Kumho Europe representatives have quashed rumours that the South Korean tyre manufacturer is negotiating with Bridgestone over the sale of its new Vietnam factory. Wi Yun, Kumho Europe’s marketing manager, told Tyres & Accessories the suggestions published by Jaccar Investment are “a completely wrong statement.” Dismissing the report as “rumours” Wi added: “There have never been any negotiations nor discussion concerning this matter.”
Market analysts are predicting that the German market scrappage scheme is likely to have come to end today as demand for cars purchased under the scheme now exceeds supply. According to a Deutsche bank report published today the scheme has been responsible for 9000 unit sales a day since its introduction and – as of today – only 5000 applications remain.
A report on Bloomberg.com suggests that rubber prices will climb by up to 19 per cent by the end of 2010, as demand for vehicles in China witnesses continued growth.
1 in 5 companies in the UK Tyre Manufacturers & Distributors industry are now making a loss making according to analysts at Plimsoll Publishing. The report’s author, David Pattison, commented: “Increasingly we are seeing companies making a loss for the first time in their history and I think they can rightly claim they are victims of difficult trading conditions.”
However, 30 companies are reportedly making a loss for the second and even third year running. According to Plimsoll, “these companies are either blatantly undercutting the rest of the market to enhance or maintain market share or, more likely, have delayed making…painful decision[s]…No one wants to trim costs, lay off staff, cancel dividend payments and the like but continuing on regardless is fast becoming unviable.”
A report on the Business Standard website suggests that Indian tyre companies are contemplating raising prices. The article says that Apollo Tyres, the country’s second-largest tyre maker (by tonnage) is planning to increase tyre prices four to five per cent on account of a 10 to 15 per cent increase in the prices of natural […]
Goodyear and the United Steelworkers of America have agreed to an extension of their national contract, taking their agreement up to 29 August.
The possibility of an extension to the US’s “cash for clunkers” auto rebate scheme has led to a bump in Asian stock prices for shares in Bridgestone, Hankook and others, according to Reuters reports. The US senate is mulling over a plan to offer 200 per cent of the original funding for its car sales booster scheme, since the billion dollar pot quickly evaporated. Purchasers can claim a rebate of up to $4,500 when they trade in old models for new, green alternatives.
Yesterday (July 24 2009) NHTSA announced new US braking standards requiring most truck tractors to cut stopping distances by a third. As Tyres & Accessories/Tyrepress.com reported yesterday the new regulations will be phased in over a four year period beginning with 2012 models. However, if you would like to read the details and assess their impact your business, you can download the complete report here.
Financial analysts are projecting Michelin will post sales of 7.2 billion euros (-13 per cent compared with last year) when it presents its first half results. According to a recent Deutsche Bank investor’s note, the company will report an operating loss of 50 million euros and a net loss of 360 million euros (after factoring differed tax assets and restructuring charges). The bank’s first half estimates are below consensus (expected operating profit – 90 million euros; net loss – 200 million euros), however looking forward to the second half the analysts report that they expect a sharp rebound (above consensus) “thanks to a recovery of volumes.”
In its interim report for the months between April and June 2009, Trelleborg reports that “in a difficult market situation, we have successfully managed to generate a continued strong cash flow and improved our operating margin compared with the first quarter of 2009.” The company also states that effects of its “capacity adjustments” are gradually increasing, although the sense of uncertainty regarding the future remains “great”.
Net sales in the second quarter of 2009 totalled SEK 6.867 million, down 17.5 per cent on the same period a year earlier. Operating profit, at SEK 159 million, decreased 52.8 per cent year-on-year.
Axle Group Holdings reported an operating loss of £3.2 million in 2008, compared with operating profit of £4.2 million in 2007. However, sales from Axle’s National Tyres & Autocare retail chain and its Viking tyre wholesale business grew 13.4 per cent to £153 million. According to the Herald newspaper, Axle Group generated a £3.8 million profit on the sale of properties to another company controlled by chief executive Alan Revie and this is believed to have helped the company achieve a pre-tax profit of £3 million in 2008, down from £5.2m in 2007. The pre-tax profits came off the back of gross profits of £60.5 million in the 2008 (39.5 per cent of sales in 2008). However in 2007, Axle Group made a gross profit of £56.7 million, or 42 per cent of sales.
15 months ago Alan Revie unveiled plans to inject £12 million into the National chain and increase its UK estate from around 200 branches to 320 over five years. However, according to the Herald’s report, the head of the National Tyres auto repair chain appears to have enjoyed a 400 per cent increase in pay in the past year. The newspaper points out that accounts for Axle Group Holdings, which owns National Tyres, show the total emoluments of the highest paid director, soared to £2,126,000 in 2008, from £540,000 in the preceding year. The total boardroom payroll jumped to £4,057,000, up from £1,335,000 in 2007.
Morgan Stanley has raised its estimates for Continental AG shares following what the analysts described as “much stronger than expected second quarter results” According to Morgan Stanley the pre-announced second quarter results reveal an adjusted group EBIT figure “10 times higher than…expected.” The 5.9 per cent EBIT margin therefore compares very favourable with the analysts’ 0.6 per cent forecast.
Furthermore, this positive surprise appears to be split 50 per cent between the Auto and Rubber groups, where sales in the Chassis & Safety division and “strong winter tyre sell-in won the quarter.” However, the analysts also warn that while the company has obviously benefited from “early winter tyre sell-in…this cannot be extrapolated into the third quarter where we think profit will certainly be lower.”
Based upon preliminary figures for the second quarter of 2009, Continental AG is reporting a “clear profit” for the three-month period, with an adjusted EBIT of 283.0 million euros. Reported EBIT for the quarter was 38.8 million euros, compared with a loss of 34.3 million in the first quarter. These results, says Continental, demonstrate the company’s “unwavering operational strength in the midst of the ongoing crisis in the automotive sector.”
“In an extremely difficult business environment and despite the current paralysis due to its uncertain future, Continental still achieved its operating goals,” said Continental Executive Board chairman Dr. Karl-Thomas Neumann on July 20.
With our own scrappage scheme now underway, it is perhaps timely to look at the experiences of our European neighbours. It is estimated that some 3.6 million new cars will be sold in Germany this year, around 800,000 more that would have been the case without the country’s 2,500 euro scrapping incentive, which owners of vehicles more than nine years old are eligible to take advantage of. However a report from the German website ‘Kfz-Betrieb Online’, based on a study conducted by automotive industry business intelligence provider Eurotax-Schwacke indicates that government incentives to scrap old cars are no silver bullet. “The premium doesn’t rescue the [automotive] sector, it only defers the problem,” stated Eurotax Schwacke managing director Michael Bergmann.
The International Trade Commission has issued its massive report and recommendation concerning imported Chinese-produced passenger tyres, which has been presented to President Obama for his consideration.
Click to download a <a href="http://reifenpresse.de/CDML007/en/pdf/itc150709.pdf">PDF</a>
of the complete report
The 208-page report includes all of the materials and testimony the ITC considered in reaching its recommendation to impose a tiered, three-year additional tariff on the tires. It also includes the minority view on the decision, which was reached in a 4-2 vote. President Obama has until 17 Sept. 17 to decide on the ITC recommendation. (Tire Review/Akron)
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