As announced in a press conference in Tokyo, car manufacturer Suzuki will supply 3,000 so called minicars a month to Nissan from 2002 onwards. With this agreement Nissan will enter the small car segment – with a maximum capacity of 660 cc – which already has a market share of 30 percent in Japan.
A report from automotive industry consultant Autopolis suggests that the Asian auto sector is half-way through “a decade of stagnation”. Sales this year will be flat and predictions for next year are for sales outside Japan to fall by 7 per cent and production to drop 8 per cent as exports decline. Chief Economist Graeme Maxton forecasts that it will take until 2005 for the market to return to 1996 levels. He says that there are some bright spots, with opportunities in China and India “but the rest of the region is just vegetating.”
In a precautionary move, Michelin is recalling 55,000 truck tyres manufactured in Italy and sold in Japan between October 1999 and March this year. There have been no accidents but a change in design to the steel cord used in the sidewall has reduced the tyres’ resistance to over-inflation that could lead to rupturing of the sidewall.
On the day when Ford is expected to announce a cut in dividend, there are press reports that the car manufacturer is contemplating legal action against Bridgestone for compensation of costs associated with the recall of tyres instigated by Ford. It is suggested that Ford has been involved in negotiations on this subject with Bridgestone in Japan, bypassing the company’s US subsidiary.
Mr Shoshi Arakawa has been appointed chairman and chief executive officer (CEO) of Bridgestone/Firestone Europe (BFE). He succeeds Mr Takeshi Uchiyama, who retires and returns to Japan after leading BFE for the last three years.
Yoichiro Kaizaki, in a circular letter to Bridgestone management, has made it clear, that the sum of up to 50 bn $ claim for damages referred to by some American attorneys is totally false. American subsidiary Bridgestone/Firestone Inc. has already made, according to Kaizaki, an initial charge of 450 million US-$ for the tire recall itself and has now pledged an additional reserve of 450 million US-$. This should be in accordance with what all involved counsels believe will be the maximum cost for the American subsidiary. There is no financial danger for Bridgestone/Firestone Inc. Obviously it is a question of American lawyers trying to increase public pressure on Bridgestone Japan with the intention of talking up the claims for damages in order to encourage an out-of-court settlement. Kaizaki has countered this by saying that from now on every baseless attempt to do this will immediately be discussed in public debate.
The UK newspaper Financial Times has published its annual list of the world’s 500 largest companies, ranked by market capitalisation. The only tyre company to appear last year was Bridgestone, at number 300. The company does not make this year’s global top 500. Among Europe’s top 500 are the following tyre companies, with their positions. Michelin (301) Pirelli (242) and Continental (479). Mention should be made too of Sabanci Holdings, the ultimate parent of Lassa/Brisa, which appears at number 331 in Europe.
A report from automotive consultants autopolis is predicting tough times ahead for most of Asia’s car markets this year, due to falling currencies, lower prices, declining exports and political uncertainty. The average fall is expected to be 7%, with markets outside Japan falling by more than 10%. For Japanese sales, a 4% decline is expected. Sales are expected to fall in most places, excluding China, with South Korean and Indian markets being particularly hard hit.
A comprehensive article in TYRES & ACCESSORIES (“We were hoping for architects, but so far we have only seen cost-cutters”) commented critically on the Goodyear acquisition of both the Dunlop activities in Europe and North America and the joint venture with Sumitomo in Japan, with all their particular opportunities and consequences. While Goodyear’s CEO Sam Gibara accepted that the facts had been reported correctly, he did not agree with much of the analysis. At the Goodyear head office in Akron, Ohio around Easter time, he gave a detailed and exclusive interview, in which he explained the reasons for, and the background to, the acquisition and the joint venture. Furthermore, Gibara was forthcoming about why cooperation with Dunlop is so important that he is even willing to accept a temporary interference in the balance sheet.
The Federation of Malaysian Manufacturers – Malaysian Tyre Manufacturers Industry Group claims that Malaysian manufactured tyres now conform to the highest international standards. Products have now been accepted in over 40 countries, including markets with strict regulations such as in Europe, Australia, US and Japan. Malaya’s four major manufacturers, DMIB Bhd, Goodyear Malaysia Bhd, Silverstone Bhd and Sime Tyres International Sdn exported over 2 million tyres in 2000.
At a press conference, Bridgestone President Shigeo Watanabe revealed that the company was to close its plant at Decatur, Illinois, where 1,500 people are employed. The plant closure will lead to a loss of $210 million, offset to some extent by cost savings of $100 million. Bridgestone will also incur an additional special loss this year, amounting to $549.6 million and the group has revised its worldwide consolidated net profit forecast from 48 billion Yen to 10 billion. For Bridgestone Japan, the company is predicting a net loss of 130 billion Yen for the calendar year 2001, the first loss for the group since it was first listed on the Tokyo Stock Exchange in 1961. Bridgestone’s shares fell nearly 2 per cent on the news, to stand at 1,273 Yen.
An Arizona-based panel of experts assembled by an attorney acting against Firestone has stated that Firestone tyres made in Japan are more durable than those made in America. The ATX tyres manufactured in Japan are claimed to carry thicker layers of key rubber materials, which prevents damaging cracks from appearing. Firestone denied the claim, admitting differences in production but not in durability, the company added that the findings ” are not based on scientific analysis but on anecdotes and unsupported theories.
Malaysian tyre manufacturer Simex Aircraft Tyre Company has signed an agreement to supply Boeing with radial tyres for the 777. Although Simex began aircraft tyre production in 1975, this will be the first time that the company has made radial aircraft tyres and production will begin next year. Simex has named Sumitomo Rubber Industries of Japan as its technical partner in the two-year deal.
Michelin has released sales and market details for the year 2000. Consolidated net sales rose 11.9% to 15.396 bn Euro (1999: 13.763 bn). Growth in the 4th quarter was slower than the previous nine months. For the year, European V/Z car tyre sales rose 41.6% in a market which grew by 13.3%. European truck tyre sales rose 1.7% in a flat market. In the USA, 4×4 and light truck sales rose 27.7%. Financial results will be made public on 27 February.
Continental and Japanese tyre manufacturer Yokohama, who already operate a plant together in the USA, producing truck tyres, want to intensify this cooperation. They want to create a 50-50 joint venture in Japan by the end of the year, merging their Japanese activities and focussing on their Japanese OE customers. Yokohama will also help Continental increase its replacement market business. In addition, the two companies want to work more closely together in production in the NAFTA area and are looking at potential synergies, in areas such as purchasing.
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