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.
Beleaguered Pacific Dunlop is expected to announce job cuts in a restructuring of its joint venture tyre division. It is also expected that Pacific Dunlop will announce plans to withdraw from the tyre venture, leaving Goodyear the controlling influence in the business. This comes as the group is about to release its latest profit figures which are expected to show a collapse in the performance of the tyre joint venture, Southern Pacific Tyres. Pacific Dunlop CEO, Tony Daniels, has so far declined to comment, other than to say that the JV partners were committed to manufacturing in Victoria, Australia.
China Tire Holdings Ltd and Orion Tire Corp’s Lawsuit against Goodyear has been sent back to the federal court by the 9th Circuit Court of Appeals. This revives a long-standing battle over China’s grant of a joint venture plant to Goodyear. The claimants say that Goodyear unlawfully persuaded a state-owned factory to abandon a contract with China Tire. China Tire alleges that Goodyear gave gifts, including jewellery, scholarships and travel to Chinese officials. The case though may face early dismissal if China Tire do not present adequate new pleadings.
The first edition of a newsletter from Eurofleet has appeared. This is a joint venture between the large German tyre dealer group Team-Reifen-Union and Bandag. Eurofleet plans to create a complete network of 400 service providers in 2,000 different locations and will focus on large European fleets.
Pacific Dunlop Chairman John Ralph told shareholders at the company’s AGM that joint venture company South Pacific Tyres could return to a break even position by the end of the financial year. Earlier this year, 890 jobs were lost at SPT as the company restructured in a bid to cut losses, blamed on an influx of cheap tyres from overseas.
In the UK, Dunlop and Goodyear have decided to combine their administration offices to increase the effectiveness of the joint venture. The offices – and a new distribution centre – will be in Birmingham, preferably at Fort Dunlop. The Wolverhampton offices will eventually be closed, but production at Wolverhampton will not be affected. The two sales divisions will function independently, even though they will operate from the same location. The move will be completed over the next 12 months.
Watts Industrial Tyres (WIT), the UK market leader for industrial tyres, has signed a joint venture agreement with its Brazilian distributor to manufacture and distribute Watts brand solid tyres in Brazil. The company is ‘Souza Pinto Industria e Comercio de Artefatos de Borracha Ltda.’ and production begins this month at a new factory near Sao Paolo.
Samir G. Gibara (61), chairman and chief executive officer of The Goodyear Tire & Rubber Company, has been elected to the board of directors of Sumitomo Rubber Industries Ltd. in Kobe, Japan. Gibara’s election is in conjunction with Goodyear’s 10 percent ownership of SRI, following the companies’ global alliance, completed in September 1999. This ownership makes Goodyear SRI’s second-largest shareholder. SRI holds 1.4 percent of Goodyear’s common stock.
Sumitomo Electric Industries, Denso Corporation, Aisin Seiki and Toyota have announced a joint venture to share technology in a brake development and sales operation. Aisin Seiko will hold 40% of share, each of the other contributors taking 20% each. The new products will address requirements of ABS, Vehicle Stability Control, and the need for regenerative brake systems in hybrid and electric vehicles. Operations are due to begin in October 2001 with a sales target of 250 billion yen in 2005.
Even before the dramatic changes in the worldwide economy after September 11th, the retreading business, as well as its suppliers, was facing hard times. Reduced demand, increased competition and price pressure characterised the depressed market. It was not unusual for material suppliers to experience a decrease in their third quarter results of around 20 percent. Uncertainty, pessimism and negative forecasts represented the collective mood in wide areas of the business. But Kraiburg, the Geretsberg (Austria)-based retreading supplier, is swimming against the stream and reports stable economic results and new strategic activities to meet future market challenges. Kraiburg’s turnover in 2001, up till end October, is just half a percent below the company’s performance for the first ten months last year. In addition, an agreement for a joint venture with the Bulgarian company Zebra was finalised in October. Since 1997 the Sofia based company Zebra has produced thin and light tread patterns which would have been uneconomic to produce in Austria. Kraiburg has invested around one million Euro in Zebra’s tread pattern production and 95 percent of the joint venture shares belong to Kraiburg. Within the next two years the Bulgarian production will be increased from 800 to 1,800 tons per year – using the same machinery and equipment.
There are reports that Michelin is on the verge of forming a joint venture with Chinese tyre maker Shanghai Huayi Group Corporation (SHGC). Michelin would not comment, but SHGC has been quoted locally as saying that the deal has been done and is waiting formal government approval.
The Australian Conglomerate, Pacific Dunlop Ltd., cannot reach its income figure from 1998 of A$ 188m. In the first half of 1999 the company reached a net income of A$74.5m compared with A$ 101.7 million for the first six half of 1998.
ContiTech Air Spring Systems, a business unit of Continental AG’s ContiTech group, announced a “Letter of Intent” for founding a joint venture company with South Korean company Dae Won Kang to build up a plant for producing complete air spring systems. Dae Won Kang’s market share in this field in Korea is nearly 100 per cent.
Despite excellent results and an on-going buy recommendation from Deutsche Bank, Continental shares are not rising. The management has announced that the “intelligent tyre” is to be fitted as OE from 2003 but refuses to name the car manufacturer. The management also feeds speculation regarding a joint venture partner for brakes in Asia. Will this help the share price to rise?
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