Russia
Financial analysts are reporting that Nokian Tyres’ recent fiscal results exceeded expectations. According to one Deutsche Bank note the Finnish manufacturer achieved further quarter net sales and EBIT 10 and 11 per cent above consensus respectively. The driver for the strong performance is said to have been the company’s was Car Tyres division, as growth in Russia once again surprised, growing by almost 100 per cent.
Amtel-Vredestein N.V. has confirmed that talks regarding cooperation in Russia with Germany’s Continental AG have been suspended.
The company further announced that it will consider opportunities to reduce its debt including attracting equity participation in, or spinning off, its AV-TO subsidiary, Russia’s leading auto parts tyre distributor and number one tyre retail centres network.
Germany’s Frankfurter Allgemeine newspaper had previously published the comments of an unnamed member of Continental AG’s board, who said that the “deal has died for now.”
Although the Indian tyre market is mainly characterised by its strong growth, it still is a market that is relatively self-sufficient. India still imports tyres, and the volume of imports is forever growing. Nevertheless, the import market still accounts for less than three per cent of the total, although decreasing tariffs and duties over the coming years will certainly facilitate tyre imports. But the question remains why Goodyear and Bridgestone remain the only foreign tyre manufacturers to have established their own production base in India – despite all the talk about how important the Indian market, as part of the so-called emerging BRIC states (Brazil, Russia, India and China), is considered to be.
The fifth China International Tire Expo, (CITExpo) is being held in Shanghai this September. Since the first exhibition was held in 2003 the CITExpo has grown rapidly and strengthened its position as one of Asia’s leading tyre events. The exhibition’s organisers, Reliable International Exhibition Services, report that this year’s upcoming event shows every sign of being another record breaking year. From the exhibition’s inception until 2006 the CITExpo was held solely in the west wing of the Shanghai Everbright Convention & Exhibition Center in the city centre, but this year the increased number of exhibitors has meant that the centre’s east hall has also been needed.
A major marketing campaign is underway to attract visitors from around the world to this year’s Brityrex International 07 show at the G-MEX Exhibition Centre in Manchester. More than 60,000 free entry tickets to the exhibition are being distributed throughout the UK tyre industry and to professionals around the world. Each exhibitor at May’s show also has the opportunity of taking hundreds of tickets to attract their own customers and contacts to the event.
The rising demand for winter tyres across Europe has been reflected in sales figures released by Continental AG. Worldwide sales of Conti’s winter tyres reached 19.1 million in last year, an 8 per cent increase on 2005 sales and 41 per cent more than in 2002.
According to research conducted by Continental, this increasing demand has been primarily fuelled by the public becoming more widely aware of the safety issues related to winter driving. Changes to German road traffic regulations have also had an influence on sales.
In the words of Continental AG Chairman of the Board (and head of Passenger and Light Truck Tire division) Manfred Wennemer “This fifth consecutive record result confirms the correctness of our approach in this attractive segment and is reassuring for the coming years, since it can be attributed to growth in several markets. In Europe these are predominantly Germany, Russia and Eastern Europe as a whole, but they also include Italy, Holland and Belgium.“ Mr. Wennemer added that Continental is also pleased with market developments in North America.
Michelin has signed the first OE deal for its Davydovo plant near Moscow. The plant, which opened in the summer of 2004, will produce two sizes of tyre as original equipment for models of the Ford Focus built in Ford’s Vsevolozhsk factory near St Petersburg.
Sibur tyres may soon be available at your local independent garage or tyre fitter. Russia’s largest tyremaker is preparing to launch its push into the UK market at the Brityrex International 2007 show in May.
Sibur-Russian Tyres (SRT) is a large manufacturer in a large country. As Russia’s largest producer of agricultural tyres, SRT claims to supply 70 per cent of the vast domestic market. But domestic supply is only part of the SRT story. In recent years the volume of OTR tyres exported has also increased to upwards of half a million units, and the company predicts that for 2006 OTR exports will account for 50 per cent of production.
Headquartered in Johnstown, Ohio and founded in 1939, Tech International is a family business that describes itself as the world’s leading producer of tyre and tube repairs and wheel service solutions. According to the official literature, the company markets more than 5,000 products into over 110 countries throughout the world and is recognized as one of the top exporters in the United States.
The history of the Triangle Tyre Co. Ltd goes back three decades, when the Weihai Tire Factory opened a plant in Weihai, Shandong Province, China. In 1997 it changed its name and began trading as Triangle Tyre Co; part of the Triangle Group of companies. Since then the company has grown rapidly and it is now aiming at nothing less than being a top 10 player in the global tyre market.
Triangle is currently one of the top 500 companies in China and employs 6,300 staff. Depending on which criteria you use, Triangle is the 12th, 13th or 14th largest tyre manufacturer in the world – not bad for such a young company. The turnover last year was US$980 million and has risen by 50 per cent in the past three years.
Fresh from the success of pre-selling over 1 million winter tyres by August this year, Deldo has announced plans to further its interaction with the UK market, arranging to meet clients at next May’s Brityrex trade show. Tyres & Accessories contacted Deldo marketing manager, Rutger Veerman, and also learnt that the company and its key Chinese manufacturing partner, South China Tire & Rubber Company Ltd (Guangzhou) is investing in improving product production.
To get an idea of the scale of Deldo’s operation you need only look at the company’s annual turnover. In recent years Deldo have achieved an annual growth rate of approximately 10 per cent. Wanli remains Deldo’s best selling budget product, with a range of 160 (in 2007) passenger, light truck, SUV, 4×4 and truck tyres. Deldo is likely to sell 2 million Wanli products this year.
An investment of about 500 million euros (£340 million) into a new tyre factory is a clear statement of the future direction of a company. Hankook’s decision to invest in Central Europe rather than the US, Korea or China shows what an important role the European market plays in Hankook’s future growth and development strategy. The new factory, which will be built in the Hungarian city of Dunaujvaros, not only provides the company with missing production capacity close to important sales markets and cheap but highly-skilled workforce, but also goes far beyond the obvious, Seung Hwa Suh, president of Hankook’s European headquarters in Germany, says in an interview with Tyres & Accessories. There are three keywords that Mr Suh frequently uses to describe Hankook’s strategy for Europe and the rest of the world: quality/innovation, service and brand awareness.
With six months to go before Brityrex International opens its doors, the exhibition is shaping up nicely, with over 67 per cent of floor space already sold, say the organisers, ECI International. And never before has the “International” part of the show’s name been more appropriate, as companies from all over the world will be making tracks for Manchester’s G-MEX Exhibition Centre next May. ECI International managing director Paul Farrant is delighted with progress to date, saying: “Past Brityrex exhibitions have always had a large number of exhibitors from the UK, and indeed the 2007 show is no exception, but we are seeing an increasing number of overseas companies taking space.”
Some analysts have responded positively to a Nokian’s announcement that it has launched the second stage of its Russian plant. Deutsche Bank reported that the warehouse “raises delivery capacity while the mixing department improves the process and should hence save some cost given that the compounds have been imported from Finland thus far.” The analysts reported that production is on track and progress is in line with previous suggestions that the factory will be able to produce four million tyres in 2008.
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