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Winter Tyres Business – A Hope And A Worry

Last year’s miserable winter tyre business has had a marked effect on many market players. Only a small number of dealers in very few regions of Germany could report a normal winter tyre business. In most parts of the country the snow came too late. If it does not snow until the beginning of November it becomes increasingly harder day by day to convince the end users to fit their cars with winter tyres. November is absolutely the most important month for retailer‘s winter tyre business. In late summer and early autumn of 2000 the tyre manufacturers were very happy about their sales to the dealers, which reached record levels. But of course the managers of the tyre industry are not so naive as to regard the lack of sales to the end users later on in the season as a problem only for the dealerships. This problem comes back to the manufacturers in two ways. First of all dealers experienced a lack of financial liquidity and there were problems in paying invoices. Secondly, having tyres in stock affects the willingness to order for next year – in this case 2001 – at the same level as before. Because merely listing the troubles would be pointless and unproductive, we tried another approach: we spoke to a lot of market players in order to form an overview of opinion and compared this with some hard figures.

30th November 2001/by Tyrepress Editors

New Member of TecDoc

American automotive supplier Delphi has become the latest member of the TecDoc automotive parts information platform. With a turnover of 29 billion US-Dollars in 2000, Delphi Automotive Systems is the biggest automotive supplier in the world. Altogether 114 companies worldwide, representing 130 brands, now support the TecDoc platform, covering 100 percent of the European spare parts market.

30th November 2001/by Tyrepress Editors

Continental’s Results Have Slowed Down And Redundancies Are Possible

Compared to last year, Continental Group’s turnover for the first nine months of 2001 has increased from 7,438 billion Euro to 8,240 billion Euro (a rise of about 10.8%). The Group’s operational result (EBIT) of 238 million Euro (385 million Euro in 2000) has especially been affected by the North American tyre business and a non-recurrent expenditure of 58 million Euro due to the reconstruction process, begun in the second quarter and which has resulted in the closure of the truck tyre production site in Herstal (Belgium) and the remoulding site in Bad Nauheim. The Group’s result before tax has fallen by 160 million Euro down to 96 million Euro. After tax of 44 million Euro, the result is 104 million Euro more than last year’s amount, and the earnings per share are 0.35 Euro (1.16 Euro in 2000). Presenting the quarterly results at a press conference, Manfred Wennemer, who was appointed Managing Director on 11th September 2001, explained the Group’s directional change, concentrating on profits, results and cash flow and on cutting down financial debts, which also involves focusing on profitable transactions and devolving profit-and-loss responsibility on to the Business Units. Additionally, Wennemer announced some bigger restructuring measures: “All parts of the company are under scrutiny, and there are no holy cows”, he emphasised, adding the comment that factory closures and redundancies could be a possibility.

30th November 2001/by Tyrepress Editors

Car Parts and Accessories – 3rd BBE Conference in Cologne

On 5th April the consultant company had invited more than 150 experts from the car parts and accessories sectors for its third conference concerning the car component aftermarket. As tyres are counted as part this segment as well, trends from this part of the business were presented and discussed as well. In times where sales of new cars begin to drop, the importance of the aftermarket business begins to grow again. But on the other hand the competition in this field is fiercer than ever -due also to the internet and e-commerce. This was the reason why the event was subtitled “The good times are over – means for success in hard times”. And the topics of the internet and e-commerce were at least mentioned by almost every speaker, sometimes being even the main topic. These new media enable the industry to provide products directly to the end consumer, leaving behind the old traditions of trade via wholesaler and retailers.

30th November 2001/by Tyrepress Editors

Different Tyre Pressure Controlling Systems Are Causing Confusion

More and more tyre dealers ask for the tyre pressure control systems with which the newest car models are fitted as original equipment. They are annoyed at getting no satisfactory answer, even from the car dealers selling these cars. One of the problems is that there is no standardised system. Most European car manufacturers are using as a basic a system from supplier Beru, for example with valves from Alligator. But the French car makers went down different development paths with other suppliers, for example Valeo and valve-sub supplier Schrader. The systems are completely different! If it is not possible for the Europeans to find a common level of tyre wheel systems with tyre pressure monitoring sub systems how difficult might it be to find harmony with the car makers from Japan/Korea and North America? The tyre pressure controlling systems situation is constantly changing, but we are painting a picture of the situation today. For example to secure the function of the newest Renault Laguna II the car maker explains that you must use only original parts – for example only Renault wheels. Using different wheels makes it impossible to fix the sensors and the function of the system is interrupted. If this were to become typical the free workshops (car repair stations, fast fitters or tyre dealers) will be unable to take part in the new technologies and the only workshops working with the systems, repairing details and replacing parts, will be the workshops of the car manufacturers.

30th November 2001/by Tyrepress Editors

Boom In Alloy Wheel Original Equipment

Car makers in a lot of markets grieve over significant reductions in new car registrations. One should not forget that, for most suppliers, from whom parts are needed for the production of cars, the consequences are negative also. But not for manufacturers of light alloy wheels: a flood of special car editions and generally growing fitment rates – in comparison with steel wheels – means that the European aluminium wheel manufacturers are selling all that they can produce. New facilities are even having to be built. The aluminium wheel in original equipment changes from a part which raises the value of a car to standard fitment, even for middle class vehicles. In spite of these favourable conditions, the sector is under pressure. The middle-class structured alloy wheel manufacturers cannot resist the downward trend of prices, caused by the car manufacturers. This is especially so because the purchase of this product happens more and more on a global scale. Besides this, the number of possible oe suppliers of cast aluminium wheels is still enormous. A process of consolidation (as in other segments supplying oe) has not happened, until now.

30th November 2001/by Tyrepress Editors

A Question Of Statistics: Influence Of Tyre Pressure On Traffic Safety

Three percent of all traffic accidents in Germany occur due to technical defects on the cars, more than half of which are tyre defects; in total round about two percent of all accidents are due to the tyres. This figure seems to be reassuring, but they apply only to accidents caused directly and undoubtedly from the tyres – for example a puncture. The question “what was the reason for the puncture?” – maybe a long-term inner defect – is never asked. In the common statistics no hint is given on the influence of reduced tyre pressure on traffic safety. Nobody can give information about how many accidents happened because of faulty steering or below-standard characteristics in bends or hydroplaning safety. Also accidents involving stationary vehicles parked on the street are not counted in the statistics. Collisions with “objects” on the roads are mentioned, but the objects are not specified. Very often these “objects” are tyres or parts of tyres, which can be a very dangerous obstacle – especially when the objects are truck tyres. For the statistics regarding accidents caused by faulty tyres it is still correct what was mentioned in an analysis in 1985 – and it sounds ironical: one result of the report is that it is not possible to make concrete declarations about the reasons for accidents. All we know is that low pressure in the tyres has an influence on the number of accidents – but nobody can say how much.

30th November 2001/by Tyrepress Editors

Study Says UK Motor Dealers ‘Unable To Compete’

A report by the Consumers Association says that UK franchised motor dealers cannot compete effectively against rivals in every area of business, from new car sales to servicing. When it comes to repairs and sales of spare parts, the dealers cannot match prices and performance of competitors such as the large fast-fit chains, the study concludes.

7th December 2000/by Tyrepress Editors

Phoenix Long-Term Ambitious

Phoenix, supplier to the vehicle industry, itself a tyre manufacturer many years ago and still specialising, though not exclusively, in rubber parts for the automobile industry, is not reaching its turnover and profit targets as quickly as planned. Air springs, an area in which Continental is also involved, however, promises to develop into a jewel for the group from 2001 and gives ground for hope of steep rises in turnover and earnings in the long term.

7th December 2000/by Tyrepress Editors

Montinex In Administrative Receivership

On Friday 4th August, the Montinex tyre retail group went into Administrative Receivership. Discussions with potential purchaser Stapleton’s Tyre Services broke down last month. The parts of the Montinex group in Receivership are Chessington Tyres, Malvern Tyres, Northway Tyres and Charlie Brown’s Autocentres, totalling some 144 retail outlets. It is hoped to sell these as a going concern. Fleet Tyre Management is not in Receivership and is continuing to trade. Montinex turns over £86m annually and employs 840.

7th December 2000/by Tyrepress Editors

ETRA Conference Discusses Scrap Tyres

The problem of scrap tyres (or, as ETRA prefers to call them, post-consumer tyres) is one which affects every country where tyres are sold. ETRA, the European Tyre Recycling Association, is the only European organisation devoted exclusively to tyre and rubber recycling and in July, the association held a conference in the UK to discuss the scale of the problem, assess progress and look at possible solutions. ETRA regards post-consumer tyres as a readily available and inexpensive resource rather than merely a problem and the association is keen to get this viewpoint across to the industry, governments and the public. Around 2.5 million scrap tyres arise every year in the EU, of which 61% are re-used or recycled in some form. 39% go to landfill, which will be banned shortly. The conference programme was a full one, with a variety of speakers, including representatives from enforcement and licensing agencies, trade associations and those involved in developing new processes and uses for scrap tyres. Among the solutions discussed were rubberised asphalt, rubberised sports surfaces, the emotive subject of using tyres as artificial reefs and a method of using microwaves to break down tyres into their component parts. The effective and environmental disposal of scrap tyres is a problem for all parts of the industry and one which will become even more acute when landfilling of tyres is banned in a few years.

7th December 2000/by Tyrepress Editors

Redundancies And Closures At Finelist

There are reports of redundancies and closures at car parts group Finelist, which went into administrative receivership. Rumours that 120 staff had been made redundant and that 50 Motor World car accessory shops had been closed down, were not confirmed by receivers. It is believed that over 100 companies have expressed an interest in buying parts of Finelist, with ten or so willing to buy the group as a whole.

7th December 2000/by Tyrepress Editors

The Tyre As Part Of A System

The tyre can no longer be regarded as an isolated part of a car but is integrated into an increasingly complicated network or system. Progress in electronics especially has been revolutionary and has enormous influence on the work of tyre technicians. The engineers have to think in systems and integrate the tyre into all parts of the motive power of the car. Between the two corners “tyre wheel system” and the engine, is a wide field which the car makers and their suppliers are exploiting step by step. Immediately next to the tyres are modules such as brakes, shock absorbers and axles. Around the tyre is the “chassis”. The producers of certain of these elements in the past developed their own product without contacting the producers of neighbouring chassis parts. They were driven by their customers in the car industry, who gave information about the performance of the product with the target that all the parts should be compatible. As development progresses, this becomes harder and harder. In the future the suppliers will be forced to cooperate one with another, in order to make the best possible technology available for the car.

7th December 2000/by Tyrepress Editors

Not only Firestone: Now Huge Recall At Ford

Car manufacturer Ford has – as American news agencies have reported – recalled 876,000 cars of the types Explorer and Mercury Mountaineers because of faulty chassis parts. 262 incidents, mainly occurring in Canada, have been reported to date. The owners of these models will be informed by mail. The Ford press department in Cologne does not regard Germany as being involved in this recall.

7th December 2000/by Tyrepress Editors

Pirelli Reifenwerke: A Denial Denied

In its August issue NEUE REIFENZEITUNG reported that Pirelli had fallen behind with its plans for Germany, in parts by 20 p.c., and that the attraction of the Pirelli brand was on the wane, with price erosion as the consequence. Dr. Wentz, the Pirelli Reifenwerke boss, it was said, had to postpone his intended retirement, because G. Sala, his successor-designate, was unable to take up his post for health reasons. We also mentioned the possible return to Höchst of Dr. P. Masera as Pirelli Reifenwerke boss. Pirelli declared that Dr. Wentz would stay in office for several more years, and that there was no question of the Pirelli brand becoming less popular, rather the contrary. Results were good, we were told, Pirelli was doing very well in Germany and no redundancies were planned. One month later the head of the group, Tronchetti Provera, announced 2,800 job cuts for this year, 800 of them on the tyre side. In this context Milan made special mention of the significant price reduction in the winter tyre segment and in super-high-performance tyres, especially in the German market. In the meantime Dr. Masera has taken over as Chairman of the management. Dr. Wentz will leave Pirelli Reifenwerke by the end of the year but retain his seat on the board of Pirelli Deutschland AG and is also in line for a seat on the supervisory board.

7th December 1999/by Tyrepress Editors