses. Second quarter 2003 results were also reduced by approximately $1.5 million in net charges related to Bandag’s distribution subsidiary, Tire Distribution Systems, Inc. (TDS), for store divestitures and a real estate impairment charge. Consolidated net sales for second quarter 2003 were $204.1 million, a decline of approximately 12%, compared to consolidated net sales of $231.1 million in the prior year period.
In the past we have often commented on the similarities between the battery and tyre markets, notably in the problems faced by both and their reactions to these. One such appears to be a sharp increase in the number of batteries entering the market from the Far East. It is true that many manufacturers in the tyre industry have moved their production to low-cost countries and they are not alone – witness the recent spate of press reports revealing that more and more call centres are deserting the UK and relocating to India – so why should this not be the case for batteries? After all, if all markets are faced with the same economic realities, then is it surprising that their responses are similar? Undoubtedly, there is an element of this in the figures, but no doubt some of the increase is due to products being made by companies originally based in Asia and sold aggressively on the European market. Battery imports from Asia to the EU rose last year by five per cent, to 7.3 million units. Not far behind were imports from Eastern Europe, which were up by four per cent. Most dramatic was the performance of China, which is now Europe’s main Asian importer, with 2.4 million batteries sold in the EU last year; an increase of 38 per cent over the previous year. But it is not only China, as batteries are coming into the EU from South Korea, Indonesia and Taiwan. In the UK aftermarket, Asian battery imports now account for over 50 per cent of all UK imports.
The Bologna trade fair centre was host to the 20th Autopromotec exhibition. There is little doubt that Autopromotec has become one of the most important trade shows in Europe for automotive equipment, machinery and services for the transport industry. This is borne out by the ever-increasing number of exhibiting companies. This year, there were 936 exhibitors, 662 from Italy, 184 from the EU and a further 90 from other nations. These were located in 12 halls, covering an area of 80,500 square metres, plus 3 outside demonstration areas of 10,500 square metres. In real terms, this is only a slight increase over the previous show in 2001, in terms of participation. During its five-day run 83,850 trade visitors attended Autopromotec, a small rise over 2001. Of this number, 13,464 were from abroad, which was a 5.5 percent improvement. What was significant was the visit by a record 21 official foreign trade delegations specialising in strategic markets within the automotive industry.
T&A attended the 15th Slovak Rubber Conference to find out what made it so popular with the delegates. As rubber conferences go the topics of conversation can be a source of stunned amazement to the layperson. The idea that people gather from across the continent, or indeed the globe, to discuss the rubber industry is beyond their understanding. If you tell them that the conference is in Paris or Hamburg, they smile knowingly. They understand, they believe, that it is a couple of days of high living on company expenses under the guise of a trade conference. Tell them that the event is in Puchov, in the Slovak Republic and their knowing smile turns to sheer incredulity. Where, they ask, is Puchov? And why would anyone go there? The where is Slovakia, close to the Czech border and the home of Matador. As to why anyone would go there, that may be because the Slovak Rubber Conference is an event of growing interest. The fact that some 200 delegates paid for the privilege of attending suggests that the event has a value beyond a night out sampling Parisian or Hamburg nightlife. Delegates came largely from Eastern Europe and the CIS, but also from the UK, Italy, Finland, Netherlands, Germany and doubtless several other nations. More than one delegate told T&A that the background of the event was of interest. It was generated by the Slovak Rubber Institute supported by Matador. The conference, although a flag flying exercise by Matador, was less commercialised than most others and the emphasis is on technology and business developments rather than an extended sales event – though needless to say some of the presenters and delegates had indeed something to sell. That lack of commercialism left delegates free to discuss the subject matter, make contacts and seek out technological partnerships, rather than face a barrage of sales talk from commission paid representatives. Indeed, one presenter made a rather obvious sales pitch that was greeted with some dismay by the organisers – this was not what they has intended, though inevitably commercialism will penetrate any successful event. The conference was opened by Stefan Rosina Jnr, who has stepped into the position of President of Matador upon the retiral of his father, Stephan Rosina Snr. He highlighted and thanked the delegates for their support of the 15th Slovak Rubber Conference. An event, he said, that represented a coming together of experts from the rubber industry with a growing global importance. It was relevant that this was the penultimate conference prior to European Union entry and he touched on the positive and negative impacts of EU entry both to Slovakia and to other states about to join the EU. “Most of the effects will be positive,” he felt assured, “There would be an access to markets, to technology and the reduction of trade barriers.” For the Conference he could envisage it reaching a wider audience once Slovakia was a member of a wider European Union. This should give the conference an even greater stance in the rubber industry. ”The negative effect though was one that posed a real threat to the industries of the new states. It made acquisition by larger foreign investors more of a possibility, but more immediately it could create a flow of qualified engineers to the West – drawn there by higher salaries, better conditions and a higher living standard. However, ultimately even that negative could be turned into a positive if these skilled engineers were to return in later years with a wider experience and greater skills base.”
European and US car manufacturers are catching up with their Japanese counterparts in Europe in terms of productivity. Toyota, Honda and Nissan averaged 87.5 cars per worker, in a report issued by the World Markets Research Centre – the European average is 58.6 cars/worker. But the gap is narrowing; Europe-based Japanese companies improved productivity by 5.4 per cent last year, while the improvement average for non-Japanese European manufacturers was 7 per cent.
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