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Chinese Automotive Exports up 73 per cent

In 2004 the value of China’s automotive exports, principally of components, reached $8.156 billion (£4.4 billion). The total equates to an increase of 73 per cent over 2003. China’s automotive components imports rose 13 per cent in a year that saw vehicle production decline in the last months, according to the latest data from the Mechanical and Electrical Department of China’s Ministry of Commerce. China’s trade deficit in automotive products was reduced from the $9.737 billion of 2003 to $8.177 billion last year. Customs statistics showed that in 2004 automotive imports reached $16.333 billion, the Xinhua China Daily reported.

10th February 2005/by Tyrepress Editors

How Well Will the Russians Fare?

Manufacturers prepare for strong competition

The Russian tyre market has become more and more competitive. A market that “consumes” more than 1 million cars just 10 years after the collapse of its communist regime (2003: 1,046,000 cars) was never going to be neglected for long.
Russian manufacturers were formerly state-owned companies and because of this have a considerable amount of work to do to prepare for the Western competitors that will come to Russia with premium tyre imports, off take agreements and newly-built factories.

A bilingual supplement looks at the Russian market

5th January 2005/by Tyrepress Editors

Indonesian Tyre Production up 18 per cent

Indonesia’s car production total for the first eight months of 2004 was up 18 per cent compared with the same period last year, reported the Indonesian APBI tyre association. In addition to the production increase, which equates to 23.37 million units, APBI chairman, A Aziz Pane explained that exports also rose to $301 million in the first eight months of 2004, from $247 million in the same period the previous. Mr Pane said exports contributed more to the sales total as sales on the domestic market had been depressed with large imports of cheap second hand tyres from China.

14th December 2004/by Tyrepress Editors

Matador and ATC In Slovak-Ethiopian Joint Venture

July 2004 saw the completion of a joint venture between Slovakian tyre manufacturer Matador and the Addis Tyre Company (ATC) of Ethiopia. The initial discussions began in the year 2000 when Matador management visited Ethiopia to talk about mutual co-operation and technology transfer.

A basic agreement was signed in July 2002 between Matador, ATC and Addis Ababa and Public Enterprise Supervising Authority (PESA) to establish a joint venture with capital inputs for the production and sale of bias ply truck tyres, bias ply light truck and passenger car tyres, plus radial passenger car tyres.

Matador sees the joint venture as an opportunity to develop the Addis factory and at the same time to take advantage of reduced operating costs. The Puchov plant is scheduled to cease production of bias-ply tyres by the end of March next year, which will enable capacity to be increased in passenger and light truck radial and obviate the need for redundancies.

April this year saw the signing of the “Agreement on the Establishment of Matador-ATC Joint Venture for the Production of Tyres” at a ceremony at the Sheraton Hotel in Addis Ababa. Capital holdings in the JV are 61 per cent Matador and 39 per cent ATC. The agreement was signed by Mr Ing Stefan Rosina, president of Matador and Mr Ato Girma Biru, minister of industry and trade for the Ethiopian Federative Democratic Republic (EFDR).

The latest meeting was held in early July to launch production of the tyres and this time Matador was represented by Mr Ing Stefanom Rosinom, chairman of the board of directors of Matador and Doc. Stefan Prekop, general director. The Slovak delegation was received by the President of the EFDR, Mr Girma Wolde-Giorgisa.

President Mr Girma Wolde-Giorgisa said: “Ethiopia is the heart of the African continent and its development and prosperity depends on the increase of the technological level of industry, education, know-how and capital imports from foreign investors. I believe that the successful establishment and functioning of the Matador – ATC joint venture will become an example and a challenge for other foreign companies. I am glad that Matador has established its activities in our country” he concluded.

For Matador, Mr Ing Stefan Rosina said that the company “had found good partners in Ethiopia.” He added: “Conditions of business oriented towards the development of the domestic industry and market are good, but also conditions of export possibilities and the purchase of raw materials. I am convinced that the joint venture will achieve a good standing and importance like our joint venture in Omsk, Russia.”

3rd November 2004/by Tyrepress Editors

Michelin’s US Plants Reach Agreement

The local membership of the USWA at three US and one Canadian BFGoodrich plant have agreed new labour agreements with Michelin North America. According to Michelin, the new agreements are expected, over time, to yield a 20 per cent annual reduction in the $300 million (£166 million) yearly labour cost at the four union facilities.

After weeks of negotiations, it seems that the Michelin/United Steelworkers of America (USWA) saga could be drawing to a close. The local unions voted overwhelmingly in favour of agreeing to the deal. Of the 3400 USWA members at the three US plants, 70 per cent voted to ratify the agreement. 94 per cent of Canadian members voted to agree to a similar deal at the company’s Kitchener, Ontario plant. Both agreements expire on 22 July 2006.

The USWA sees the agreement as a victory for its members. According to the newly ratified deal, during the course of the agreement Michelin has agreed that there will be not job losses and that it will not close any of the plants. The union also believes the deal will safeguard member’s future job security as it includes an agreement to set minimum capital expenditure to $150 million (£83 million). This is designed to reposition all four plants so that they can increase their production of higher margin, larger sized, branded tyres.

“Although negotiations were long and difficult,” said John Sellers, USWA executive vice president and head of the union’s Rubber-Plastics Industry Conference (R-PIC), “our membership’s patience and determination paid off with a new agreement that preserves jobs and ensures a future for all four plants, which were endangered by foreign imports and lack of investment.
“At the same time,” Sellers said, “we also maintained our members’ living standards and preserved affordable health care for more than 9,000 retirees and surviving spouses.”

Michelin, on the other hand, sees the deal as a challenge for its North American workers. “We know it’s possible for plants to be profitable in North America,” said Jim Micali, chairman and president of Michelin North America. “We’ve been doing it successfully for many years at our Michelin-brand facilities. Now, these four facilities have the chance to step up and prove that they can become competitive with the rest of our North American operations.”

What the USWA didn’t mention was that US workers will be expected to contribute “significantly more” towards healthcare costs, and that Canadian workers will “assume responsibility” for the provincial health insurance premiums. Canadian workers will have to contribute an additional 18 cents per hour towards offsetting healthcare costs. In addition, healthcare premiums for retired US workers will increase, beginning in July 2005 and continuing until December 2006. New employees will also feel the consequences of the deal and will come under a new five-year wage progression programme which will “substantially reduce hourly pay.”

30th August 2004/by Tyrepress Editors

Goodyear Warns Against Illegal Imports

Goodyear Dunlop Tyres UK Limited has announced that it is taking further steps to combat illegal importers and to protect customers; by ensuring the right tyres are fitted to vehicles in the UK and Europe.

5th July 2004/by Tyrepress Editors

East African Community free trade threatens Firestone

The development of a free trade area by the EAC and the introduction of zero-rate tax on tractor tyres could eat into Firestone East Africa’s local market share according to local commentators. Further, a decision by the company to develop an equity retail chain is being met with resistance by the tyre trade. It is claimed that outgoing managing director Hiroshi Yamazaki had already expressed concerns that the new tariff decision by the government would severely affect the firm’s tractor tyre product line, which employs about 150 people. Sources said unless the firm improves its level of efficiency, monthly production capacities of 900 for tractor tyres and 2,500 for truck and bus tyres would fall. Even in Africa the market for light trucks and passenger vehicles has been facing heavy pricing pressures as a result of both the flooding of the local market by cheap imports and counterfeits.

6th April 2004/by Tyrepress Editors

Nokian Tyres plc Q4 improvement

The Nokian Group’s net sales and operating profit increased in Q4 with all profit centres improving their results. Net sales grew by 10.3 per cent, to 528.7 million Euro (2002: 479.2 million Euro). Operating profit was 79.1 million Euro ( 60.1 million Euro). EPS were up to 4.48 Euro ( 3.17 Euro). The Board of Directors propose a dividend equalling 35 per cent of the net profit, that is 1.56 Euro ( 1.11 Euro) per share, to be distributed.

12th February 2004/by Tyrepress Editors

India reduces duty on Chinese tyres

Indian tyre manufacturers will have to compete with tyre imports from China at much lower protection levels in 2005. The Indian Finance Ministry has formally included China in the list of countries that can avail themselves of preferential rates of Customs duty on specified products under the Bangkok Agreement. Mr D. Ravindran, Director-General of the Automotive Tyre Manufacturers’ Association (ATMA), said that the five per cent concession in Customs duty would definitely result in more imports of truck and bus tyres into India from China.

5th January 2004/by Tyrepress Editors

Ceat to increase Pirelli imports

Indian company Ceat is poised to treble imports of Pirelli radials to 15,000 tyres a month. Ceat claims a six per cent share of the radial tyre sector and is aiming to increase this to 10 per cent in the near future.

10th December 2003/by Tyrepress Editors

Big increase in Indian rubber imports for tyres

The amount of rubber imported into India by tyre manufacturers could reach 60,000 tonnes this year; higher than the original projection of 45,000 tonnes and more than double last year’s 26,000 tonnes. The tyre firms are importing through what is known as “the advance licence route”, which allows them to import rubber duty-free against exports of tyres. The companies are also said to be given 150 days’ credit for buying on the international market, while no credit is offered on the domestic market and domestic purchases incur an additional levy of 16 per cent.

29th October 2003/by Tyrepress Editors

Goodyear claims to achieve flexibility, cost goals with USWA Pact

The Goodyear Tire & Rubber Company has stated that its new labour contract with the United Steelworkers of America (USWA) meets the operational flexibility and cost-savings goals established prior to the negotiations. “Our goal for these negotiations was to achieve what some thought was impossible: a fair agreement that contributed approximately 1 billion dollars in cost savings and cost avoidance over its three-year term without a work stoppage,” said Robert J. Keegan, Goodyear chairman and chief executive officer.

23rd September 2003/by Tyrepress Editors

Proposed agreement between Goodyear and USWA

After months of protracted negotiations, the Goodyear Tire & Rubber Co. and the United Steel Workers of America (USWA) arrived at a draft agreement for a new labour contract, designed to last three years and covering 16,000 Goodyear associates in the USA.

2nd September 2003/by Tyrepress Editors

Battery market under pressure

In the past we have often commented on the similarities between the battery and tyre markets, notably in the problems faced by both and their reactions to these. One such appears to be a sharp increase in the number of batteries entering the market from the Far East. It is true that many manufacturers in the tyre industry have moved their production to low-cost countries and they are not alone – witness the recent spate of press reports revealing that more and more call centres are deserting the UK and relocating to India – so why should this not be the case for batteries? After all, if all markets are faced with the same economic realities, then is it surprising that their responses are similar?Undoubtedly, there is an element of this in the figures, but no doubt some of the increase is due to products being made by companies originally based in Asia and sold aggressively on the European market.Battery imports from Asia to the EU rose last year by five per cent, to 7.3 million units. Not far behind were imports from Eastern Europe, which were up by four per cent.Most dramatic was the performance of China, which is now Europe’s main Asian importer, with 2.4 million batteries sold in the EU last year; an increase of 38 per cent over the previous year. But it is not only China, as batteries are coming into the EU from South Korea, Indonesia and Taiwan. In the UK aftermarket, Asian battery imports now account for over 50 per cent of all UK imports.

8th July 2003/by Tyrepress Editors

Thailand bans used tyre imports

Thailand’s Commerce Ministry has said that it will impose a ban on imports of used tyres from 29th July in a bid to prevent any negative impact on the environment and human health. The ban covers imports of used tyres for passenger cars, buses, trucks, bicycles and motorcycles, including parts of tyres for these vehicles, the statement said. The ban won’t cover tyres which are attached to imported vehicles or those imported for research purposes.

12th June 2003/by Tyrepress Editors