Tesco, the largest retailer in the UK and third largest globally, is to continue its long term agreement with Bandvulc Tyres, the Devon-based commercial tyre manager and retreader. Bandvulc’s tyre management facility, BTC, manages all of the commercial tyre requirements of Tesco Distribution, Fuel and Northern Ireland operations, making it one of the largest non-transport fleets in Europe.
Assuming stable share, Michelin’s second quarter tyre sales volume is expected to be inline with analysts’ earlier estimates of a drop of 18 per cent. However, Michelin’s monthly tyre market data, which has become something of barometer in the current unstable market conditions, shows that the leading French tyre manufacture is performing better than analysts had expected. In an investor’s note entitled ‘Punctured but still rolling” Morgan Stanley described the company’s recent performance as “slightly better than our expectations, after adjusting for an average two fewer selling days across Europe.” Year-on-year growth rates remain negative, but the pace of the decline is considered to be “more on track to meet or exceed [forecasted] tyre sales to dealers.”
As a result of the fact that tyre prices are positively correlated with both volume and input costs, Morgan Stanley suggested manufacturers remain under pressure to cut prices: “Investors must prepare for a reasonable level of price ‘give back’ to struggling tyre dealers, distributors and consumers in this environment…We believe depressed volumes and the tailwinds from lower raw material that will materialize in the second half will continue to put at risk the pricing discipline – and the profitability – of the industry.”
European truck tyre OE sales reportedly fell an enormous 74 per cent in April, while replacement tyre volumes were down 44 per cent. The figures, which are sourced from leading tyre manufacturer Michelin, show that most global markets are affected (China aside). As far as truck tyre sales are concerned, the good news is that everyone’s best guess is that this segment cannot remain under this “particular pressure” forever and that there is still a good chance of improvement, or at least a slowing in the downward trend in time for the second half of 2009.
A traditional “kagami-biraki” sake barrel breaking ceremony attended by more than a hundred guests and a guided factory tour has marked the official opening of Bridgestone’s new 200 million truck and bus radial facility in Stargard, northwest Poland. Senior company management including Bridgestone Corporation CEO Shoshi Arakawa and Bridgestone Europe CEO Toru Tsuda presided over the May 18 events and played host to numerous local, regional and national officials such as Mrs Grazyna Henclewska, Undersecretary of State in the Ministry of Economy, Mr. Tanabe, Japan’s Ambassador to Poland and Mr. Husejko, Marshal of West Pomerania.
Hot on the heels of OE reports from Michelin and Pirelli is news that Continental has especially adapted its ContiSportContact 3 for the Porsche Panamera. Conti states the new sports saloon will be launched with its tyres, tweaked to match the car’s chassis and particular specifications. This limited series of Porsche specific tyres will display the designation ‘N0’ after the product name as a point of difference from the standard ContiSportContact 3.
The Panamera’s front wheels will be fitted with size 255/45 ZR 19 (100Y) tyres while the rear will wear size 285/40 ZR 19 (103Y). The alternative sizes 245/50 ZR 18 (100Y) and 275/45 ZR 18 (103Y) have also been approved by Porsche for the Panamera and also carry the special designation ‘N0’.
Continental has announced the launch of its new range of commercial vehicle regional and long distance tyres. The manufacturer has called the launch its “biggest for ten years”, representing four new design features for the second generation of steer and drive tyres, joining the HTR 2, which has been on the market for about a year. The tyres feature entirely new inner liner technology, dubbed AirKeep for its ability to stay inflated for longer, in addition to modifications to the belt, bead and contour design.
Conti is backing up its new range with a “Technology Truck” tour throughout Europe, including a visit to the UK in June, to showcase the range to fleet managers and dealers, as well as providing a new electronic tool, based on research conducted by Continental and certified by DEKRA, which calculates the economic and ecological benefits of fitting the new range to customers’ fleets: the ContiCostCalculator. The series 2 regional and long distance tyres will be available initially in the following sizes: Regional HSR 2 (steer) and HDR 2 (drive) – 295/80R22.5, 315/80R22.5, 315/70R22.5; HTR 2 (trailer) – 385/65R22.5, 445/65R22.5. Long-Distance HSL 2 (steer) and HDL 2 (drive) – 295/60R22.5, 315/60R22.5. The HTL 1 series trailer tyre is still available in sizes 385/55R22.5, 385/55R19.5 and 445/45R19.5.
Apollo’s vice chairman Neeraj Kanwar was quoted today as saying “We are looking at closing this deal [to acquire Vredestein Banden] in the next few days,” a new press release indicates. Indian manufacturer Apollo Tyres expects to acquire Dutch sector player Vredestein Banden for an undisclosed sum soon, according to Dow Jones. The company’s board gave the green light to the buyout, which is part of Apollo’s strategy to expand its presence in Europe, on 30 April.
Vredestein Banden is fully owned by tyre producer Amtel-Vredestein NV. The company went into bankruptcy last month, but its unit Vredestein Banden and its European subsidiaries, which have separate financing arrangements, remained unaffected.
According to reports, Dow Chemical Company has said that its Dow Europe GmbH (Dow) subsidiary is “exploring divestiture options for its synthetic rubber business.” No further details or timeframe have been released at this stage, however, the move is being seen as part of the company’s ongoing work to streamline its portfolio of businesses. Dow’s Synthetic Rubber business produces and distributes synthetic rubbers. The business is located in central Germany and includes five production plants and a research centre in city of Schkopau.
Volkswagen has become the recipient of Hankook’s first-ever OE delivery to a European vehicle manufacturer from its Dunaujvaros factory. The supply of Hungarian produced tyres to Volkswagen Nutzfahrzeuge in Hanover, Germany is taking place under an agreement to fit the Hankook product as original equipment on Volkswagen’s Transporter, Caravelle, Multivan and California van models.
Europe’s largest automobile manufacturer is kitting out the fifth generation of its “T5” van family with the size 215/65 R16C version of Hankook’s new Radial RA 28. Hankook describes the tyre to be fitted as a “specially balanced tyre perfectly suited to the variety of uses of such vehicles”, and notes it is exclusively supplied to Volkswagen in Germany.
In reporting Rhodia’s first quarter 2009 results, company chairman and CEO Jean-Pierre Clamadieu has reflected upon a difficult three-month period. “As anticipated, we faced in the first quarter unprecedented low levels of demand,” said Clamadieu. “This, combined with the absorption of costly raw material inventories, resulted in a major adverse impact on profitability.”
Hankook Tire reports that effective cost management and initial signs of a reviving market have helped it recover from negative territory in the previous financial quarter to post sales of KRW 1.1346 trillion (£599.7 million) in the first quarter of 2009. This result, 13.8 per cent up on a year earlier, is supplemented by operating profits of KRT 35.3 billion (£18.6 million), despite the market remaining, in Hankook’s words, a “challenging” one.
During the first quarter exports from Korea rose 7.3 per cent year-on-year, with export demand showing a 19.9 per cent increase to North America and 8.9 per cent to Europe from a year earlier. The company also states that its Hungarian plant, the main production facility for the European market, has seen a “significant” 24.7 per cent growth in sales from the final quarter of 2008 and an 87.0 per cent increase from a year earlier.
Continental is also making changes outside of its tyre business – the company has announced plans to end vehicle hose and pipe production in its Industrias del Caucho site facility in Spain to two existing Hungarian facilities, Vác and Makó. Machinery from the Spanish factory has already been installed in Hungary, and further equipment will be added later in the year.
The management of Cooper Tire Europe has offered “its sincere apologies to anyone who was affected”, after a camera was found in the men’s toilet by employees. The Wiltshire Times reports that the camera “was installed by a maintenance contractor at the request of a Cooper Tires manager,” who suspected employees of substance abuse. The Unite Union representative John McGookin told the paper that he has discussed the incident with company management, saying, “This was somebody’s misguided approach to a concern. It’s something we have asked that the company ensures does not happen again.”
A Cooper statement said that, “Following an extensive, independent investigation into the discovery of a camera in a toilet, it has been established that:-
1. Although there was suspicion of substance abuse on site, the decision to position a camera in a toilet was unacceptable
2. The company has a policy to deal with suspected substance abuse and this was not followed
3. The camera equipment was not made operational
4. Although the motives were genuine, as the company treats substance abuse seriously, this was a major error of judgement and therefore disciplinary action has been taken against those responsible
5. Procedures are being changed to ensure that such an incident cannot be repeated in future”
Cooper Tire & Rubber Company Europe has released a statement announcing its plan to cut 30-50 jobs at its Melksham, Wiltshire plant, amounting to around 4 per cent of the company’s workers there. The manufacturer will invite its 1,000 employees at the site to apply for voluntary redundancy throughout May. The statement cites the reduction of costs necessary to remain competitive within its markets as the reason for the cuts.
TRW has extended its vehicle spare parts line-up with the introduction of a shock absorber range. This addition to its “TRW PrOEquip” line-up, on the market in Europe since March 2009, offers coverage for 94 per cent of the European truck market. Manufacturers covered by the TRW PrOEquip range include BPW, DAF, Evobus, Fruehauf, Hendrickson, Iveco, Kässbohrer, MAN, Mercedes, Neoplan, ROR, RVI, SAF, Scania, Schmitz Cargobull, Van Hool and Volvo.
Brakes, steering and suspension products are already included in the TRW PrOEquip range and therefore the addition of shock absorbers is a logical development. The products are manufactured in the company’s European aftermarket factories.
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