Giti Tire
Standard & Poor’s Ratings Services said it has affirmed Giti Tire’s “B+” long-term corporate credit rating with a “negative” outlook, based upon the company’s weak financials going into 2009. It also affirmed Giti’s “B-” foreign-currency issue rating on the company’s unsecured notes. Furthermore, Standard & Poor’s says all Giti’s ratings have been removed from CreditWatch, where they had been placed with “negative implications” in September.
Reifen China, unlike the long-established Reifen show in Essen, Germany, is an annual event. Therefore, a sequel to the show’s successful 2007 debut is already due. Between December 4 and 6, 2008, the Shanghai New International Expo Centre (SNIEC) will again be filled with the aroma of the round objects and the buzz of deals being made. Tyres & Accessories plans to be there, and we’ll be far from lonely…
With manufacturers of trucks in Western Europe finding market conditions tough, tyre-makers with a large interest in the Truck segment have to contend with the decreased demand for OE-supply alongside the well-documented problems of increased raw material costs and the struggle to sell to the replacement market.
The replacement sector too, is hurt by fleets continually looking to make savings, for which cutting the cost of tyres is too often high on the agenda. Rather than allowing fleet-based customers to diminish their overheads through decreasing the rate at which they replace tyres, or buying cheaper alternatives, major European manufacturers – such as Michelin and Pirelli – are ramping up their efforts to attract business to their all-encompassing fleet servicing products, in addition to focusing in earnest on their operations in emerging truck markets, such as Brazil, where the replacement and, to a lesser extent, the OE markets are remaining strong.
GiTi Tire is looking to increase its market presence in the truck tyre segment by implementing a TBR service network. The company has since 2006 built up a comprehensive truck and bus tyre product portfolio incorporating two premium quality brands – GT Radial and Primewell – both of which have been QS9000, ISO9001 and TS16949 accredited and are specifically designed and manufactured to meet the ever-changing demands of today’s European commercial vehicle operators. The entire TBR range is carefully selected to ensure the correct pattern is available for each application: regional, long haul, mixed service or municipal. In fact, such is the growth of the company’s sales presence in both TBR and PCR that two strategic business units have been formed to cope with the demand.
Reiff Reifen operates a state of the art retreading facility in the German town of Reutlingen. This Bandag franchise operation retreads in excess of 40,000 truck tyres each year, all of which are subjected to strict quality control measures. All casings are inspected with a SDS shearography machine that can detect any minor internal separation, and all inspection data is recorded on the company’s mainframe. Tyre building is performed using a Bandag-AZ builder extruder and curing is carried out in four completely new installed Bandag electrical autoclaves. Reiff operates to ISO 9000 standard and contracts TÜV Automotive in Munich to endurance test its retreaded tyres to confirm compliance with ECE 109 regulation requirements.
GiTi Tire is to hold a secondary share offering at the Hong Kong stock exchange. According to IIR Group Ltd, the issue is expected to raise between 3.1 and 3.9 billion Hong Kong dollars (US$400 million – US$500 million) and will be managed by Credit Suisse and UBS.
GITI Tire is attempting to improve its foothold on the European winter market, building upon the Champiro range. The company, which is headquartered in Shanghai, China, is a self-styled top quality tyre supplier, and is the largest manufacturer in the booming tyre-producing nation. GITI accesses the European market through its sales and marketing office in The Netherlands.
The Champiro WT-Plus is a high-performance winter tyre for the premium passenger car sector, offering a full silica compound for optimal wet traction and a reduced rolling resistance. The company stresses the additional benefits, which include a directional tread design complete with variable shoulder blocks to increase cornering traction and stability, helping drivers achieve a quiet and comfortable drive; a circumferential centre rib providing optimum stiffness resulting in precise handling in all winter road conditions; and an advanced sipe design, which aids braking and traction properties on ice and snow, thus placing the WT-Plus within the sector addressing harsh winter conditions. The company is clearly confident in the Champiro’s ability to tackle competition in this segment, as it is increasing size options to cover 14 inches to 16 inches; from 185/70 R14 right through to 205/55 R16.
Giti Tire reportedly is planning to launch a US$400 million to $500 million Initial Public Offering (IPO) on the Hong Stock Exchange during 2008. The Reuters news service has published an article, saying that ‘sources with knowledge of the deal’ indicate such an offering may take place sooner rather that later. “We hope that the deal can be launched as soon as June,” one of the sources said, while another source did not report a fixed timeframe.
Giti Tire is said to have originally planned to launch a Hong Kong IPO in 2004, but later postponed the deal.
GITI Tire Europe staff characterised the company’s CV show presence as the UK-debut of the manufacturer’s electronic fleet management system. However, it also forms part of a wider programme of increased market visibility, culminating in investment in another show stand at the key Reifen show in Essen, Germany later this month.
When, towards the end of 2007, GITI Tire booked its stand for this year’s CV show, company representatives told Tyres & Accessories that GITI Europe has invested a “significant amount” in publicising the company’s ever-increasing range of truck and bus tyres at the show. The decision to place the booth right opposite the Michelin and ATS Euromaster stands, and a short walk from the Continental and Bridgestone spaces certainly did not go unnoticed. And while every company T&A spoke to had a handful of reasons why they shouldn’t fear any new competition, it is clear that many were surprised at the range and depth of the programme the Chinese manufacturer had on offer.
A greater presence in this part of the world is planned for GITI Tire, as comments made by GITI Europe marketing manager Peter Foulkes regarding May’s Reifen exhibition testify: “GITI intend to use their presence at the show to officially launch and take forward to the next progressive stage, the company’s growing sales presence in Europe (including the UK and Ireland).” Mr. Foulkes adds that, at the show, GITI plans to show off a number of products not yet seen here, including a new asymmetric ultra high performance tyre – the Champiro HPY.
And while we must await the Essen show for further details on this new product, GITI is already well established as a manufacturer of performance tyres. The company reports it is continuing to expand its position within the UHP sector of the market, and now offers more than 80 sizes, with many further additions in the final stages of development.
The Tires & Rubber show was unmistakably a genuine tyre trade show, despite its appearance as an event mainly attracting machinery and raw material suppliers. Among the 197 exhibitors at the show, which took place in Moscow from March 4-7, 2008, were only a handful of tyre manufacturers – but plenty of resellers, importers and wholesalers. And most of these companies are only interested in the distribution of tyre brands produced outside of Russia, i.e. in China, Korea or Europe.
Together with Russian importers such as Petromaster (Hankook, Sumo Firenza), Avantek (Alliance), Satim (Mitas) or Yarshintorg (Sumitomo), TransGaz Komplektatciya presented itself to visitors of the Moscow Tires & Rubber show and featured the “Primewell” brand. This brand is produced by Giti Tire in China and TransGaz is initially importing only truck tyres from this range. Later, however, Giti’s new importer in Russia will also import and distribute Primewell and Runway passenger car tyres. Runway is yet another brand from the GT group (Giti Tire from China and Gajah Tunggal from Indonesia). To what extent, if at all, TransGaz will play a major role with regards to importing the group’s core “GT Radial” tyre brand has yet to be decided, says Richard Lyons, sales director with Giti Tire Europe and thus responsible for the Russian tyre market, in an interview with Tyres & Accessories.
GITI Tire Europe’s decision to take a stand of its own at Reifen 2008 points to the company’s strategy of being known as a leading supplier in its own right. In previous shows the company has been represented by its German distributor – Reifen Gundlach but for the very first time GITI Europe will be staging its own impressive presence at the event. The GITI Europe stand will cover 220 square metres, around 70 per cent complete will be GITI-branded, with the remaining 30 per cent of space being taken by Reifen Gundlach.
European Marketing Manager, Peter Foulkes commented: “GITI intend to use their presence at the show to officially launch and take forward to the next progressive stage, the company’s growing sales presence in Europe (including the UK and Ireland).”
Giti Tire Europe is to debut the technology behind its Giti Assist pan-European breakdown service during April’s CV Show. Sales director Richard Lyons told Tyres & Accessories that the company will be showing its web-based fleet management system and hand-held data collection technology at the show, plus giving visitors the opportunity to learn more about the details of the pan-European service it is now offering in conjunction with Tymacon. In addition, the manufacturer will exhibit its Giti-branded nitrogren inflation system on the 54 square metre stand (Hall 8-141).
Giti Tire is a company with ambitious plans – in December company director Dr. Enki Tan told Tyres & Accessories that Giti intends to penetrate the European and US markets faster than any tyre manufacturer has ever done so before. To reach this ambitious goal the company is in the process of adding an additional 10 million units a year capacity to its facility in China’s Anhui province.
Giti Tire claims to now offer 4×4 drivers a wide range of tyres to suit their driving style and the type of terrain on which they drive. Amongst the comprehensive Giti 4×4 range is the UHP GT Champiro 528 for 4×4 vehicles. This line-up has been exclusively designed for the luxury and sports SUV sector and covers 15 popular sizes, all V speed rated. The tyre features a directional tread pattern that Giti describes as “aggressive.”
In 2007 Giti Tire acted as co-sponsor for the ‘Great Turtle Race’, an international sea conservation event designed to raise awareness of and funds for the endangered leatherneck turtle. This year the tyremaker’s support for green causes continues, and Giti Tire recently announced it is donating $1 million for conservation projects in Indonesia’s northern Sumatra region and the mountains of southwest China as part of an agreement with Conservation International.
The program will protect the habitat of threatened species such as the Sumatran orang-utan in Indonesia and pandas in southwest China through the replanting of forest areas. Giti reports that, during the first year, the investment will offset the corporation’s overall 2008 carbon emissions.
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