Kumho To Compete In OE Business
Kumho Tire is seeking OE business in Europe and North America. The company has announced expansion of production in Asia, for example in the Nanjing factory.
Tyre industry pioneers, Michelin has a long history. Having begun in 1889, Michelin is now the second-largest tyre manufacturer in the world after Bridgestone and larger than both Goodyear and Contineantal.
Kumho Tire is seeking OE business in Europe and North America. The company has announced expansion of production in Asia, for example in the Nanjing factory.
Jason Vines, Ford Vice President, has said that the company has no plans to drop Firestone as a tyre supplier, although the relationship will be reviewed “on a day-to-day basis”. Ford’s new Explorer 2002 SUV (on the market next year) will be fitted with Firestone tyres, but tyres from another manufacturer, thought to be Michelin, will also be offered.
As soon as the merger between Volvo and Renault has received final approval from the US competition authority, Volvo will cut down the number of suppliers. It is said that one of the big three (Bridgestone, Michelin and Goodyear), which are suppliers of truck tyres, could lose the business.
Michelin and its local joint-venture partner Siam Cement has announced an investment of THB 3,82 billion in their Laem Chabang production plant near Bangkok. The development will double the capacity to 6.12 million passenger and light truck tyres a year. Michelin Siam also operate an additional two plants in Thailand providing production of truck, earthmover and motorcycle tyres.
The slogan was “Service Makes The Difference”. Consultants MMS GmbH, together with the German dealer association BRV (which claims to be the “centre of competence”), organised this interesting seminar. Regrettably, representatives from only about 30 independent tyre dealers attended, with the majority of the 150 delegates coming from the tyre industry and their equities. Hubert Hannezo, Michelin’s Worldwide Marketing Manager for passenger car and light truck tyres, made a very informative speech and explained to the audience what is going on, for example, in the USA and what might become popular here very soon, and why. A totally new form of service is developing through the internet, and specialists from Continental enlarged on this in detail. Larry C. Morgan, a big tyre dealer from the USA, explained his growth philosophy. He is confident that his group will sell around ten million tyres a year from 2005 on. One of his statements was “Bigger is better, only if big is better” and “If it is to be, it is up to me”. Finally, keynote speaker Sir Tom Farmer used the opportunity to explain again what Kwik-Fit is, how it has grown, and for what it stands. One criticism of the seminar might be that there was no opportunity to ask questions, nor to initiate any discussion.
There is hardly any international group, that has managed such drastic changes within such a short time, as Michelin. Not least, thanks to the world-wide success of radial tyres, François Michelin (74) was able to make the French tyre manufacturer a global player. His single-mindedness, with which he backed the product and its technical superiority, has resulted in a product- or manufacturer-driven group. It doesn’t matter therefore, if this group is No 1 or “only” 2 in today’s ranking of the world’s biggest tyre companies, considering that ranking can change quickly. Handing the leadership of the group over to his son Edouard (37), a process started years ago and now finished, has meant more for the company than just a change from old to young, from one generation to another. In keeping best with the group’s company philosophy and its assets, Edouard Michelin has been successful in creating and establishing his company as a market-driven business. At the end of September, Edouard Michelin made himself available to TYRES & ACCESSORIES for a detailed interview in Paris. The article featured in our November issue can be downloaded in full length as PDF file (size: 209 kbyte, Adobe Acrobat Reader required).
The UK magazine EuroBusiness ranks Edouard Michelin at number 103 among Europe’s richest 400 people with a fortune of 1.85 bn Euros.
Aged only 40, Pascal Hoffmann, responsible for truck tyre aftermarket business in Germany, has died unexpectedly. From 1995 until 1997 Hoffmann headed Michelin Austria, he joined the French tyre maker in 1986.
At a shareholders’ meeting Michelin Chairman Edouard Michelin announced that the French tyre maker is determined to become number two in Asia before 2005.
Michelin has introduced a new initiative in the UK, aimed at supplying a single source, total tyre life package for fleet customers. Called Encore, the new service introduces a retreading facility for Remix tyres and the possibility of retreading new tyres from competitors. The retreads will be branded Encore and will only be available for fleet customers and not on retail sale. Further details are available in November’s TYRES & ACCESSORIES. The company has made ‘substantial’ investments at Stoke-on-Trent, including a new, independent retreading facility, in an attempt to woo fleet business. Encore will only be available to those customers who buy Michelin tyres as new, as the whole aim of the scheme is to increase sales of new Michelin tyres. For fleet customers, product alone is no longer enough, as they are demanding more in the way of services and tyre management. Encore gives Michelin a greater measure of control and enables the company to offer a ‘new to scrap’ tyre management service.
In 1994 Michelin presented the prototype 445/45 R 19.5 XTA truck tyre. Bridgestone has just announced in Tokyo the introduction of such an ultra low ratio tyre under the name “GREATEC”. The tyre is available in sizes 495/45 R 22.5 for trucks and 435/45 R 22.5 for buses.
Evolution for sure, revolution not at all. That’s Michelin’s opinion regarding the B2B E-Commerce initiative of leading global tyre producers which was announced recently.
The six tyre manufacturers making up RubberNetwork.com have signed a memorandum of association; a further step in creating the global electronic purchasing marketplace for tyres and rubber, which is on track to be up and running by the year end. The six members are: Continental, Cooper, Goodyear, Michelin, Pirelli and Sumitomo Rubber industries. On the other hand, Bridgestone has left the project. Asked for the reason by NEUE REIFENZEITUNG magazine, Bridgestone Firestone Europe said that a closer examination indicated that the relationship between costs and savings was not as beneficial as was first expected.
Not many years ago the large tyre manufacturers still thought they had better make haste and claim a stake in the apparently huge markets of China and India, since life does not favour latecomers. Their enthusiasm was kindled by the example of some car manufacturers, which quickly calculated and estimated a gigantic (sales) potential in these two countries alone with their joint populations of two billion. Some car manufacturers learnt quickly that opportunities are not limitless. Tyre manufacturers fared similarly. Pirelli supplied China with some know-how, which was gratefully received but did not provide Pirelli with a strong base. Nor did the Italians make money out of the technology transfer. Conti’s big plans for India are hardly mentioned any more. The “Big Three” – Goodyear, Bridgestone and Michelin – are present in both countries, but business is quiet. In India, 29 manufacturers run 41 factories with a maximum capacity of about 43 million tyres, but only 34 million pieces were manufactured in 1997/98, most of them (73 p.c.) for trucks and buses. And 60 p.c. of passenger car tyres are still cross-ply tyres, 1998 has only seen 3,3 million radials in this segment. Our British sister magazine TYRES &ACCESSORIES reported on the Indian tyre market at length; we publish an excerpt in this issue in our December issue, including a brief presentation of some individual companies active in this market.
In an interview with the rather left-wing daily paper “Liberation” Edouard Michelin gave his comment on the so-called “Michelin Affair”. On 8th September the group reported a 20 p.c. rise in its half-yearly profits while at the same time declaring that it wanted to shed 7,500 employees in European factories within three years. The Michelin boss attributes the unusually fierce public reaction, by French politicians in particular, to insufficient public discussion. It has to be possible, he argued, to take the right entrepreneurial measures in time to achieve a rapid improvement in productivity, which is 15 to 20 p.c. below that of the group’s main competitors, Bridgestone and Goodyear. And the only way to do that, he claimed, is through accelerated growth on the basis of a new sales policy and through job cuts. Edouard Michelin reminded his critics that in the last twenty years the group had twice been faced with extinction, that it had needed to lose 25,000 employees in France and in spite of that had issued only 186 dismissal notices. Asked about the “Lex Michelin” (a change of law to accommodate the “Michelin case”, dealing with the application for state aid to facilitate social plans), Edouard Michelin pointed out that the group had indeed received a French state subsidy for its social plans in the past amounting to four or five billion francs, but that at the same time the French state had received 45 billion francs in social contributions, taxes and other levies. Today the group still makes 30 p.c. of total investments within France, he continued, and retains 30 p.c. of the production capacity in the country, although the domestic market takes only 15 p.c. of total sales. Though keen to dust off certain parts of the company, he said, he wants to preserve its culture, personality and customs. As the head of a “family business” he sees himself as “permanently accountable” and cannot afford not to make long-term plans, because he is only too well aware of having to defend his decisions also in five or ten years’ time. On the question of worldwide merger plans Edouard Michelin said that his company is in a position “to play an active part. Our gaze is directed towards Asia. Michelin has a talent for growth.”
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