Toyota is launching a joint venture with First Automotive Works, China’s biggest car manufacturer, to make luxury sedans, SUVs and cheaper, smaller cars in China for the local market. The target is to sell up to 400,000 vehicles a year by 2010 and an unconfirmed report suggests that the investment will total 1.29 billion Euros.
Nokian’s shares have risen 12 per cent over the past three months and, for the year as a whole, have risen slightly against an 11 per cent general decline in the auto and component sector. The Finish company traditionally makes the lion’s share of profits in the second six months of the year, because of winter tyre sales, plus Nokian has announced a joint venture in Russia and its RoadSnoop tyre pressure monitoring system has great potential. Despite all this, analysts Morgan Stanley have downgraded the company from “Equalweight” to “Underweight”. The reasons for this caution are 1. A worry that the winter tyre market may not be as good as expected, due to large stocks. 2. The high level of investment needed and time scale of the Russian JV. 3. The high level of investment in retail expansion which has yet to show returns.
Finnish company Nokian Tyres and Amtel Holding of Russia have signed a letter of intent to form a joint venture company to manufacture and market premium branded tyres in Russia and CIS countries. The JV – owned 50/50 by the two companies – will produce Nokian and Nordman branded tyres. The first Nokian tyres will be manufactured at the JV’s plant at Voronezh in 2004 and the maximum capacity of three million tyres is planned to be achieved by 2007. Investment in new manufacturing facilities will total US$ 110 million, with a first year investment of 38 million.
Hyundai is considering a joint venture with DaimlerChrysler, said president Kim Dong-jin, and will make a decision by October. DCX would pay US$ 418.5 million in cash and Hyundai would offer its Jeonju plant as part of the j.v. If the deal gets approval, it could go ahead from January next year.
Yokohama has increased its share of the joint venture company Hangzhou Yokohama Tire Co Ltd. From 45 to 80 per cent. The other two shareholders, YHI Holdings Pte. Ltd and Hangzhou Rubber (Group) Co. each have 10 per cent of the holdings. At the AGM in March seven out of nine directors were already appointed from Yokohama. Production of Yokohama radial car tyres in China will begin in May 2003 with the construction of a tyre plant with a capacity of 750,000 units per annum. This will be increased in time to 1.5 million units.
Superior Industries International has reported that net income for the first quarter of 2002 has exceeded analyst expectations with revenue and shipments reaching record highs. For the first quarter 2002 net income increased by 7.6 per cent or 0.65 dollars per diluted share. Shipments of aluminium wheels increased by 16 per cent bringing revenue for the first quarter to 186,532,000 dollars, a record for the company and a 12.3 per cent increase on the same quarter for 2001. The results include the write off on non-recurring start up costs of 1.653 million dollars in respect of the launch of the new aluminium suspension parts operation. The joint venture wheel manufacturing operation in Hungary also posts profitable results.
Yokohama Rubber Company Limited has taken majority possession of its Hangzhou Yokohama Tire Company Limited joint venture in Hangzhou, China. Just two weeks in advance of the ground-breaking for the venture’s radial tire plant, scheduled for 22nd April, 2002.
Yokohama Rubber and Continental AG have confirmed a contract for the creation of a joint venture to supply original equipment to Japanese motor manufacturers and to develop Continental in the Japanese replacement market. The 50/50 joint venture will be called Yokohama Continental Tire and will aim to sell OE tyres to Japanese and Korean vehicle manufacturers. Importation and distribution of Continental tyres, to be sold through Yokohama outlets in Japan, will begin in April.
Hayes Lemmerz has decided to close two North American plants, one producing steel wheels, another producing aluminium wheels. The aluminium wheel plant is at Somerset, Kentucky (formerly Alumitech), which the world’s largest wheel manufacturer only took over in 1998 from a 50/50 joint venture. The Somerset plant manufactured mainly one-piece cast wheels for the Mercedes M-class. In future the Hayes Lemmerz factory in Hoboken (Belgium) and Ronal’s factory in Mexico will supply the M-Class with aluminium wheels.
Hayes Lemmerz International announced the sale of its non-core System Service business to Schedl Automotive System Service Beteiligungsgesellschaft mbH & Co. Verwaltungs-KG, in Germany. Terms of the transaction were not disclosed. Hayes Lemmerz acquired the System Service business in 1997 in connection with the acquisition of Lemmerz Holding GmbH. The business has approximately 250 employees and operates five tire and wheel assembly operations, one of which is a 49% joint venture (51% Continental in Portugal). These facilities are located in Belgium, Germany, the Czech Republic and Portugal.
Only two years after the joint venture, the company has launched the “TM 900 High Power”, the latest generation of radial tyres ideal for equipping high power tractors over 250 HP, and those requiring high load capacity. Furthermore the company is going to launch the first Trelleborg radial implement tyre in Hanover, which is the result of the technological synergy between the two brands. At the same time the Trelleborg “TM2000” is being shown; the new generation of radial tyres for combine harvesters, created using Pirelli’s considerable agricultural experience.
ContiTechFluid, the business unit of tyre producer’s subsidiary ContiTech, has recently purchased 51 percent of shares of Chinese hose producer Grand Ocean (Chang Chun). From January 2002 the 100 employees will produce parts for VW models Jetta and Bora and the Audi A6. The project in the north of China requires an investment by ContiTech of up to five million euro.
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.
Continental Teves plans a joint venture with the Shanghai Automotive Brake Company (SABC) – subject to the approval of the Chinese authorities. The aim is to provide the market with a complete brake systems package from one source. SABC already manufactures Continental Teves brake components under license, and produces components for both Volkswagen and General Motors.
The new Cadillac Roadster in North America will be introduced with PAX as original equipment. Audi is also interested in using PAX, Michelin boss Edouard Michelin revealed in an interview with Modern Tire Dealer. The joint venture with Goodyear has proved to be very efficient in the development of PAX.
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