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Green Tyres Mean Business

The tyre industry definition of a ‘green tyre’ is taking on a new meaning. Ever since tyres have been mass produced these two words have referred to the semi-finished un-vulcanised tyre product. Now the tyre industry is taking on an increasingly ecological focus and ‘green tyre thinking’ is giving retreaders the opportunity to ‘sell’ the uniquely environmental benefits they offer over and above new tyres. With this in mind, Tyres & Accessories interviewed Patrick O’Connell, director of one of the UK’s leading independent retreading operations, and learnt that retreads are not only the greenest tyres on the market, but that they make sound business sense too.

Everyone knows that retreads are greener than new tyres, but now it seems retreaders are making a concerted effort to shout about the eco-benefits of their tyres. The first step has been commissioning new research demonstrating, once again, the environmental soundness of retreads. Numerous reports have been conducted by organisations such as WRAP (Waste & Resources Action Programme) and recently Best Foot Forward, who were commissioned by the Centre for Remanufacturing and Reuse. This independent life cycle analysis was carried out to compare the relative carbon footprints of new tyres and retreaded tyres and concluded that the manufacture and distribution of a retreaded tyre results in significantly less carbon emissions than the production of a new tyre.

15th August 2008/by Tyrepress Editors

With Chinese input Prices on the Up Could there be a Retread Renaissance?

International News, Retreading

Raw material price increases affect every part of the tyre production and distribution chain. At the moment all the new tyre manufacturers (from the largest to the smallest) are feeling the raw materials pinch, which has been reflected in a run of less profitable financial reports. Even the Chinese manufacturers that were able to offer the “economic option” for so long are being forced to restructure their prices. Prior to this the low price of new Chinese made truck and bus radials had been hindering sales of quality retreads, so now that the price differential appears to swinging back against the Far Eastern budget producers, will this provide the opportunity for a resurgence in retread sales?

Take Qingdao, Shandong province-based Aufine Group Co Ltd. In August Tyres & Accessories received notification that the company was bringing in a second “unfortunate” price increase in three months, brought on by the “not small” (23 per cent) increase in Aufine’s natural rubber costs. The fact that the Chinese government clamped down on production in regions adjacent to Qingdao during the last quarter has also affected the distribution of these products. Furthermore, in addition to pressures mentioned above, the supply of Chinese tyres is also described as “inconsistent” since the pound’s value has fallen against the Euro. As a result Chinese manufacturers are increasingly ‘cherry-picking’ sales in the most lucrative international markets.

15th August 2008/by Tyrepress Editors

RMA Projects 2008 US Tyre Shipments to Decrease 4%

Tyre shipments in the US are projected to decline by nearly 4 per cent this year compared to 2007, says the Rubber Manufacturers Association. Combined OE and replacement tyre shipment for the passenger/light commercial vehicle and truck segments are anticipated to decreased by more than 12 million units to approximately 298 million, reports the RMA. Such a decline, it believes, reflects anticipated worsening domestic economic pressures for both the consumer and commercial sectors.

13th August 2008/by Tyrepress Editors

Study Reveals Tyre Safety – and In-Car Toilets – Important to Motorists

The people at Protyre were curious to know what motorists really want from their car. After all, many a man – and more than a few women – salivate after the type of hi-tech gadgetry tucked away in the latest James Bond car or those driven by the rich and famous. So Protyre conducted a survey and found that, yes, for a large number of us, the options list regulars such as air conditioning and satnav just don’t fire the imagination at new car purchasing time.

12th August 2008/by Tyrepress Editors

Indian Rubber Exports Rise 38% in April-July

India’s natural rubber exports are said to have increased 38 per cent between April and July this year, according to estimates from the country’s Rubber Board. A total of 23,998 were exported during the period as opposed to 14,816 tonnes in the same period of the previous financial year. Favourable global market conditions in July led to a total of 10,862 tonnes of natural rubber exported during this month alone.

12th August 2008/by Tyrepress Editors

Wolfrace Has Tuning Scene Covered with Latest Product

Better known in the tuning scene for its alloy wheels, Wolfrace is introducing a completely new product it says brings a welcome breath of fresh air to the market – its own branded insurance cover. The Wolfrace Insurance Scheme offers customers the most competitive rates in the UK, the company reports, and furthermore, the firm’s 37 years experience of the UK tuning market allows every policy to be individually tailored to suit the needs of each driver and take into account any vehicle modifications undertaken – without penalising the vehicle owner. Policy holders also automatically receive a set of locking bolts to protect their wheels and receive a 10 per cent discount on all Wolfrace products purchased from the wolfrace.com website.

7th August 2008/by Tyrepress Editors

Exclusive Brands Account for 11% UK Car Tyre Market

News, Product News, UK News

GfK data exclusively seen by Tyres & Accessories shows that sales of exclusive brands account for 10.4 per cent of the 2007 UK car tyre replacement market. Based on the results of GfK’s ongoing research, this means 2.62 million of these tyres were sold in the market last year. GfK defines exclusive brands from the retail perspective, meaning tyres that are only available from one clear retail network such as Kwik-Fit’s Arrowspeed brand or ATS’s Riken.

7th August 2008/by Andrew

Budget Tyre Imports Prove too Much for Australian Remoulder

Increased competition from budget imported tyres has led Australian tyre remoulder Motorway Tyres to close its doors. Staff at the company’s facility in Stawell, Victoria, were told on August 1 that the company’s facilities would cease operating, effective immediately. The decision affects 34 staff in Stawell, along with a further eight in Melbourne.

In a statement released on August 2, the company cited difficult trading conditions for the closure. Tyre imports, along with increased materials and distribution costs, were named as key factors. “Over the past three years, management has injected several million dollars into the business, to improve efficiencies in the production and distribution of remoulded tyres and truck treads,” said company director John Bresnehen. “During this time there were also significant efforts made by staff to improve the efficiency of the business.

5th August 2008/by Tyrepress Editors

Joint African Import Tax Causing Harm, Says Sameer

A shared tax threshold for imported products is hampering Sameer Africa’s efforts to expand, the Kenyan company claims. The manufacturer of the Yana brand of tyres says that the common external tariff protocol, agreed upon in 2005 by the East African Community Customs Union, has led to a flood of new and retreaded tyres from markets with lower production costs. This tax, applicable on new commercial vehicle tyres, currently stands at 10 per cent; previously tax rates between 25 and 35 per cent were employed to protect the viability of local manufacturers.

5th August 2008/by Tyrepress Editors

India’s ATMA Repeats Demand for Duty Free NR Imports

With India’s tyre industry potentially facing a severe shortage of natural rubber, the Automotive Tyre Manufacturers’ Association (ATMA) has repeated its demand for the immediate duty-free importation of 100,000 tonnes of natural rubber.

The industry, which consumes 57 per cent of India’s domestically produced natural rubber, is said to be in the midst of its worst ever raw material availability crisis. The Hindu Business Line quotes ATMA director general Rajiv Budhraja as saying during the final days of July 2008 the availability of sheet rubber to the tyre industry has been ‘woefully inadequate’. Mr. Budhraja added that, as domestic natural rubber prices are even higher than those on the international market, the commodity now accounts for 41 per cent of the tyre industry’s raw material costs.

31st July 2008/by Tyrepress Editors

Recauchutagem Northena Installs Giant Machinery

2008 has seen Portuguese retreader, Recauchutagem Northena SA, make literally huge investments in new machinery designed to retread a wide range of giant OTR tyres. The company has already installed a new MGT One63 robotic buffer, groover and peeling machine, in order to retread 63-inch tyres. Recently a large autoclave smooth and groove system for 51-inch tyres was added and before the end of the year pre-cured retreading equipment for 57-inch sizes will also be brought in.

“We’ve developed a full new approach for manufacturing cold OTR retreads. Our pre-cured tyres (a few dozen of these) have been running for a year in Portugal and Spain, and a test phase will be complete in September,” Northena representatives explained.

31st July 2008/by Tyrepress Editors

IndianOil to Establish £90m Synthetic Rubber Facility

IndianOil, the largest company in India in terms of sales and profit, intends to establish its first styrene butadiene rubber (SBR) facility. This plant, located at Panipat in the north of India and to be built at an investment price of Rs 7.61 billion (£90.55 million), will be 48 per cent owned by IndianOil. The company plans to offer two further investors respective shares of 32 per cent and 20 per cent in the 120,000 tonne per annum emulsion SBR project.

31st July 2008/by Tyrepress Editors

India’s MMTC Closer to Chinese Tyre Imports

India’s state run MMTC trading company appears to be progressing with its plan to import and market Chinese commercial vehicle tyres in India. According to reports, the company has already identified a US-based tyre manufacturer with a production site in China as the possible source of tyre imports on an ongoing basis. The initial volume order is anticipated to be placed in September or October.

The US based company has not been specifically named, however sources say the firm first entered China in 2006 and recently acquired a production facility there. The company was incorporated in 2005 through a series of mergers and also has production bases in Europe and North America.

29th July 2008/by Tyrepress Editors

DEKK Partner Seek to Exploit “Most Important” Season

Managing director of DEKK Partner, the Norwegian retail co-operative that has 300 Nordic-area dealers, Leif Kristiansen recognizes that, for his organisation “the winter market is the most important season for DEKK Partner and all tyre dealers in the Nordic market.”

In this sector, winter tyres have an obvious place, a fact Kristiansen acknowledges when he states that “50 per cent of the turnover per year is in the period from the end of September to the end of December.” This fact of the market means that the company is somewhat dependent on the seasonal weather arriving on time at the beginning of November for the business to meet its financial targets.

29th July 2008/by Tyrepress Editors

Olympic Spirit

Attending the Essen show reminds you just how much trends change. This year there was less emphasis on size and performance, and much more on green issues (see page 52 onwards of the forthcoming July edition of Tyres & Accessories for comprehensive coverage). And yet as many budget tyres are being imported from the Fast East and China as ever. Seeing as I am on the subject of Essen, take the German market for example: here the budget segment has doubled over the last decade and now holds a 31 per cent share of the summer PCR market, according to 2hm & Associates. And while the share of budget summer tyres has doubled over the past 10 years, the share of premium products has fallen to 39 per cent from 50 per cent during a decade. The same analysts put this trend down to Germany’s ageing car parc – the average age is now 8.2 years compared with 6.2 years old a decade ago. Something similar is happening in the UK market with the familiar 40:20:40 (Premium:Mid-range:Budget) boundary lines being continually blurred.

So increased demand equals increased supply from the Far East does it? That’s how it used to work. And there are certainly more radials being exported from China than ever before. Just look at the record number of radial imports into markets like India. As a direct result of this, certain segments are finding it increasingly difficult to source what they are looking for. This is the other side of the supply and demand coin.

The situation is further complicated by China’s willingness to do almost anything to strengthen its place on the global trade map through a successful Beijing Olympics – a policy that has the knock-on effect of complicating various supply chains in the process. Basically it comes down to factory output and China’s national stance on green issues: “Quick tidy up we have got visitors.” The current situation is that the government of the People’s Republic has taken draconian steps to rein-in factory emissions during the countdown to Beijing 2008. And not everyone is aware of the effect this is having on parts of the tyre market.

You see, the name ‘Beijing Olympics’ is actually something of a misnomer. In fact, the 2008 event will actually spread across large parts of China – as far as major tyre producing cities such as Qingdao (which will host the sailing events). This means some factories have had to reduce production from three-shift patterns to just one. And of course this means product output has also followed suit. The result is that some factories only have enough capacity currently available to fulfil their OE commitments and so are prioritising this above export and aftermarket sales.

Here’s one (real life) example of what this means for purchasers from the world of ply wood. Customer X places an order, but due to government restrictions the company involved cannot supply the customer with the product on time. However, despite placing the order in good faith, customer X is also facing difficulties getting his money back because the supplier is either unwilling or will only do so at the current exchange rate. This puts customer X between a rock and hard place. He either has to wait till after the Olympics to get the plywood he has already paid for, or take a hit on the foreign exchange rates. Either way he and his customers ultimately lose out from China’s bid for Olympic glory.

10th July 2008/by Tyrepress Editors