3-5 per cent price hike for Indian tyres
The Indian tyre industry is gearing up for 3 per cent to 5 per cent price hike starting in December.
Posts
Goodyear promises more job reductions
Product NewsThe Goodyear management confirmed that it will cut another 1,200 jobs, beginning this year and finishing next. Goodyear has already cut 3,700 jobs this year and the bad news looks likely to continue next year. The management did not specify which jobs will be lost, nor which countries will be affected. The job cuts, along with cuts to employee pensions and benefits, are expected to save the company $350 million next year, Chief Executive Officer Robert J. Keegan said. Goodyear also announced that it also will raise prices 2 to 3 per cent on car tyres, 5 to 6 per cent on commercial tyres from the beginning of December.
Tyre Wars: An overview of the wholesale tyre conflict
NewsThe tyre trade has been buying and selling tyres for over 100 years. One might have imagined that it would have settled on a profitable, manageable and structured method of distributing car tyres from manufacturer or importer to retailer by now. However, it hasn’t and one suspects it never will.
Way back in the mists of time life was simpler. The tyre manufacturers supplied their tyres to the vehicle manufacturers and tyres were supplied at the local garages. The number of brands available was limited and people tended to buy what they wanted at the garage displaying their brand’s logo.
In the 1960’s tyre manufacturers would have supply arrangements with local dealers who would agree to take their brand of tyres and then redistribute to local tyre fitters, all at fixed retail prices of course. Then the manufacturers decided that they could deliver, and they cut out the local dealer, they set up their own logistics operations and offered to deliver tyres to anyone who would buy them. The result was chaos.
In the meantime, the network of local tyre wholesalers in the UK was developing. The manufacturers realised that they could not survive delivering just their own brands so they delved into the market with their own tyre wholesale operations.
At the same time there had been the development of a number of regional tyre wholesalers. Of which Stapleton’s had become a national player.The co-operation of strong regional wholesalers across the UK culminated in the establishment of Group Tyre.
Whilst Stapleton’s and Group Tyre dug in for a long war a third player entered the fray. Hampshire-based Micheldever, the sleeping giant, decided to make some moves to expand out of its Southern base. It first bought Southam Tyres, then opened a warehouse at Chepstow, and now Halifax with rumours of interests in the North East being rife. Battle was joined.
To listen to the larger operators it would be fair to presume that no independent had any involvement in the fleet market or the franchised dealer sector. However the independent trader is well aware of the situation and whilst some may be content to work on ever diminishing markets, others may be taking another view of the situation.
Maxsport Competition Tyres: Retreading the motorsport way
Product NewsIn today’s economic climate there are few people investing in car tyre retreading. The received wisdom is that in the UK car tyre retreading is dead or dying, and that across Europe it is seriously ill.
However, Peter Burgess, tyre trade enthusiast and entrepreneur has done just that. He has invested in a car tyre retreading plant, which for many people in the know is tantamount to confirming a kind of madness not seen since George III. However, Peter Burgess reveals that there is indeed method in his madness.
Maxsport competition tyres have been around for 15 years or so. The brand was originally owned by rally enthusiast Redmond Barry. Unhappy with paying high prices for motorsport tyres, Barry bought a few moulds and contracted an existing retreader to produce the tyres for him. Initially he had tyres made for himself and a few friends but the demand grew and the Maxsport brand developed a role in the motorsport sector. By 1993 the brand was sold to Monarch and Barry took on a role as sales consultant for Maxsport. When Monarch went into receivership Redmond Barry and Bill Madison bought the Maxsport side of the business. The next couple of years were a bit of a rollercoaster as manufacturers came and went.
In the meantime Peter Burgess had been selling Maxsport motorsport tyres through his Treble B outlets and directly to the grasstrack market. This experience with the brand and a knowledge of the market led Peter Burgess into a business relationship with Redmond Barry which resulted this year in the opening of a brand new factory dedicated to manufacturing Maxsport Competition Tyres.
Tom Dattilo: “The customer is king”
Product NewsUS tyre maker Cooper is a phenomenon. During the last ten years it achieved the – relatively speaking – best profits with an operating profit of clearly more than ten percent. But today this is different. The difficult American market, as well as higher raw material prices, have had an effect on Cooper’s operating profit too. But, during this year, and in particular during the recent months, Cooper has made good progress. Cooper is rather successful in the retail business because the company is only engaged in the replacement market and does not have its own sales chain. Talking to TYRES & ACCESSORIES at the SEMA show in Las Vegas, Cooper’s chairman Tom Dattilo explains the key to success: “We treat our clients well, the customer is king and we deliver the best products with a consistent product and brand strategy.” Dattilo confirms again that Cooper will sell up to 4.5 or 5 million tyres extra during next year. While competitors like Goodyear and Continental close plants in the US or reduce their production capacities, Cooper only has one problem: where can we produce the additional quantity of tyres?
Pirelli is on schedule
Product NewsFor Pirelli the current year is on schedule in the face of good sales and earnings. Higher prices for raw materials won’t burden Pirelli’s results before the new year. Talking to TYRES & ACCESSORIES at the SEMA show in Las Vegas, Dr. Francesco Gori, Managing Director of the Pirelli Tyre Sector, again affirms the good business in the USA. For the second time in a row Pirelli will end a year making a profit on the biggest tyre market in the world. This is even more remarkable, because Pirelli has just opened its MIRS-plant in Rome, Georgia, for which the company has incurred launch costs. During the last years the Italian company was pleased with an annual sales growth of about 20 per cent. This was partly because of the OE business Pirelli undertakes with car makers Ford and Chrysler. But not only that, the tyre maker has gained ground also on the replacement market after the sell-out through mass merchandisers has been stopped. In Latin America Gori expects Pirelli to be clearly number one ahead of Goodyear, whose Mexican activities structurally belong to the North American business (Nafta). The prospects are rather good that Pirelli will generate sales of more than 3 billion euro during this year solely with tyres; during last year this economic indicator stood at 2.857 billion euro. Exact figures concerning third quarter performance will be published on November 11.
Rubber prices hit new high in Indonesia
Product NewsReduced supply and increased demand – notably from Chinese companies – have pushed Indonesian rubber prices to a record high. Bad weather has restricted the amount of rubber tapped in Indonesia and other producing countries such as Thailand. Tyre grade rubber price is around 66.75 cents/lb, compared with last December, when the price was at a low of 39 cents/lb. A trader said that most deals tended to be for small quantities and short delivery. There has also been increased demand from Bridgestone and Goodyear.
Raw material costs push up Indian tyre prices
Product NewsRising raw material costs have led to Indian tyre manufacturers raising prices by up to two per cent this month, according to the country’s Automotive Tyre Manufacturers’ Association. Natural rubber prices rose by 40 per cent over the past year, and synthetic rubber prices by 50 per cent. Unexpectedly high demand from the tyre industry – which uses more than half of the rubber produced in India – and heavy rainfall affecting rubber tapping have contributed to the increase in costs, part of which has been passed on in higher tyre prices.
Car tyre sales in Poland reach record
NewsThe total number of car tyres sold in Poland in the first nine months was a record 5.4 million, or eight per cent higher than the same period last year. Sales of tyres H-rated and above grew by 21 per cent, and off-road vehicle tyre sales were up 54 per cent. The biggest sector – budget tyres – saw sales rise two per cent and winter tyre sales were up 13 per cent. Analysts expect the figures to have positive effects on the share prices of the two tyre companies on the Warsaw Stock Exchange; Stomil Olsztyn and Debica, which has a market share of over 50 per cent. Also, as exports account for the majority of their turnover, the two companies will benefit further from the strong Euro.
California passes tyre efficiency law
Product NewsIn California, car tyres fitted as OE have to conform to federal fuel economy standards. However, the state argues that this should also apply to replacement tyres and has passed a law requiring the California Energy Commission (CEC) to develop efficiency standards, measured by rolling resistance. These standards will be in place by July 2007 and take effect a year later. Individual tyres will not have to be labelled, but retail stores will have to display efficiency lists.
Pressure on Goodyear is growing stronger
Product NewsThere has been an unequivocal direction from Akron and Brussels, European Goodyear directors tell their subordinates. Once again, no matter by what means, the company has to cut expenses. Apparently the 2003 Ebit goals (reportedly 400 million US Dollars), that have been set by the creditor banks, are seriously at risk. Should the Ebit remain below the minimum 400 million threshold the banks would be entitled to withdraw from the concessions made earlier this year. And achieving the set Ebit goals seems to be becoming more difficult due to rising raw material prices and a sluggish American economy. The latest round of economy measures does nothing to dispel the feeling of insecurity among employees. What is more, it makes them angry and frustrated because even the smallest purchase of goods now has to be authorised. The potential of these economy measures would appear to be virtually insignificant. According to insiders, in Europe this potential is less than 2 million Euro. How far away the corporate group still is from its expected turnaround will be revealed with the third quarter figures. That Goodyear will end this year with another severe loss can be taken as read, no matter what economy measures are taken.
German Recovery To Fuel Tyre Market Growth
Product NewsIndustry analysts expect the German automotive sector to recover in the final quarter of this year, having a beneficial impact on tyre suppliers. The high performance tyre market is showing growth of over 20 per cent and the winter tyre market will see double-digit growth. These factors, combined with more favourable raw material prices, should mean an overall growth of seven per cent in the European tyre market, the analysts predict.
Pirelli To Raise Prices In North America
Product NewsFrom October 1st, Pirelli Tire North America is to increase passenger car and light truck tyre prices. The price increase is prompted by rising raw material costs and will vary by product offering, reaching a maximum of four per cent.
Pirelli First Half Figures
Product NewsFirst half sales of the Pirelli group totalled 3.022 billion Euro, down 9.8 per cent on the 1H 2002 figure of 3.35 bn Euro, preliminary, unaudited figures show. However, when exchange rate fluctuations and changes due to consolidation are factored out, sales actually increased by 3.3 per cent. Operating income was 118 million Euro, due largely to a growth (net of exchange rates) in the tyre sector of 14.4 per cent, with sales at 1.509 bn Euro.
Cooper Q2 Results
Product NewsCooper Tire & Rubber Company has reported results for the second quarter of the year. Net income was $13 million, compared with the all-time record earnings of $39 m for Q2 last year. Turnover was up slightly at $840 m ($836 m) and operating profit was $38 m. The Tire Group reported turnover up 4 per cent to $432 m ($414 m) while operating profit declined to $14 m from $37 m in Q2 2002. The high cost of raw materials was blamed. Overall, unit sales of Cooper brand tyres rose 8 per cent in the quarter.
