Whether its raw materials, machinery, research and development or the latest manufacturing trends, this tag provides up-to-the-minute insights into the upstream part of the tyre industry.
A new capital support programme has been launched by WRAP (the Waste & Resources Action Programme) aimed at creating new reprocessing infrastructure for used tyres. The capital programme will provide financial support towards the costs of plant, equipment and infrastructure for projects in the UK in order to increase recycling of used tyres into value added markets, including re-treading facilities.
Held alongside the popular commercial vehicle and automotive trade shows, the tyre and fast fit industry’s biggest night of the year was no let down. There were some (pleasant) surprises when the award winners were announced; NTDA chairman, John Tarbox, pulled no punches when it came to delivering his speech; and celebrity former-MP (and world record holding after dinner speaker), Gyles Brandeth entertained the 500 invited guests with his razor sharp wit. But without any further ado here are the 2006 Tyre and Fast Fit Award Winners:
Goodyear Dunlop UK had a particularly good night in the eyes of the 5000 NTDA members that voted, winning both the Product Innovation Award and the Industry Advertising Award (presented in association with Tyres & Accessories). Both awards related to the company’s RunOnFlat technology and followed the company’s large-scale investment in raising awareness of the product. Last month, Goodyear announced that the group had produced its 4 millionth RunOnFlat tyre, claiming market leadership in this growing sector. In gaining the advertising award Goodyear beat off particularly strong opposition from Kumho Tyre (UK), Sapphire Energy Recovery, Viking International, BITS and Vipal.
“We are proud to receive this award from the NTDA, as they represent our trade customers, dealers and distributors. Our research tells us that this campaign has been very successful in communicating the advantages of RunOnFlat to drivers, and we are delighted that it has been received so well by the tyre industry,” commented marketing director, Neil Burrows.
C-Tyres Ltd won the 2006 Environmental Award, giving the environmentally-friendly credentials of retreaders a major boost. It was the first time that C-Tyres have won the award since the company started trading in 2002, manufacturing the Colway and Greenway brands of retreaded tyres. Managing director, Gary Oliver commented: “We are absolutely delighted to have won this award and would like to thanks all members of the NTDA who voted for us. We are particularly pleased, not only for us, but for retreaders across the UK, because we believe this award reflects the tyre industry’s recognition of the fact that retreading is at the forefront of tyre recycling.”
Continued Oliver: “The award emphasises our growing status as a comprehensive manufacturer of retreaded tyres. Although C-Tyres has perhaps traditionally been recognised as a car tyre retreader, we have invested heavily in other sectors to develop customer recognition in those areas.” Recent product range developments by C-Tyres include the Major Hi-Miler range of high mileage truck retreads, several new 4×4 and medium truck tyre sizes and the very recent development of a new range of Colway-branded run-flat tyres.
For the seventh time, BITS was named National Wholesaler of the Year. Speaking on behalf of the business Brian Duguid said he was simply “surprised” that the company had won once again, and added: “We have a wonderful team and will continue to put customer relationships at the forefront.”
Regional Wholesaler of the Year went to North Eastern Tyre & Exhausts Ltd. It is the third time NETE has received the regional wholesaler award. In response to winning the award managing director Ian Darcy commented: “To receive this award two years out of the three since it began is some achievement for a company that started life in an old railway yard in Yorkshire by my late father Fred Darcy and my mother Netta. Although I must stress this award is testimony of the hard work, dedication and passion that the people at North Eastern have for both their company, their customers and the industry.”
Rema Tip Top UK Ltd won Tyre & Aftermarket Equipment Supplier of the Year. This was the fourth time in six years, Rema Tip Top had achieved the title. Cliff Jones and Martin Blakey of Rema Tip Top received the prestigious award from Mark Lovett of Renault UK Vans, the awards sponsors. Afterwards, Cliff Jones acknowledged the award, paying tribute to the efforts of the team at Rema Tip Top for their continued success and role in regaining a title which they always take immense pleasure in winning.
The were cheers as Michelin Tyre plc was named Tyre Manufacturer of the Year 2006. The award was collected by Michelin Tyre plc managing director and new Tyre Industry federation chairman, Jim Rickard.
Continental Tyre Group managing director received the NTDA Chairman’s Award, recognising his “meritorious service” to tyre industry. The award is given at the discretion of the chairman. This year was the first time a tyre manufacturer has ever received the honour. John Tarbox, chairman of the NTDA commented: “Presenting the chairman’s award is always an enjoyable task, particularly this year as Brian Smith is such a worthy recipient. Every industry needs leadership and people prepared to work for the wider good. Brian’s support on initiatives such as 3mm and cold weather tyres has been much appreciated by the NTDA and the industry as a whole.”
Brian Smith has worked in the automotive industry for 35 years. As managing director of Continental Tyre Group for over 12 of those, Smith has been an enthusiastic proponent of many industry initiatives including campaigning for better training across the board, educating on cold weather tyres, and campaigning on the safety benefits of changing tyres at 3mm. For 10 years he has led the Tyre Industry Council, helping to develop the roadside tyre check programme, acknowledged as one of the major road safety events in the UK and Northern Ireland. He was also President of the BRMA in 1997/1998.
Incidentally the TIC is soon to change its name to the Tyre Safety Council. “We wish it well,” John Tarbox added referring to the association’s name change.
The chairman’s speech
NTDA chairman John Tarbox opened his speech by recounting the highlights of the association’s year. In the past 12 months the NTDA has expanded its membership to “embrace most of the equities and we are pleased to be able to truly represent tyre retailers, both large and small, in all the areas which impact on your business,” John Tarbox said. He was, of course referring to Central Tyres and ATS Euromasters’ decision to rejoin the association after seven years. The addition of Central Tyres’ roughly 70 centres, ATSE’s more than 500 outlets and 18 new independent members mean NTDA membership now stands at a record 2141 tyre distributors throughout the UK.
The chairman then remarked on the negative effects of the VOSA MOT system failure situation (see page three of May’s T&A for more on this), suggesting that affected retailers should make thorough claims for compensation.
When the spotlight was switched on to run-flat tyres, the gloves were off as far as NTDA chairman, John Tarbox was concerned. “We work in a business which is at the leading edge of technology, I don’t need to tell anyone here just how versatile and important to our safety tyres are and with the latest developments in the world of run flats that technology is moving to new heights. However the launch of these new products onto the market has posed special problems for tyre retailers.”
No manufacturer was left out when it came to criticising the corporate approach to run-flats: “Our problem is with the inconsistency of advice. One manufacturer allows repairing in their run flats in the US, but not in the UK. Another says that repairing, as long as there is no evidence of damage, is perfectly OK. Others ban repairing worldwide. Indeed BMW say in their handbooks that you must not repair run flats. [Furthermore] the statement by the BTMA and TIC falls well short of giving definitive advice. ‘We do not recommend it however you must contact each manufacturers for advice.’ This is a totally unacceptable situation. Our members look to us for help in such situations, and until the industry gets it act together, we will be exposing our industry to accusations of profiteering and worse.”
“We are very frustrated by the lack of information provided by our suppliers and despite our constant protestations things do not seem to be improving. Indeed we approached all UK manufacturers through the BTMA and asked for speakers for a series of seminars we are hoping to run throughout the country on run flats. So far we have had no offers of speakers. I find it hard to understand why manufacturers would not welcome the opportunity of talking about their products to their customers, it won’t cost you anything and we do all the organisation of the event – am I missing something here?”
The case of one manufacturer was seen as particularly disappointing. “Here’s another example of poor communication,” John Tarbox explained: “At the last meeting of my region we discussed the new RAV 4, which has tyres that at present can only be changed by Toyota dealerships. How does it look for a motorist to be told that a tyre specialist cannot change a tyre because it needs special equipment? Another strong argument for closer working relationships between the tyre and car manufacturers and the tyre specialist – that is of course if the car manufacturers want to maintain vibrant tyre specialist network.”
Then there was news of developments within the various industry associations: “During the year the NTDA has joined together with all the other associations operating within the UK tyre industry to form a truly representative Tyre Industry Federation,” Tarbox commented: “I am pleased to say that the federation, with our direct help, will be developing a road map for training for our sector through a working group administered by the NTDA.”
Tarbox welcomed the formation of the TIF, but warned that the “we cannot be complacent” and “we must not allow it to become a talking shop.” “We all appreciate the need for both manufacturers and distributors to work together and the early signs are that there is a willingness, on both sides, to do just that. We will be watching closely the way the Federation develops and we will not be taking anything for granted. Congratulations to Jim Rickard on being appointed the first chairman of the TIF. Jim, you can rest assured that the NTDA will play an active role in making it a success, however, that success must be measurable,” he added.
Another project that will no doubt be of great interest to anyone whose working life is spent studying the development of the tyre market, is the work of the expanded Tyre Market Study group. According to the NTDA chairman, “for an industry of our size the lack of meaningful market information is nonsensical.” As a result we can look forward to seeing “proper market information on both the sell in and sell out markets” at some point in the future.
Next year’s dinner will be held in the Palace Hotel, Manchester, alongside the Brityrex Exhibition. Once again the NTDA AGM and the presentation of the 2007 TAFF Awards will be held in parallel with this event.
Yokohama Rubber Co., Ltd., has announced that it will increase its bias tyre production capacity for motorcycles and light trucks in Vietnam by 2.5 times. For this, the company will begin constructing a new tyre plant in June of this year production set to start in June 2007. Yokohama Rubber plans to invest a total of 1 billion yen (7 million euros) in this construction programme.
European Tyre and Rubber Manufacturers have held the first meeting of the newly formed European Tyre & Rubber Manufacturers’ Association or ETRMA. The new association will replace BLIC (Bureau de Liaison des Industries du Caoutchouc). Francesco Gori of Pirelli was elected as president, and Groupe Michelin’s Eric de CromiÈres Michelin was named vice president. Fazilet Cinaralp was appointed secretary general.
Continental Sime Tyre Sdn Bhd is targeting to raise its output of passenger car tyres to 5.5 million by the middle of 2007, up from last year’s 3.5 million units. The company, a 70:30 merger between Continental AG and Sime Darby Bhd, said it is attempting to increase production at its Alor Star factory to 4.5 million tyres by the end of this year and move passenger tyre manufacturing to Alor Star as well.
(Akron/Tire Review) There is one P225/50R17 Michelin Pilot HX MXM4 that will never see the open road – the 200 millionth tyre produced at Michelin North America’s (MNA) Greenville, S.C., US1 plant last week. And Richard Simmons, the man who helped build the plant’s very first tyre – a BR78R13 – in 1975, was on hand to help produce that landmark radial. According to MNA, some 100 employees at the plant have been at US1 since day one.
Continental Tire North America will stop tyre production at its Charlotte plant in July, earlier than its previously announced date of September, because of “worsening business conditions,” local news sources have reported
Under this plan, the company will lay off more than 700 workers between this Friday and July. Previously, Continental had said it would cut 172 workers Friday, 50 in June and 478 in September. The company plans to shift production to its non-union plant in Mount Vernon, Illinois, and to its factories in Mexico and Brazil.
The market for cast aluminium wheels is reaching saturation point. While the low-volume, image focused brands are defending their territory in a crumbling segment, the mid-price segment has almost disappeared. At the same time, while the low-price segment may continue to move significant volumes of wheels, branding is to a large extent interchangeable.
Alloy wheels may still be most common tuning part, but that’s just it. Being the most frequently upgraded part means that it loses its exclusivity. Cast aluminium wheels have become a commodity and in some cases are already cheaper than steel wheels.
The exceptions are two or three piece and particularly large-dimensioned wheels. Sizes referred to as tuning sizes have continued to go up. 17 inch is no longer a rarity, so 18 inch and above is where the more focussed volumes can be found. In combination with an expensive tyre, prices can be expected to reach what one might pay for quite a tidy used car. Nevertheless, there is still an exclusive clientele to which these high-value products can be marketed.
In this quantity-limited segment, competition is to a large extent limited to names that hold high levels of brand equity. Other selling points are technological features such as multi-piece design, cavities or flow-forming for weight minimisation, special high polish coatings (chrome or “like-chrome,” high gloss, nano-technology) as well as the forging procedure.
Forged wheels have been around for almost four decades now and first appeared on the Porsche 911, the “baroque wheel” for Mercedes (another forged product) followed and should also be regarded as a classic.
Despite the obvious product advantages regarding weight, compared with cast wheels, the particularly elegant appearance of the conventional forged wheel means it generally only appears on premium brands vehicles like: Audi A8, BMW 5 and 7 series, Aston Martin Vanquish, Mercedes S-class and Maybach. But these wheels are expensive and so in order to make them accessible to owners of less expensive vehicles German company Otto Fuchs invented the light-weight forged wheel. This became a sales success in the original equipment market particularly with the Audi (A3 to A8) because it was used as a “basis wheel” and was not so expensive for the wheel manufacturer. The BMW 3-series, Mercedes E-class and the extremely weight-optimized wheels for Volkswagen’s Lupo 3L and Audi A2 should also be mentioned.
Light weight forged wheels do not play much of a part in the replacement market, but have circulated the segment as part of the spare market. Similarly the conventionally forged wheel has yet to gain a strong foothold on the market and continues in something of a niche existence.
This is due to the fact that the few companies that offer this kind of product are generally priced out of the market. But that is not to say that these products are not worth the money – producing forged wheels requires more investment and is much more expensive than wheels manufactured using the casting procedure.
Forged wheels are produced using a set of forging and/or transforming roll pressing measures. So-called “forgeable alloys” of aluminium (such as AIMgSi1) are also necessary, as opposed to the conventional AlSi7Mg and AlSi11 alloys that cast wheel producers use.
The time is ripe
Coming from the technical side of the business, Peter-Werner Frischkorn is aware of the inherent difficulties associated with communicating the superior characteristics of forged wheels over cast products.
The outstanding surface quality with production-immanent, blowhole-less and nonporous structures in combination with high gloss polishing or alternatively chrome plating is obvious, there must one only place a painted wheel beside.
The weight advantages are also clear and easy to demonstrate – a 17-inch wheel, for example, is around 40 lighter. You only have to lift both wheel types side by side to see, something that means the products continue to be “sellable.”
That’s why Frischkorn and partners founded XTRA Wheels AG, based in Germany, to ensure that these products would continue to be offered in the future. Frischkorn is not interested in competing with the cheaper cast aluminium wheel market. But exclusive technology at a reasonable price should be able to find a place in the market. In other words the strategy is to compete in the premium segment at the lower end of the pricing bracket.
However the company founder is aware of his brand’s main weakness, currently brand awareness of the XTRA name is near zero in the trade and that certainly has to change. To do this Frischkorn has called on the experience of well-known wheelman, Jens Klausdeinken, to be XTRA’s face in the market.
Salesmen might describe it use a wheel’s multi-piece design as selling point, but it can also be a negative characteristic. Frischkorn: “Saying that multipiece wheels offer a price advantage due to the changeability of the ring is absurd in view of the fact that the price for a new ring is on a similar level to the low-priced aluminium cast wheel.” In order to ensure availability, the newly created XTRA team has already rented a warehouse.
Co-shareholder Peter-Werner Frischkorn will be the chief executive officer, since the owners decided to form the business as a public company. The names of the supervisory board members – Yam Hong Stephen Tsui and Yam Ming Tsui – betray, who the partners are. The Tsui brothers are from Hong Kong and have their own (currently not represented in Europe) aluminium casting wheel brand (Gacosia) and cooperate very closely with up-and-coming enterprise China Wheel.
China Wheel was a minor shareholder at the forged wheel manufacturer FullChamp Technologies Co. Ltd. headquartered in the Chu Shan industrial estate in Taiwan. But, as China Wheel president Derek Zhang told Tyres & Accessories, the company already has the right to distribute FullChamp wheels. In the meantime China Wheel had bought its Taiwanese partner.
FullChamp is a relatively young company, which was founded in the summer of 2002 by Mike Wie. Since then the company’s turnover has soared to double digit millions of euros. It should be pointed out that the business, which employees 150 people, also produces other forged products in addition to wheels. However wheels remain core business for the company. The fact that FullChamp has a current annual capacity in the region of 150,000 means that even at this early stage the company has an amazing product range.
In addition to passenger car forgings, truck, motorcycle and even ATV and go-kart wheels are forged. Manufacturing volume can be developed up to 25,000 per month relatively problem free, reports Zhang. But that would mean doubling current capacity. For this push to take place, amongst other things, XTRA will have to take care that all FullChamp manufactured forged wheels are exclusively for the aftermarket.
In answer to the question of why a cast wheel manufacturer like China Wheel wants to market forged wheels, Frischkorn answers: “Our Chinese partners think strategically and on a long-term basis. If we do a good job as a marketing company and are able to establish the brand reasonably, then China Wheel will have a way into Europe to sell its cast wheels through the structures we establish.” This provides the opportunity for a second line brand that could be placed alongside or below XTRA. “However these are purely ideas,” Peter-Werner Frischkorn adds.
And at the moment they cannot materialise. China Wheel currently is running at full capacity in order to serve the US aftermarket. This outstanding export market demands approximately 90 per cent of the company’s production. In fact the company can hardly satisfy all inquiries.
Zhang estimates his company’s share of the US Wheel aftermarket to be more than 20 per cent. And he believes his company has not yet exhausted its potential. The wheels “made in China” are branded with the names of the companies US partners it has off-take agreements with.
And this is a business model that Derek Zhang can imagine being established also in Europe on a mid or long-term basis – the low-priced but quality orientated producer working together with a locally based team with the necessary market knowledge. And so project XTRA begins.
The huge Republic of China is an automotive growth market par excellence. And that applies to the automobile manufacturers as well as their suppliers. The country is not only at the centre of low-price manufacturing for “the rest of the world,” but has also become an enormous sales market in its own right. The cluster of cities in the east of the country is home to millions upon millions of inhabitants and the streetscape is shaped by the sight of premium segment cars and their upper middle class owners. These cities also have well-developed road systems. Rush-hour traffic jams are another familiar sight for anyone used to driving in western metropolises – and that’s despite the numerous additional lanes alongside just as numerous skyscrapers.
Today more than 7 million people live in Shenzen, for example. 20 years ago it was 30,000. These “drawing board” cities provide living space for people who no longer want to share and, in fact, are more likely to be in a position to impact the world economy.
The Chinese aluminium wheel industry is relatively young because the automotive world is similarly young. It has developed in parallel with the Chinese automarket and so consequently has exploded, but this growth was also the intention of the ruling communist party.
China Wheel is not a state enterprise, but rather belongs to the numerous businesses, which are either former state-run companies that have since been privatised or private sector businesses that were formed in capitalist countries. The owners are Patrick Tse (60 per cent, chairman) and his partner Derek Zhang (40 per cent, CEO). And the company is the sort of size that leads one to believe that the next step is to the stock exchange.
The company is built upon a complicated network of participants each holding majority or minority shares, technical consultant Peter-Werner Frischkorn explains. He spends the majority of his time working in China for China Wheel, and has done so for years, and there are still many details of this arrangement that he is not privy to.
China Wheel was involved in the Taiwanese wheel manufacturer FullChamp – a very small share, says Derek Zhang, from which XTRA Wheels (a recently formed German sales company) gets its exclusive forged wheels. “However all rights to distribute these wheels belong to us,” said China Wheels president, smiling. Only a few days later FullChamp also belonged to China Wheel.
From zero to market power in half a decade
China Wheel was founded by Patrick Tse (Xie Jianting in Chinese) and Derek Zhang (Zhang Xinying) in June 2001. Tse is without doubt a businessman. His focus is on ways of making as much money as possible in the shortest time, according to his employees, not to mention the man himself. Tse has been chairman of Huanan Motor Industry and also of the Huatian Group since 1994.
Zhang is a wheel man through and through and his thinking revolves around wheels, wheels an more wheels. In 1989 he joined state-owned Zhongnan Aluminium Alloy Wheel. In 1998 he was appointed managing director of Nanjing Xinning Aluminum Wheel and had decided shortly after “to do his own thing.”
The alliance of the “money man” Tse and the “wheel man” Zhang seems to have come at the right time and a visit to the stock exchange looks a likely course of action in the future. In addition to its core business China Wheel owns various “edge activities” including car dealerships and other non-wheel forging and casting operations.
And the reason for the joint entry into the wheel business? Neither one had the money or the time to build-up their own factory alone, according to Zhang. But there must have been enough money, in order for them to buy several factories one after the other.
Today the group owns three full-scale aluminium casting wheel plants and four chromium-plating factories. In 2005 the company’s manufacturing capacity totalled 2.6 million units annually, this is expected to rise to 3.5 million in 2006. Meanwhile its chromium plating capacity (based on US company Atotech’s technology) was 945,000 units across its four plants.
At present China Wheel employs more than 2,000 people, 2,200 including administration and development staff (approximately 50 engineers). In terms of quantity this makes China Wheel the fourth biggest in China. As far as turnover is concerned, the enterprise is one of three fighting for second position (see Chinese market box).
Overwhelming sales development
In 2001 China Wheel turned over 3 million euros. The following year this increased tenfold, in 2003 it doubled again (reaching 60 million euro). By 2004 annual turnover was approximately 110 million euros, with as much as 150 million in 2005.
Now Derek Zhang talks about entering a period of consolidation, but this certainly doesn’t mean that any expansion plans will be interrupted. Instead he is simply referring to the fact that doubling turnover within a year is no longer possible for the company. China Wheel is also quite profitable and about seven per cent of its turnover flows back into new technology and product development each year.
And product development is something that happens at an almost incomprehensible rate. Since the establishment of the company, more than 1000 new wheel designs have been created, with nearly 3000 moulds. True, some of the designs can only be seen in North America and others have disappeared because it was decided they were too ‘playful’ even for there. But with a target of creating two new designs each day, some flops have to be expected.
The difference to western companies, says PW Frischkorn, is that the decision makers do not have a long time to consider and examine each concept. If Zhang or one of his designers has a new idea promising only moderate success, then it proceeds to the next stage of development.
At present China Wheel is the only Chinese wheel manufacturer capable of producing 26 or 28-inch wheels. In fact, the large wheel American Racing presented in 2003 (fitted with a Kumho tyre) was not manufactured by the Americans, but by its production partner China Wheel. Meanwhile the size record has since gone to a three-piece 10×30 inch wheel presented by Lexani/USA. However, this highly polished product has special chromium plating, which was built, according to our information in Taiwan and fitted with a Hankook tyre.
However (large) size isn’t everything. China Wheel also makes 8-inch wheels for golf caddies. In either case, China Wheel has one target, to present itself as a premium manufacturer of premium products.
The company has already succeeded to some extent in the US. Here the wheels it produces are not branded with its own name or one of the two house brands (Gacosia and Finn), but rather AR and/or American Racing, Dakota, Racing Motegi, Wheel Pros, Giovanna etc. The management has a different approach to other Chinese enterprises, the CEO stresses. His company sees further than price alone and also understands flexibility – an essential quality for an aftermarket-focused business – not to mention quality, without which the necessary reputation cannot be established.
Derek Zhang can imagine similar alliances in Europe China Wheel already produces Momo brand wheels which were previously produced in Italy by Fomb. What works in America may also work in Europe using a similar off-take model. Why shouldn’t an established Italian or German sales company capitalise on the benefits of working with a quality producer like China Wheel?
In America the door was wide open for China Wheel because the domestic aftermarket wheel manufacturers had very old-fashioned plants. In Europe Zhang recognizes that wheel manufacturers have shifted towards Eastern Europe, but he believes that the day will come when these locations will also prove not to be competitive. In this scenario the Chinese producers like China Wheel, Liufeng and others will have the upper hand.
Zhang reports that his company is open to the possibility of making foreign acquisitions or entering into a joint-venture with a sales business, says European wheel manufacturers may also make interesting acquisitions. Company data implies that this could mean the acquisition of a company that is already active in the wheel business, if there was the right opportunity.
Entering the OE business in the company’s existing form would not be the highest priority for Derek Zhang, something that is based on the fact that he sells the company’s current production levels without any problems in the US. China Wheel has a market share of more than 20 per cent in the US, according to Zhang’s estimates, because of the numerous brands that are produced in China. There is also sufficient demand for the further capacity that the company is planning.
Zhang nevertheless brings up the subject of working OE production in partnership with another company “perhaps in three to five years.” Zhang recognizes the high standards in the original equipment field and is not interested in getting involved in a price war simply in order to increase his company’s OE market share.
Currently 90 per cent of the wheels produced by China Wheel are exports to the US, with the remaining 10 per cent are divided between Europe, Japan, Australia and the Middle East.
In terms of technology, China Wheel already has the same equipment that is used by others in the OE business.
China Wheel has, for example, acquired casting automats and processing machines that were previously used by Opel, Skoda and other manufacturers, not to mention a modern Eisenmann painting plant, which was acquired within the framework of the Intra insolvency. The Intra signature can still be seen in parts of the Jiangmen factory today.
The Jiangmen (Guangdong province) facility is currently China Wheel’s largest wheel factory. When Tyres & Accessories visited the site there were 32 casting automats at the factory that attracts the lion’s share of the company’s investments. 900 people live on-site, 700 of which work in the factory – some workers bring their families with them. The average age of employees is about 28. Many come from far-off provinces in order to return to their homeland village as well-respected men after years of factory work. Additional workforce is in no short supply. The pool of potential employees is enormous as jobs at the factory are considered to be highly desirable.
The factory only produces AlSi7 alloy and the output was at the time of our visit (autumn 2005) was just-about 1 million units. Plans to extend this to1.5 million units are part of the company’s short-term investment programme.
There is another expansion project at the Taian (Shandong province) site. This is set to bring the facilities capacity from 800.000 units (with 600 workers) up to 1.4 million units (with 1000 workers). Here, as at all its factories, the company produces exclusively using the low-pressure process using machines originating from Germany and Denmark. Partners Tse and Zhang started our with the Taian factory.
The third wheel factory is in Tianmen (Hubei province), in which 450 employees produce 600,000 casted wheels annually. One production “bottleneck” here is in the painting side of the process.
China Wheel owns four chrome plating factories (in Taian, Shandong province; Donghua, Donghui and Zengcheng all in Guangdong province) with an annual capacity of just under 1 million units. In view of demand for chrome wheels from the USA, this is clearly not sufficient so in the future, Oriental UMA (Zhong Shan) Automotive Decor Ltd. will give China Wheel’s products an even higher level polish as probably the most modern chromium plating plant in the world.
The three pillars of China Wheel are – according to Derek Zhang – first of all reputation, secondly service and thirdly (as the a company slogan puts it) “Let customers be moved.” This really sums up how China Wheel in general and Derek Zhang in particular see alloy wheels as completely emotional products.
Goodyear Tire & Rubber Co. reported a net income of $74 million for the first quarter of the year against record first quarter sales of $4.9 billion. Sales for the quarter were up 2 per cent compared to the same period last year, while the net income results were up 9 per cent versus the first quarter of 2005.
Sales declined 5 per cent in the European Union Tire business compared to the first quarter of 2005, which was the strongest first quarter in the unit’s history. Price and product mix improvements were not enough to offset unfavourable currency translation of approximately $98 million and lower volume in the consumer replacement market.
Avon Tyres is promoting its online brand exposure with the launch of a new web site, accessible at www.avontyres.com The new site streamlines the tyre selection process, and provides a comprehensive guide to Avon Tyres and their extensive list of products.
One European tyre manufacturer that clearly is expanding at the moment is Brisa-Bridgestone Sabanci Tyre Manufacturing and Trading Inc. Since 2003 the Turkish joint venture company has invested about $174 million into the expansion of its local production capacities which will eventually increase by 55 per cent to more than 10 million units.
In order to distribute this growing production capacity the Turkish tyre manufacturer is looking for new customers that should come from Russia, says Haldun Kuran. Right now there is no market for Brisa in Russia, the international sales director continues. But very soon the company will sell its first Lassa branded tyres on the Russian market through the “Pole Position” francise, which is linked with Bridgestone and operates about 100 point of sales.
The environmentally-friendly credentials of retreaded tyres have been given a major boost following the news that C-Tyres Ltd, one of the UK’s leading retread manufacturers, scooped the Environment Award at the prestigious TAFF (Tyre and Fast Fit) Awards, organised and presented by the National Tyre Distributors Association (NTDA). C-Tyres managing director Gary Oliver was presented with the award by Renault Vans National Fleet Sales Manager (LCV), Mark Lovett on 26th April at the NTDA’s Annual Dinner held at the Birmingham Metropole Hotel.
(Akron/Tire Review) Bridgestone/Firestone North American Tire (BFNAT) plans to close its single largest tyre plant by the end of this year. BFNAT has issued a required Notice of Potential Plant Closure with the United Steelworks (USW) regarding its Oklahoma City, Oklahoma, plant, and said that “global market forces have made it extremely difficult, if not impossible, to restore the plant to a competitive position, even with significant new capital investment.”
The 4th Citexpo will be held in China from Sep 6-8, 2006 to suit the marketing schedule of the majority of the exhibitors and buyers. Over 200 exhibitors will showcase their latest products and technology in an 8,000 square metre exhibition area. According to the organisers, over 80 per cent of available stand space has already been sold.
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