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New Plan Aims To Make National Tyre Service Profitable Within Five Years

When Continental bought the UK retail chain National Tyre Service a decade ago, the company regarded its equity as a way of gaining a foothold in the market and increasing its market share. To put it simply, National was merely a vehicle for moving tyres. In the last few years, the German parent has realised the strategic importance and benefits of having its own chain and has re-thought its attitude. National turns over £150 m annually and it is no secret that the company has been making a loss over recent years but this, says Chief Executive Adrian Dunleavy, is due to change within the next five years, with the aim being profit and a sustainable market share. In an exclusive interview with TYRES & ACCESSORIES, Dunleavy discusses the details of the plan and the investment promised by Continental. He also gives frank answers to the critics of National’s “two tyres for the price of one” offer, who regard this as being responsible for today’s price cutting. And how does he respond to the widespread condemnation of the National Motor Dealer offer, which was designed to encourage motor dealers into the tyre business? The five-year plan requires time and investment and Continental have granted both. Dunleavy accepts that the pressure is on him to deliver results within the designated time frame.

7th December 2000/by Tyrepress Editors

Successful 1999 Year for ContiTech

The ContiTech division of Hanover-based Continental AG experienced the most successful business year of its history in 1999, according to the company.”The year 1999 marks a big step forward – in results, globalisation and concentration on core businesses”, was the way the year was summed up at a press conference by Manfred Wennemer, board member of Continental AG with responsibility for the ContiTech division and chairman of ContiTech Holding GmbH. In 1999 ContiTech increased its turnover to 1.72 billion Euro (previous year: 1.70 billion Euro), a plus of 0.7 p.c. This would have been about 2.5 p.c. but for changes in the contributing units,some of which were sold. Turnover per employee amounted to 112,000 Euro, approximately four per cent higher than the 107,000 Euro of 1998. In non-automotive sections the general economic situation led to some decline, but business with Europe’s car makers was approximately four per cent above the previous year’s level. The 1999 ContiTech turnover was made up about 64 p.c. in the automotive sector and 36 p.c. outside it. Operating profit (EBIT) also improved. The strong growth can be attributed, among other things, to a significant reduction in the extraordinary items and reserves for restructuring, which had depressed the 1998 result. On the contrary, the 1999 year saw one-off profits, especially from sales of individual segments. Wennemer emphasised that these positive effects on the results were caused by ContiTech’s restructuring measures. Read more in NEUE REIFENZEITUNG 5/2000.

7th December 2000/by Tyrepress Editors

Today “Only” A Tyre, Tomorrow A Measurement Tool?

The automotive business is moving more and more towards an “intelligent” chassis control or a “total chassis management”. In this scenario tyres are playing a role of growing importance. Today consumers and tyre manufacturers still focus on comfort, rolling resistance, handling etc. But what about tomorrow? Electronic sensors within the tyre will be able to supply additional information to the driver or to systems like ESP. For 20 years, the interaction between road and tyres has been studied at the University of Darmstadt and has for example led to the so-called “Darmstädter Tyre Sensor” or a special trailer for measurements concerning tyre noise emission. But in mid October – after events in 1996 and 1998 – this was also the place where the third “Reifenkolloquium” was held for international experts to discuss topics related to research and development in the tyre, wheel and related businesses. About 90 attendees were at the event this year. After an introductory speech entitled “The Tyre – Key Component For Driving Dynamics And Steering” another twelve lecturers followed. Divided into four sections “Tyre/Road Noise”, “Tyre Evaluation/Test”, “Models & Simulation” and “Sensors & Road Parameter Evaluation” they reported the recent results of their studies. Some of these, which are not too technical, are summarised in the November issue of NEUE REIFENZEITUNG.

7th December 2000/by Tyrepress Editors

First Quarter Results Of Michelin Better Than Expected

Michelin’s Q1 sales rose by 14.8% to 3.59 bn Euro; 464 m Euro more than for the same period last year. The EBIT level is, as expected, in the region of 10% of turnover.

7th December 2000/by Tyrepress Editors

Recall Burdens Ford Results

Ford Motor Company has suffered a reduced profit of 888 million US-$ in the third quarter, compared to the same period for 1999 (959 m). Ford Chairman Jacques Nasser attributes the results to the Firestone recall. To provide good tyres to Ford customers is more important than realising short term profits.

7th December 2000/by Tyrepress Editors

Goodyear Top Management Under Pressure

The sharp drop in prices of Goodyear shares over the past three months has put extreme pressure on Goodyear’s top management. Possible reasons for the drop include increased raw material costs and apprehension among shareholders that the Dunlop acquisition could have a negative impact on results in the year 2000.

7th December 2000/by Tyrepress Editors

Recommended By Analysts: Cooper Shares

In the USA, Cooper Tire & Rubber shares have seldom been so cheap. With the recent acquisitions, the market was not convinced that Cooper was running in the right direction, but after the first quarter’s good results, most have changed their opinions and are regarding Cooper with more optimism. An increasing number of experts are convinced that the Cooper management might use the low share price to buy back up to 10% of its own stock, which would have a positive effect. Apart from Cooper, Continental was the only other tyre and rubber manufacturer whose shares were tipped as a “buy” by analysts.

7th December 2000/by Tyrepress Editors

Recall Almost Completed For Bridgestone/Firestone

Bridgestone Firestone has announced that it has provided customers with 5.5 million P235/75R15 ATX, ATXII and some Wilderness AT tires in under four months of the recall process. The firm also advised that there are sufficient stocks of new tyres to replace the outstanding numbers of tyres under the recall – waiting lists in most areas have now been eliminated. It had originally been thought that it would take a full year to reach this stage in the recall. According to John Lampe , CEO at Bridgestone Firestone Inc., “No major automotive recall has achieved such significant results in so short a period (…). The next step is to determine the root causes of the problem that led to the recall.”

7th December 2000/by Tyrepress Editors

Winter Test/System Comparison 2000 – Winter Tyres are Indispensable

It has almost become a tradition by now: Once a year the German subsidiary of Japanese car manufacturer Mazda invites the trade press to a winter test/system comparison. The journalists attending in Saas Fee in the Swiss canton of Valais were asked to perform a number of driving tests under various conditions. The necessary winter tyres and know-how were provided by workshop partner Continental, and the computer-aided evaluation of the results of these practical tests was handled by representatives from TÜV Rheinland/Berlin-Brandenburg. The most important part of the workshop results was: On snow and ice winter tyres are absolutely indispensable! The tendencies worked out in theory were generally confirmed but, contrary to expectation, no significant difference in handling was discernible between front and rear drive. Similarly, the two front-driven vehicles – whether on TCS or ESP – ended up with nearly the same result. But brake tests with ABS did demonstrate the expected differences in the performance of winter and summer tyres, with the average traction quotient of 88 p.c. (winter tyre = 100 p.c.) for a front-driven summer tyre, however, considerably higher than the 76 p.c. estimated by the group.

7th December 2000/by Tyrepress Editors

Profit Expectations At VW Have To Be Reduced

According to the German magazine Stern VW has to reduce its profit expectations for the actual business year by 1.9 billion DM in comparison with its mid-term forecast. In February VW-boss Ferdinand Piëch already requested better results from subsidiary companies Audi, Seat and Skoda. Critics fear that the latest excursion into the luxury-segment (D1) will have a negative effect on the core business of VW.

7th December 2000/by Tyrepress Editors

Financial Markets Advise Care With Automotive Shares

There is unanimity amongst financial institutes that anyone with investments in automotive shares should be very careful of their investments. The coming quarter does not look too promising; BMW, Peugeot/Citroën, Porsche and Renault (particularly thanks to Nissan’s better than expected results), should hold their position, but there seems to be no end in sight to the decline at DaimlerChrysler.

7th December 2000/by Tyrepress Editors

The World of Wheels

The large manufacturers of car wheels, especially those cast of aluminium, are growing ever larger. Business is booming worldwide, but the financial results of most manufacturers in this field of activity are well below those achieved in other industries. Wheel manufacturers, on the one hand, suffer from the low ratings stock exchanges accord to car manufacturers and their suppliers, and on the other, because their products are regarded as “low tech”. But all the time big changes are taking place in the world of wheels – in the form of new technologies and an optimisation of existing products. New wheel technologies, however, are not the only decisive factor, another considerable influence is the car manufacturers’ aggressive pricing, well beyond what many a supplier can bear. Some wheel manufacturers focus their activities on the original equipment market in the belief that it will allow them to operate more cost-effectively. Others like to commit themselves to the refit markets because they think they can thus keep their ears closer to the market and be well-placed to offer car manufacturers superior development capability. Which way is the right one, or whether both can succeed – that is something we shall only know in a few years’ time. Of course the starting position is different from wheel manufacturer to wheel manufacturer and from car producer to car producer. In the comprehensive report in this and the following (April) issues we shall outline the trends in detail.

7th December 2000/by Tyrepress Editors

Better First Quarter Results For Pirelli

The Pirelli group has increased its turnover in the first quarter of this year by 18 p.c. The cable division achieved to a turnover of 1.05 billion Euro and an Operating Profit of 52 million Euro. The tyre division turnover increased by 12 p.c.up to 700 million Euro and the Operating Profit was 54 million Euro. Despite of fierce price competition Pirelli could achieve a 17 p.c. increase units and evidently win market shares.

7th December 2000/by Tyrepress Editors

Michelin Results 1999

Consolidated net sales of the Michelin group climbed to EUR 13.763 million in 1999. Successful areas were North America (+12%), Asia-Pacific, with the exception of Japan, (nearly +9%) and, despite economic problems, South America (+6%). Europe (+1%) remained stable.

7th December 2000/by Tyrepress Editors

Pirelli Reifenwerke: A Denial Denied

In its August issue NEUE REIFENZEITUNG reported that Pirelli had fallen behind with its plans for Germany, in parts by 20 p.c., and that the attraction of the Pirelli brand was on the wane, with price erosion as the consequence. Dr. Wentz, the Pirelli Reifenwerke boss, it was said, had to postpone his intended retirement, because G. Sala, his successor-designate, was unable to take up his post for health reasons. We also mentioned the possible return to Höchst of Dr. P. Masera as Pirelli Reifenwerke boss. Pirelli declared that Dr. Wentz would stay in office for several more years, and that there was no question of the Pirelli brand becoming less popular, rather the contrary. Results were good, we were told, Pirelli was doing very well in Germany and no redundancies were planned. One month later the head of the group, Tronchetti Provera, announced 2,800 job cuts for this year, 800 of them on the tyre side. In this context Milan made special mention of the significant price reduction in the winter tyre segment and in super-high-performance tyres, especially in the German market. In the meantime Dr. Masera has taken over as Chairman of the management. Dr. Wentz will leave Pirelli Reifenwerke by the end of the year but retain his seat on the board of Pirelli Deutschland AG and is also in line for a seat on the supervisory board.

7th December 1999/by Tyrepress Editors