The second quarter was tough, but look out for a rebound in the second half of 2011. That’s the view of Morgan Stanley analysts with reference to Cooper Tire’s dramatic recent share performance. Reducing the company’s price target from $30.00 to $27.00, the company re-iterated our overweight rating saying the tyre manufacturer shares offer “compelling value following [the] recent [stock] sell-off.”
Price increases of up to 11 per cent for all US market OTR tyres will be implemented by Yokohama Tire Corporation on September 1. These price rises will also be accompanied by in-line adjustments, the details of which will be announced at a later date.
No I am not referring to the IT skills of the tyre business at large. To be fair, in recent years our industry has taken giant steps towards the optimization of its processes using computers and better use of the Internet to reach customers. Just look at the continuing proliferation of tyre information and retails sources online, not to mention the trade’s increasing presence on social networking sites and latterly the emergence of a number tyre price comparison sites. The, of course, there’s EDIWheel but that’s all another article (see October’s e-commerce feature for more on this). No, on this occasion I am talking about the UK government policy, metrocentricity and online tyre browsing – or rather the lack of it in Westminster.
The effects of the recession mean that more people are keeping their cars for longer and putting off the major expense of buying a new vehicle, according to new research from Halfords Autocentres. However, the mature motors of today are a long way from the old bangers of the past thanks to better engineering and maintenance techniques.
According to experts in the field, drivers are recognising that maintaining and running an older vehicle is more cost effective than buying a newer model.
Despite the fact that both Continental and Michelin reports second quarter/first half pre-tax profits (EBIT) broadly in line with expectations, financial analysts have highlighted the “difference in momentum” between the two firms’ results. According to Morgan Stanley, the intraday spread between the two stocks was 600 basis points when the results were announced on Friday 29 July.
“Although we think Michelin can surprise positively in the second half, in the shorter term Conti should outperform thanks to improving momentum in consensus earnings,” Morgan Stanley’s Edoardo Spina commented, explaining the differential.
Following the publication of second quarter/first half 2011 financial results showing Pirelli doubled net profits year-on-year, financial analysts have lauded Pirelli “over any other auto part or tyre maker in EU.”
Yokohama is considering switching some of its existing tyre production from an undisclosed location to North America. In a mid-year company/industry report released by Yokohama Tire Corporation, senior vice-president Dan King stated: “We’re always looking at matching our supply and demand, and that means evaluating capacity increases and allocation changes. We’re looking at all those possibilities, including pulling allocation from one area of the world and bringing it to North America.” King commented that further consumer capacity increases are still under evaluation at Yokohama, and a new US plant may result from this. He did not specify what sort of tyres would be produced in a new North American plant, however the senior vice-president noted that despite higher production costs in the US, the company would have the advantage of being close to the market and be able to service its accounts in a “more efficient” way. “It’s a balancing act between costs and benefits, but our plan is to constantly evaluate building new plants for the future,” said King.
In addition to the appointment of Rafael Navarro III to the role of vice-president, Communications and Media Relations, as reported on tyrepress.com earlier today, Pirelli has announced to further promotions in its North American operations.
Two local businessmen have opened the latest HiQ franchise to be added to the network, which now numbers over 150 UK branches. Former car dealership bosses Keith Hancock and Matthew Stone opened the new centre on Stag Road as part of a new business venture to increase HiQ’s prominence in Kent, eastern Sussex and Surrey. The Tunbridge Wells centre offers full servicing in addition to the normal fast fit activities.
Back in April, Continental formally rounded up its latest round of extensions to the manufacturer’s high performance tyre range with the top-of -range ContiSportContact 5, designed for powerful sports cars in over 20 sizes; the PremiumContact 2, for compact and medium range cars upwards; the SportContact Vmax, for the customising sector and approved for speeds of up to 360 kmh (225 mph); and the EcoContact 3 for compact cars. The SportContact 5 P, launched at the end of 2009 and designed for rear-wheel drive, powerful cars, completes this list, fitting 19”-plus sizes.
Event Tyres has expressed is honour at winning the Honest John Outstanding Achievement Award for the UK motor trade’s most consistently endorsed company by their readers. Honest John writes a weekly motoring advice column in the Daily Telegraph and since 1995, combined with his website, has answered a staggering 500,000 letters and emails from motorists with all kinds of motoring problems and conundrums.
Iffy. Rip-off. These are but two words used by women to describe the experience of taking their vehicle to a garage, as HiQ recently discovered. Using statistics from online researcher OnePoll, the fast fit network found that some 70 per cent of women believe they receive dishonest and untrustworthy service when they visit a garage. The HiQ commissioned survey of approximately 2,000 motorists also found that 24.3 per cent of women charge the men in their lives with taking their car in for new tyres because they found the whole experience so unpleasant.
Gaither Tool is credited for introducing the first portable automatic bead booster, and Gaither Europe has now launched what it considers to be the next generation of modern bead booster – the Gaither Bead Bazooka. This latest model offers the considerable advantage of being lighter and more compact; Gaither reports the Bead Bazooka weighs just 5.5 kilograms – less than half that of the 12.5 kilogram Gaither GB5A. It is also 60 per cent smaller. Gaither believes these reduced dimensions are just one of the advantages the Bead Bazooka offers; it also sees customers being attracted by its pricing and its delivery of the “most powerful automatic rapid air release system” of any bead seating device on the market.
A recent HiQ survey suggests that negative perceptions of the fast-fit industry amongst women continue to linger after independent research revealed that while 70 per cent of women believe they receive a dishonest and untrustworthy experience when they visit a garage. The research, commissioned by HiQ, also disclosed that 24.3 per cent of women charge the men in their lives with taking their car in for new tyres because they found the whole so unpleasant. However it is worth pointing out that the level of trust is not much higher amongst members of the more traditionally dominant sex: 62 per cent of men feel the same way. What’s more, 53 per cent of men surveyed “do not trust garages and tyre dealers for advice, and would rather research online instead”. HiQ says that five female marketing experts are attempting to change these perceptions by bringing the fast fit industry in line with high street shopping experiences.
Goodyear's first quarter 2011 results were “significantly above expectations” according to investor information published by Goldman Sachs. In addition to stating that the results were above their estimates, the analysts said Goodyear’s figures came in ahead of the wider consensus, “driven largely by a $361million tailwind from pricing and mix” which was way above the $278 million projection. According to Goldman Sachs, this increase is impressive because it exceeds the $300 million per quarter the market was typically able to absorb in periods of high inflation.
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