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Plimsoll: Rich/Poor Divide Widening in UK Tyre Market

Industry analysts Plimsoll Publishing are suggesting that the brunt of the slowdown is being felt by a fifth of the companies in the UK tyre market. However surprisingly, almost half of those surveyed have been largely unaffected, maintaining their financial strength, margins and some managing to even increase sales.

Overall the market is said to be showing no growth, compared to growth of almost 7 per cent this time last year. However, 229 firms reported that they have seen their sales decline, some by as much as 13 per cent. 477 firms have seen their sales increase, some by as much as 15 per cent.

26th May 2009/by Tyrepress Editors

Beijing Auto signals interest in Opel stake

China’s Beijing Automotive Industry Corp (BAIC) has reportedly become the fourth company to express an interest in buying into Opel/General Motors’ European operations. According to the Financial Times, BAIC wrote to Commerzbank’s Dresdner Kleinwort a day after the bidding deadline. However, the report also characterised BAIC’s offer “more an expression of interest rather than a formal bid” quoting sources close to the deal. Italy’s Fiat, Canada’s Magna, and Brussels-listed RHJ International all entered bids for the strategic stake on Wednesday, for which GM is seeking about 650 million euros ($900 million).

26th May 2009/by Tyrepress Editors

Malaysia a Growth Market for Michelin

Michelin’s Malaysian operation states its local business is growing despite economic turmoil in Malaysia and abroad. The Kuala Lumpur based Business Times newspaper quotes Michelin Malaysia Sdn Bhd managing director Yves Pouliquen as saying the company’s business growth will be driven by continuous marketing activities involving its dealers and customers as well as new product launches.

“We expect 2009 to be difficult for the industry but it will be better than the 2007 level,” he told reporters at a recent media briefing in Kuala Lumpur. “Overall, 2007 was a good year while last year was fantastic for the industry.” Pouliquen also expressed his confidence that the Malaysian tyre market will continue to grow in line with positive signs of an economic recovery.

26th May 2009/by Tyrepress Editors

Conti to Buy Parts of Schaeffler?

It appears the tables have turned for Continental and Schaeffler. According to Reuters, sources with “knowledge of the matter” report Schaeffler is considering a plan to sell a large piece of its business to Conti in order to address its sizable debt. The ball bearing manufacturer is struggling with debts of close to 11 billion euros and has announced plans to reduce annual labour costs by 250 million euros – a sum equivalent to the laying off of 4,500 employees.

20th May 2009/by Tyrepress Editors

NASDAQ Chastises Hayes Lemmerz Over Late Results Publication

On 4 May 2009 Hayes Lemmerz International, Inc. received an exchange listing non-compliance letter from the Nasdaq stock exchange notifying the company that it was “no longer in compliance with the rules for continued listing according to Listing Rule 5250(c)(1),” which refers to the prompt publication of financial results. According to a statement issued by Hayes Lemmerz, the letter comes as a result of its failure to file its annual report on Form 10-K for the fiscal year ended 31 January 2009 with the US Securities and Exchange Commission. Hayes has until 3 July 2009, to submit a plan to regain compliance with Nasdaq’s continuing listing standards. The company says it expects to file its Form 10-K on or before 15 May 2009. The notification has no effect on the listing of the common stock of Hayes at the moment.

12th May 2009/by Tyrepress Editors

Yokohama Rubber Posts Net Loss in Latest Fiscal Year

Yokohama Rubber Co., Ltd., has posted a net loss of 5.7 billion yen (£38.7 million) for the financial year ended 31 March 2009, compared with net income of 21.1 billion yen (£142.6 million) in full-year 2008. This came as a result of operating income declining 61.3 per cent, to 12.8 billion yen (£87 million), on a 6.2 per cent decline in net sales, to 517.3 billion yen (£3.5 billion). The company’ s Tire Group saw operating income plummet 62 per cent, to 9.9 billion yen (£67.4 million), on a 4.8 per cent decline in sales, to 399.7 billion yen (£2.7 billion).

12th May 2009/by Tyrepress Editors

Higher and Higher

In last May’s feature on high and ultra high performance tyres, Tyres & Accessories noted the persistence of the rise in popularity for the market segment. In 2008, the trend continued apace, with some figures suggesting that the UK market share for UHP tyres was closing in on a fifth, rising from 16.9 per cent in 2007 to 19.5 per cent last year. It is fair to say that things are likely to be a little different following the financial crises experienced from the middle of 2008, though even if much of the market will be downgrading to lower performance vehicles with smaller rim sizes – as seems to be the general consensus – it is likely to be a couple of years before the market feels the changes. And while even perennially popular cars such as the Ford Focus and the Volkswagen Golf tend towards higher performance tyres, with rims not uncommonly topping 16”, perhaps there is a decent chance that the market will remain relatively stable.

8th May 2009/by Tyrepress Editors

Goodyear ‘Poised for Significant Earnings Improvement’

Goodyear Tire & Rubber Company reported first quarter 2009 sales of $3.5 billion, down from record sales of $4.9 billion in first quarter of 2008. However, Goodyear only reported net losses of $333 million, compared with Goodyear net income of $147 million (60 cents per share) in the 2008 quarter. While obviously significant the losses certainly weren’t as bad as they could have been for two reasons. Firstly, they were, according to financial news sources, ahead of mainstream analysts’ opinions; and secondly because the total losses are roughly equal to the increases in raw material costs the company experienced in the first quarter ($332 million, up 31 per cent). The explanation for greatly reduced turnover was said to be the tyre market’s sharply reduced demand at the start of 2009, however as various sources are predicting that the US market has bottomed-out and raw material prices are believed to have stabilised, Goodyear could be in for a better second half of 2009.

This view is certainly supported by Deutsche Bank analysts who sent out an investor’s note along these lines a week after Goodyear’s results were published. Despite reporting losses of $333 million in the first quarter of 2009 Deustche Bank analysts predict a short to medium term improvement in Goodyear’s financial performance: “Subtracting $1.38 billion (around $36 a tyre) of raw material costs from Goodyear’s first quarter 2009 results, and $1.33 billion ($28 per tyre) of raw materials from Goodyear’s first quarter 2008 results, we noted that GT’s non-raw material costs of goods sold declined to $1.6 billion from $2.2 billion.”

8th May 2009/by Tyrepress Editors

Automechanika Thailand 2010 Postponed

The third Automechanika Thailand scheduled for March 2010 has been postponed, apparently due to Thailand’s political situation and the effect of the global financial crisis on the automotive market. Show organisers Messe Frankfurt (HK) Ltd and Ipex (International Promotion & Exhibition Co Ltd), announced the postponement on 8 May 2009 when Stephan Buurma, managing director of Messe Frankfurt Asia Holding Ltd said: “In light of the prolonged political circumstances and the slumping automotive market affected by the current economic climate, we have opted to postpone this show. We trust that it is the best solution to all parties concerned despite the fact that previous shows were well-received by the industry. We will monitor the situation closely and reschedule the show at a more appropriate time.” cja

8th May 2009/by Tyrepress Editors

Resolution Found in Michelin Thailand Dispute

The International Federation of Chemical, Energy, Mine and General Workers’ Unions (ICEM) reports that the two-month dispute between Michelin in Thailand and rubber workers backed by ICEM affiliate Petroleum and Chemical Workers’ Federation (PCFT) has come to an end. The disagreement, which involved the company’s factory in Laem Chabang, Chonburi Province, was resolved by tripartite dialogue and, says the ICEM, its “strong intervention”, along with that of French union FCE-CFDT and Michelin’s European Works Council.

5th May 2009/by Tyrepress Editors

Hankook CEO ‘Looking Forward’ to What Lies Ahead

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.

5th May 2009/by Tyrepress Editors

Amtel-Vredestein N.V. Declared Bankrupt

Following the news that Apollo Tyres is going to buy Vredestein Banden, the district court of Almelo in the Netherlands has declared the manufacturer’s former Russian-Dutch parent company (Amtel-Vredestein N.V.) bankrupt. As a result Amtel-Vredestein has released full-year 2008 financial results that chronicle the company’s continued decline from its poor full-year 2007 results. Full-year 2008 net losses almost doubled to US$446 million, compared with $242 million. The losses came despite relatively stable annual revenue of $881 million compared with $886 million in 2007.

The financial report also sheds a little more light on the timing of Apollo’s offer for Vredestein Banden. According to the company literature, the group received a “binding offer” to acquire 100 per cent of the issued share capital from Apollo in February 2009, two months before the news that such an offer became public. By this stage the offer had long been accepted by the company’s supervisory board, a decision that was made at some point in March.

1st May 2009/by Tyrepress Editors

Trelleborg Opens Rights Issue

Trelleborg has released a prospectus for its latest rights issue. This prospectus, instructs Trelleborg, is not for release, publication or distribution in or into the US, Australia, Canada, Hong Kong or Japan. Therefore the following information is only intended for those located outside these geographic regions. According to Trelleborg’s instructions, anyone located in the above-mentioned countries or any other country imposing legal restrictions beyond those pursuant to Swedish law are not permitted to click the “more” link and read further.

1st May 2009/by Tyrepress Editors

Snap-On’s Pinchuk Takes on Third Office

The board of directors at Snap-On Incorporated have elected current company president and CEO Nicholas T. Pinchuk to the position of chairman. Pinchuk succeeds Jack D. Michaels, who is leaving the Snap-on board of upon the expiration of his term on April 23, 2009.

“We are extremely pleased to have Nick as Snap-on’s chairman, president and chief executive officer, and look forward to him continuing to build on the foundation he has laid during his past seven years with the company,” said W. Dudley Lehman, chairman of the company’s Corporate Governance & Nominating Committee. “Nick’s election as chairman is a further indication of the board’s confidence in his leadership.”

29th April 2009/by Tyrepress Editors

Auto Industry Slump “Left Scars” on Conti’s Performance

Upon announcing its first quarter 2009 results, Continental AG stated that the slump in worldwide vehicle production has “left scars” on the company’s performance, with consolidated sales dropping “sharply.” The company reports its Automotive Group sales decreased in tandem with market developments, while the decline in Rubber Group sales was much less severe as to aftermarket sector sales account for a larger percentage of business. Despite the recent undertaking of the largest cost reduction programme in the company’s history, the highly negative sales trend helped push EBIT performance into the red.

29th April 2009/by Tyrepress Editors