(Akron/Tire Review) Hankook Tire Co.’s Optimo passenger tyre line made the list of South Korea’s “most powerful brands,” as determined by the Korea Management Association. According to a report by Chosun.com, the KMA surveyed the brand power of 2,576 brands in 164 industries to develop its list.
After issuing a profit warning last week, General Motors has suggested that it may phase out one of its weaker brands if sales fail to meet projections, company vice chairman Bob Lutz said on Wednesday. A Detroit News report described GM’s Buick and Pontiac as “damaged brands” due to lack of investment over the years, something that GM is working to correct with an array of new vehicles coming to market, Mr Lutz told a Morgan Stanley automotive conference in New York.
But if some of its brands fail to meet sales projections, “then we would have to take a look at a phase-out. I hope we don’t have to do that. What we’ve got to do is keep the brands we’ve got.” According to the report sales for both Pontiac and Buick have lagged in recent years.
(Texarkana/Tire Review) Roughly 1,000 people turned out for a union-organised rally supporting the 1,600 workers that went on strike nearly a week ago at Cooper Tire & Rubber Co.’s Texarkana, Arkansas plant. David Boone, union president, said the union’s executive committee received a 95 per cent backing in a vote granting the authority to call a strike.
The Hindu Business Line newspaper has given Apollo Tyres its ‘buy’ rating. Though the performance of the Indian tyre companies have not been overly impressive in recent quarters, the situation is likely to improve, the report added, suggesting that Budget proposals along with the price hikes effected in the past would have a positive impact on tyre companies’ earnings.
(Washington/Tire Review) The Associated Press has reported that the US trade deficit in 2004 hit a massive $665.9 billion – the largest in history, and 25.5 per cent higher than the previous record shortfall of $530.7 billion posted in 2003. The Commerce Department trade report noted that the trade deficit worsened as 2004 progressed, hitting $187.9 billion in the fourth quarter alone. That figure was a full 13.3 per cent higher than the third quarter of 2004.
(Akron/Tire Review) A report in the Detroit News says that SUV sales have dropped sharply as fuel prices in the US have continued to rise. The newspaper, citing a study by J.D. Power & Associates, said that full-size SUVs have been the hardest hit by the sales downturn. Sales of full-size SUVs were down 31 per cent in January and 21 per cent in February, according to the report.
Through February, sales of Chevy Suburbans were down 37.8 per cent, Hummer H2s were down 32.6 per cent, Ford Expedition sales fell 24.4 per cent and Toyota Sequoia sales were down 14.4 per cent, said the report. Still, some models showed increases, including the Nissan Armada (+33.5%), Dodge Durango (+17.3%), and the Cadillac Escalade ESV (+8.8%), the report noted. A Ford analyst quoted by the paper said, “Gas prices probably accelerated a trend already under way. The best days for those products (large SUVs) are behind us.”
Analysts, Goldman Sachs, have set Conti’s shares to ‘outperform.’ The “fair value” of the company’s shares is 70 euros, according to analysts, who expect the tyre manufacturer to improve its profit by 45 per cent in the next two years due to improvements in cost structures and its dominance in the fast growing ESC sector (electronic stability control). The analysts also report an improved performance by Conti in its tyre business and say that the manufacturer is not as dependent on raw material prices as its competitors. Profit per share is expected to reach 4.25 euros this year, increasing to 5.45 in 2006
Media reports are continuing to circulate about exactly where in Eastern Europe Hankook will make its proposed $500 million investment. Numerous previous reports have stated that the company is interested in manufacturing in this region, and that the shortlist has narrowed to two countries (Poland and Slovakia). Now a Polish newspaper has added further information. A Rzeczpospolita report suggests that the Korean company is leaning towards Slovakia because of a governmental policy offering “flat tax” incentives to foreign investors.
Western European car registrations for February could be down by as much as 2.7 per cent, according to a Deutsche Bank report. Preliminary figures from Polk Marketing Systems suggest a decline of 3.7 per cent year-on-year (-1.3 per cent year-to-date). The report singles out Renault (-12 per cent) and Fiat (-13 per cent) as having particularly bad months, while VW brand (-8 per cent) stayed inline with the average and Mercedes (-15 per cent) failed to improve from a weak January. On a brighter note, the analysts point new model releases for the from BMW brand (+36 per cent) and Porsche (+15 per cent) as examples of European names that are doing well.
Cooper Tire’s management is convinced that it can achieve a dramatic margin improvement. That’ the verdict Deutche Bank analysts gave after meeting with company’s top brass. Having said that, the report says the company is also realistic, not claiming to be able to achieve this overnight. According to the analysts’ report, the company doesn’t expect to achieve its 10 per cent target margin until after 2006, possibly 2007. In the second half of 2005, the analysts predict a “compelling trajectory” culminating in a 6-8 per cent EBIT margin in 2006. Furthermore, up to two margin points could be achieved by reducing scrap and plant inefficiencies. Pricing is likely to continue to rise, and eventually exceed raw material cost increases (potentially responsible for between 1.5 and 3 points of margin). the analysts add.
A report in the Korea Herald says that Kumho Tire Co expects to complete expansion at its tyre plant in Nanjing, China, in mid-April rather than at the end of 2005 as was previously thought. Originally the company had planned to quadruple production to 12.6 million units, the early conclusion of its plans could suggest that it has reduced this target. In addition, Kumho plans to break ground for a new $184 million tyre plant in Tianjin, China, its second in that city. Plans call for that plant to be on stream in 2007, Tire Review reports
The latest report to come from Research and Markets Ltd analyses the replacement van tyres industry.
The ‘Replacement Van Tyres Global Industry Guide,’ available now, includes information on market size and segmentation, textual analysis of the key trends and competitive landscape, and profiles of the leading companies.
WQOW-TV, a Wisconsin, US, news station has reported on how some American dealers are stockpiling tyres, Tire Review has reported. According to the report, which aired on 7 March, “retailers are treading on thin rubber. There is a shortage of tyres, especially large ones used for construction equipment and semi-trucks. Manufacturers say they haven’t seen demand this high since 1999. Many tyres are being shipped to Iraq and Afghanistan for building projects and China is using more on mining equipment.”
For the first time the Porsche Michelin Supercup will compete on Arabian soil, when it takes place in Bahrain from 1 to 3 April. The extra racing weekend, where no points for this year’s championship are awarded, came as an express wish from the Royal Palace as well as from the race organizer, the local Al-Bawaba news source reported. With 400 hp, a sequential six-speed gearbox and the Porsche Ceramic Composite Brake (PCCB), as well as sophisticated race aerodynamics, this GT3 Cup is the most powerful and at the same time the most challenging racing sportscar in the history of the Porsche Michelin Supercup, the report added.
Debica SA’s net profits went into freefall in the fourth quarter of 2004, falling 98.14 per cent. According to a Dow Jones report, the company, 59.9 per cent of which is owned by Goodyear, recorded operating profits of 1.1 million euros in the period ended 31 December 2004. This compares with 8.1 million euros the same time the previous year (down 86.42 per cent). Net profits were hit the hardest falling 98.14 per cent from 8.3 million euros in the last quarter of 2004 to only 154,653 euros in 2004. Quarterly sales were the least affected, falling 4.76 per cent from 79.9 million euros in the final quarter 2003 to 76.9 million in 2004.
The end of year profit crash also impacted the total year figures. Although the company’s sales grew 8.54 per cent in 2004, from 360.9 million euros in 2003 to 332.5 million in 2004. Operation profit and net profits fell 4.49 per cent and 13.48 per cent respectively.
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