Raw Materials
Bridgestone has said that it will produce 1,500 more tyres per day and raise the price of its tyres by 3.5 per cent in India, according to a newswire issued by Dow Jones. The rise comes on the back of increased raw materials prices, Bridgestone India general manager of sales and marketing, Vaibhav Saraf told the assembled throng at a news conference, Dow Jones NewsPlus reports.
Brazilian company Vipal, best known for its tyre retreading and repair materials, and Argentine tyremaker Fate have signed a memorandum of understanding with the Rio Grande do Sul State of Southern Brazil to set up a new tyre factory. The first bi-national industrial collaboration in the state, the Vipal/Fate project sees the companies invest around US$200 million in building a “farm equipment” and “aftermarket car parts” tyre plant. There has been no official confirmation of what brand the new tyres will be produced under, but Tyres & Accessories understands that this means production will focus on passenger car and van tyres.
Nigel Lewis, currently purchasing director for Avon Tyres in Melksham, will as of June 1 take on the role of managing director of Cooper Tire International Trading Company in Singapore. In this capacity he will be responsible for overseeing the operations of the Singapore buying office and procurement of natural rubber.
As of June 1 prices for Continental’s summer tyres will increase by an average of three per cent and winter tyres by an average of five per cent. The announcement made by the manufacturer on April 21 only refers to the German market, however Dr. Hartmut Wöhler, Conti’s head of Marketing and Distribution for the Car Tyre Aftermarket in Europe and Africa, stated the company is “currently preparing to implement these price increases right across Europe.”
Nankang Rubber Tire Corp., Ltd has increased production prices across its entire range of passenger, 4×4, SUV, van and snow tyres effect 20 April. Nankang said the price increases are due to the escalation of raw materials and energy-related expenses. “We appreciate the support and understanding of our customers. It was a very difficult decision to raise prices, and we need relative income to maintain same service to our valued customers,” said Eric Shih, Nankang Tire manager of export department. According to the company, Nankang last raised prices in November 2009.
Located in Beijing, Best Choice is a leading international tyre wholesaler in China having long term close cooperation with domestic manufacturers and overseas tyre distributors. "Best Choice is able to offer a range of excellent quality products that are economically priced. In 2009, the company exported over tyres to the value of over 50 million US dollars," said managing director Stephen Wu.
Hankook Tire has announced it will double its manufacturing capacity to 10 million tyres per annum by 2011, employing a further 700 skilled workers at its plant in Hungary. 450 new staff will be taken on in 2010 and 250 in 2011. The Korean company said it was “committed to long-term investment in Hungary”, a statement it supports with the tyre manufacturer vocational education and training programme it launched in cooperation with Regional Labour Offices and Lorántffy Zsuzsanna Secondary School in 2009.
Ecological friendliness may not be the first characteristic one would stereotypically think of to describe sports utility vehicles, but Italian tyre manufacturer Pirelli believe it has spotted an opportunity within this seeming anachronism. The company launched its new road-biased Scorpion Verde tyre, developed to meet what it perceives as the SUV market’s need for increased fuel efficiency. With more than just one eye on upcoming tyre labelling regulations, Pirelli claims that the Scorpion Verde boasts greatly improved rolling resistance from previous high performance SUV offerings, making it “the first high-performance eco tyre for vehicles with the highest environmental impact – SUVs and Crossovers.”
Nokian Tyres has opted to raise prices in June after almost doubling estimates for the cost of raw materials this year. Nokian Tyres estimates that its raw material cost (EUR/kg) in 2010 will increase by 10-12 per cent compared to 2009 (the company’s previous estimate was 6 per cent) due to significantly increasing raw material prices. According to the company, this will affect its financial results in the second half of the year.
Based on the theme of “Interpreting Industry Legislation and Regulations, Exploring Cutting-edge Technologies and Trends,” event organisers are publicising plans for the second annual Tire Technologies Congress in Shanghai, China. As you might expect the conference will focus on the most controversial legislation and trade issues, but there are will also be technology sessions.
Organisers JFPS Group report that the event will centre on speech delivered by over 20 general managers and research and development directors from leading tyre companies such as: Bridgestone, Goodyear, Giti Tire, Pirelli Tyre, Cooper Tire, SIBUR – Russian Tyres, Apollo Tyres, Toyota Motor Corporation, Dunlop Aircraft Tyres, Doublecoin Tire, Guizhou Tire, Yellow Sea Rubber, South China Tire & Rubber, Hangzhou Chaoyang Tire, Aeolus Tyre, China National Tyre & Rubber Guilin, Bayi Tire.
Some Tyres & Accessories readers have accumulated sufficient birthdays to remember the year 1952, but the rest of you can well imagine the world of 58 years ago: Elizabeth becomes Queen, a ‘killer fog’ descends upon London, television continues to grow in popularity, the Korean War enters its third year – and the price of natural rubber hits US$3.50 a kilogram. Panic buying stemming from fear the aforementioned conflict would spread to neighbouring countries pushed prices to heights that would never again be reached. Until March 31, 2010, that is.
Marangoni SpA has signalled its intention to raise its selling prices in the second quarter of 2010. According to the company, the increase will affect all tyre retreading materials, marketed through the Retreading Systems division and all the retreads marketed by the Commercial & Industrial Tyres division. Further increases in the list prices of tyres for fork lift trucks are also possible. The latest news, which follows a similar announcement at the beginning of February, is attributed to the “continuous rise in the costs of raw materials.”
Alliance Tire Europe BV has announced that it will implement a price increase of around 4.5 per cent effective 1 April. All shipments after 1 April will be made at the new price. According to the company, Alliance has taken the decision “due to the rising of raw materials,” and “has no other alternative but to increase prices by an average of 4.5 per cent”. As a result some sizes and products will face a smaller increase, while others could increase above 4.5 per cent. “We are in the same situation as all other tyre manufacturers”, Manuel Pintado, president of Alliance Tire Europe BV commented.
Chinese manufacturers produced 654.64 million tyres between January to December in 2009, up 18 per cent compared with 2008. According to data released by the China National Bureau of Statistics (CNBS), 57.19 million tyres were produced in China in December 2009, up 52 per cent compared with the year before. In addition CNBS said synthetic rubber production rose 8.7 per cent to 2.76 million tons during 2009. In December, synthetic rubber output rose 15 per cent compared with the same period last year, reaching 268 thousand tons.
While everyone has been focusing on the US-initiated anti-dumping tariffs against Chinese-made passenger car tyres, another anti-dumping investigation has escaped widespread coverage. On 13 August 2009 the European commission began an investigation into dumping allegations made against Chinese wheelmakers who allegedly sold products into the European markets beneath cost price. At the time 60 Chinese wheelmakers received notification of the impending investigation and most reportedly began cooperating straight away. Nevertheless, according to China’s Ministry of Commerce, the investigation is likely to cost Chinese wheel exporters an estimated US$390 million. There is still a chance that no tariffs will be implemented, but if they are they will apply across both the OE and replacement sectors and are predicted to be lie somewhere around the 30 per cent mark.
The European Commission’s investigation, which began just a day after the Chinese companies involved were informed of the allegations, followed a complaint made by the Association of European Wheel Manufacturers’ (EUWA) in June 2009. At the time the journal of the executive arm of the 27-nation European Union said the investigation was initiated “having determined that there is sufficient evidence to justify the…proceeding.” However, China's Ministry of Commerce denied the charges saying: “It raises the cost of repairs for customers, affects the recovery of the European auto sector from the global financial crisis, and hurts the interests of both China and Europe.” Either way, with Chinese produced wheels representing a significant proportion of replacement market products on offer, any kind of trade barriers that are implemented are likely to have a similarly significant effect on the shape of the market.
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