First Quarter Results Of Michelin Better Than Expected
Michelin’s Q1 sales rose by 14.8% to 3.59 bn Euro; 464 m Euro more than for the same period last year. The EBIT level is, as expected, in the region of 10% of turnover.
Michelin’s Q1 sales rose by 14.8% to 3.59 bn Euro; 464 m Euro more than for the same period last year. The EBIT level is, as expected, in the region of 10% of turnover.
Automotive hose manufacturers Phoenix and Goodyear Engineered Products have agreed to use each other’s factories to meet increasing demand on a global basis. Phoenix has six plants in Europe and GEP has six in North America and Mexico. The companies expect to expand the agreement to cover Asia and South America.
After procuring 26.25 percent of Beru’s shares, the Carlyle Group has now made a buyout offer. Carlyle offered 30 Euros per share but Beru has rejected this take-over attempt, which Carlyle calls. Beru management believes this undervalues the company and has quoted 40 Euros as a realistic share offer for a company worth around 500 million Euros. Some months ago Beru AG, of Ludwigsburg, Germany, acquired AMI Doduco, Europe’s leading company in tyre pressure control systems.
Since the early 90s, French tyre maker Michelin has continuously lost market share year on year in the passenger car and light truck sectors. The company used to have a 25% market share Europe-wide and this had fallen to 17% last year. According to Michelin, prices were too high vis-a-vis those of major competitors and were no longer competitive, as the end user is prepared to pay only around 10-15% more for a premium product. The necessary price cuts can only be achieved if the company is able to increase productivity. Market experts are convinced that the productivity of Bridgestone/Firestone exceeds that of Michelin by 40%. Michelin is currently undergoing a restructuring programme which will lead to the job losses – or at least early retirement – of around 10% of the European workforce over the next three or four years. Jean Michel Coulon (52), head of the passenger and light truck tyre division in Europe expressed confidence in talks with this magazine that the erosion of market share has now been halted once and for all. Coulon made it clear that he is not aiming to gain market share – his goal is to stop the erosion of market share, to implement an effective multi-brand strategy, to improve the product mix and, finally, to avoid a price war.
The division Speedline Truck supplies the major truck manufacturers in Europe and North America. In future the range will include flow-formed wheels – for trucks Speedline uses this technology exclusively, which has the effects of reduced weight and improved mechanical properties.
In the UK, the National Tyre Distributors Association and the Tyre Industry Council have given their backing to InterTyre. InterTyre is a trade exhibition, organised by the Society of Motor Manufacturers and Traders, which will run in conjunction with the European Automotive Trade Show at the end of April next year. The Tyre Industry Council is also a sponsor of Tyrexpo Europe, the rival exhibition which will take place six weeks earlier.
Kumho Tire is seeking OE business in Europe and North America. The company has announced expansion of production in Asia, for example in the Nanjing factory.
From the 1st till the 10th of December the 33rd “Essen-Motor-Show-International” opened its gates. For ten days, more than 550 exhibitors in 18 exhibition halls were showing the whole range of individual vehicle models for the world market and the broad palette of vehicle accessories. The Essen-Motor-Show enjoys the international reputation of being the biggest and most comprehensive show for automobile tuners. The tuning business is booming in Europe. Whereas the German passenger car market has decline by more than ten per cent this year, the tuning companies are reporting increasing turnovers. After 7.8 billion DM in the previous year it is expected that the eight billion DM benchmark is going to to be reached this year. But the tuning business guarantees not only high net earnings, it guarantees jobs as well. In 1999 the sector employed 18.000 people. For the car tuners the Essen-Motor-Show is traditionally the most important platform for presenting their products. The exhibitors have shown numerous world premieres in Essen. A review on this event is features in the December edition of NEUE REIFENZEITUNG.
Tenneco Automotive Europe has appointed Richard Sloan as Vice-President of the company. He is responsible for the two Tenneco brands Monroe (shock absorbers) and Walker (exhausts).
Michelin has won a five-year contract to supply trailer tyres to Transamerica Trailer Leasing (TTL) across Europe. TTL is Europe’s second-largest trailer leasing company, operating more than 21,000 trailers. The company is based in Barking, in the UK and has offices across Europe. It is owned by a Dutch bank. Michelin tyres will be specified as exclusive OE fitment on new trailers, while Michelin new and Remix tyres are being fitted to the fleet. No details of the value of the contract have been revealed, but TTL currently spends more than US$5 million on tyres annually.
The world’s number two for carbon black with plants in Europe, North America, Africa and Asia, Degussa-Hüls AG, is planning a price increase for this material necessary for the tyre production. In Europe Prices will rise 22 Euro/1.000 kg starting 15th March 2000.
Dr. Rainer Schieben, who used to be managing director of Pneumant-Reifenwerke GmbH, is now managing all associated brands under the umbrella of Goodyear-Dunlop Tires Europe BV. His successor in Fürstenwalde is Mr. M. Bald. Dr. Schieben has also been elected as Chairman of the Pneumant Supervisory Board.
Paul Harrell, the MD of Dunlop-owned retail chain Motorway, has been appointed General Manager, Retail operations UK by the Goodyear group. In his new role he will be responsible for the operations of both Motorway and Goodyear’s Hi-Q retail chain.
Since January 1999 Continental has held a 75% stake in Matador’s truck tyre production. Now rumours suggest that Continental is seeking the same deal for passenger car tyre production. There is no confirmation of this from Continental. Up until now Matador management has been keen to remain independent as far as passenger car tyre production is concerned. Matador see opportunities to develop passenger car market share throughout Europe as well as maintaining its successful position in Russia.
Dr. Paolo Masera, the current boss of Pirelli Reifenwerke, is convinced that Pirelli has every reason to look to the future as a profitable, independent tyre manufacturer. The revolutionary production method MIRS will not only make it possible for the Italian manufacturer to gain cost leadership, he believes, but the automated production process also promises a great improvement even on today’s quality. He stresses Pirelli’s role as the well-accepted technology partner of the motor manufacturing industry in Europe, supplier to Porsche, BMW, Rover, DaimlerChrysler, Ford, Volkswagen, Audi, Opel and others. Pirelli will not offer a multi-brand strategy because users are less interested in so-called cheap brands; they would rather buy first-class brands at a more favourable price. That does not exclude arrangements with larger customers for the supply of certain group house brands, e.g. Courier, if there is a call for it. The German organisation is facing a fundamental change. In future the emphasis will be more on key accounters, and so-called “channel marketing” is to be strengthened.
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