Truck Tyres
Continental AG plans to invest more than 250 million euro in building a new tyre production facility in Camacari (Bahia/Brazil) and expanding capacity in Malaysia with joint venture partner Sime Darby (car tyres in Alor Setar, truck tyres in Kuala Lumpur).
Michelin Americas Truck Tires and Goodyear Tire & Rubber Company have announced agreements with Pilot Travel Centers LLC, the largest truck stop network in North America, to begin supply Michelin, BFGoodrich and Goodyear truck tyres at its travel centres. Pilot Travel Centers is a leading interstate retailer, operating 264 travel centres coast-to-coast. The company operates its travel centres in 38 states. Goodyear will supply a variety of truck tyres for Pilot’s store network, including the G395 LHS steer tyre. The new Pilot Truck Care Centers will also feature a full line of Michelin and BFGoodrich tyres including the Michelin X One wide single tyre line.
Back in October, Cooper Tire & Rubber announced that Chinese manufacturer Hangzhou Zhongce would produce 300,000 radial medium truck tyres for the US company. Now Cooper has revealed that Hangzhou Zhongce is also to make one million passenger radials for the US market; these will be in six sizes under the brand names Cooper, Mastercraft, Dean and Starfire. Dick Stephens, president of Cooper’s Tire Group, said that the outsourcing will help Cooper meet growing demand, especially for the Zeon high performance lines. “By outsourcing some of our broadline products, we can devote more production capacity to the more exotic performance tyres,” commented Stephens, adding: “We have increased capacity at all of our US plants and these tyres from Hangzhou will help fill the gap between our capacity and projected demand.” The tyres will be manufactured to Cooper’s specifications and engineers are currently in China conducting audits to ensure the highest quality standards.
Toyo Tire & Rubber Co Ltd has announced its decision to build a new manufacturing plant in the United States for the production of passenger car and light truck tyres.
The Indian Government is to permit Michelin to import bus and truck radial tyres for wholesale trading on cash and carry basis until its joint venture with Apollo Tyres becomes operational. Michelin Apollo, 51 per cent owned by the French firm and 49 per cent by Apollo Tyres, will take about 20 months to begin production.
Demand for car tyres in China has grown by about one million units a year for the past four years, fuelled by growing vehicle production, which last year exceeded four million units. Demand for light truck tyres is even higher, at an estimated 25 million annually.
That Continental wants to manufacture tyres in China, has already been decided. The questions now are “Where” and “How”, so Continental executive committee Hans-Joachim Nikolin told the “Hannoversche Allgemeine Zeitung” (HAZ).
Through its quality monitoring process, Michelin has come to the conclusion that a limited number of tyres within this production range may present, under Australian conditions of use, a risk of reduced robustness in the crown area, which may lead to a rapid loss of air pressure. As a consequence of this the company is recalling 10,000 tyres manufactured at Michelin’s truck tyre factory in Thailand between January 2003 and September 2003. The designated tyre is the Michelin brand 295/80 R22.5 XZE2+ TL 152/148M.
Goodyear is to serve as Penske’s primary supplier of tyres in North America until at least 2008. Goodyear supplies Penske with a variety of truck tyres, including replacement and retreaded tyres. “We have developed an excellent supply relationship with the Penske team, and we are pleased to announce an extension of the agreement,” said Steve McClellan, Goodyear’s vice president of commercial tyre systems. In recognition of Goodyear’s past outstanding service, Penske named Goodyear as a Supplier of the Year.
According to American media reports Continental Tire North America will raise prices for its Continental, General and private brand passenger car and light truck tyres in February. Prices will increase from three to six per cent.
Cooper has expanded its Far Eastern presence with a joint venture with Taiwanese tyre manufacturer Kenda. The two companies will build a plant to make radial passenger and light truck tyres, which will be situated in the Jiangsu Province of the People’s Republic of China and jointly owned by the two manufacturers. Construction will begin in the middle of next year, with tyre production starting late 2005. The tyres will be aimed at markets outside China. Speaking of the deal, Cooper’s Thomas A. Dattilo said: “It will allow us to add capacity and lower costs in our tyre business. It also gives us a base for sales in China down the road as the Chinese market increases significantly over the next decade.”
The Goodyear Tire & Rubber Company announces that Freightliner LLC, North America’s largest manufacturer of heavy-duty trucks, has named Goodyear as its standard tyre supplier. Officials of Goodyear and Freightliner recently signed the agreement, and Freightliner has begun communicating this decision to its network of truck dealers. “Being awarded new business is a testament to what Goodyear offers, in terms of products, service and a network of commercial outlets. And having a customer like Freightliner choose Goodyear to be its standard tyre supplier really makes us proud,” said Steve McClellan, Goodyear’s vice president of commercial tyre systems. Goodyear is supplying a variety of truck tyres for Freightliner LLC’s various commercial vehicle needs. This includes supply to the company’s commercial vehicle brands Freightliner, Sterling, Western Star, American LaFrance and Thomas Built Buses.
The near 90 years old tyre manufacturer Cooper, has so far always been noticeable with two digit operational profits, has held its ground even after the rather difficult economic conditions in the United Stated after “September 11”. Whilst Cooper has been more or less in the doldrums during the first six months of the current year, the company again gathered way under the guidance of CEO Thomas A. Dattilo. Cooper could convince the market of the fact that this tyre and rubber company will find the way back to its old earning power. In the fourth quarter of 2002 there have been preferred sales because of announced price increases for 2003, so that the manufacturer was inevitably lagging behind its sales figures during the first months of this year. Since September however Cooper progresses again relatively steeply with light truck tyres. In particular, the last quarter showed strong upward tendencies. While the market grew by around four per cent, Cooper in turn created a growth of nine per cent by special arrangements with customers, so that up to the end of the year many arrears can be caught up. This at least is what Tom Dattilo explained to T&A in an interview at the SEMA show in Las Vegas.
Earlier this year it was clear that the CTNA (Continental Tires North America, previously General Tire) would again have to report a three-figure million loss. In the meantime it seeped through that this number is closer to 150 million Euro than “only” around 100 million Euro. This frighteningly high loss shows: In the European tyre business the company makes huge earnings and if the American losses have finally come to an end, the tyre section is not just strongest in turn-over (despite the expected next year’s higher growth in the Automotive business unit), but also the yield-strongest. Tyres still have good expectations in the company; among other things this assumption was underpinned by the majority purchase of the tyre business of the Malaysian company Sime Darby Berhad with two tyre factories with an already existing production capacity of four million passenger car, one million small truck as well as 300,000 heavy truck tyres.
Talking to T&A at the SEMA Show in Las Vegas, Manfred Wennemer (55) and Martien de Louw (57), who is responsible for Continental’s passenger car tyre unit as well as CTNA, affirmed that the American tyre business will reach break-even by the end of 2005. Wennemer specifies: “With the CTNA we will reach break-even in the last quarter of 2005 even though naturally we would be pleased, if we could reach it even earlier.”
Continental was not represented at the SEMA show with its own stand, unlike Bridgestone/ Firestone, Cooper, Goodyear, Michelin and Pirelli and other competitors, probably a cost-based decision. All too tragically this might not have been, because more important than meetings in the company’s booths at the show are meetings accompanying the SEMA show in the surrounding luxury hotels of the craziest city of the world. Martien de Louw and his executive team had invited the customers to an evening in the Mandalay Bay hotel, where hundreds of Continental’s “Best Friends” arrived. De Louw used this opportunity to present his complete executive team. Manfred Wennemer, who travelled to Las Vegas, too, was accessible “on the floor” for everyone, without pushing his colleague de Louw into the background. Optimism was noticeable in Las Vegas; but in order to see that the distance remaining to be covered remains rough and stony, requires no clairvoyance.
So far the acquisition of General Tire in 1987 has not been a success story. During this year the loss will amount to 100 million Euro at least. This has to be changed, according to Conti’s chairman Manfred Wennemer and Martin de Louw who is responsible for Continental’s passenger tyre division and works in the North American headquarters in Charlotte, North Carolina. The two set out the goal: during the last quarter of 2005 the break-even point has to be reached. Wennemer puts his hope in de Louw as a new member of the board. De Louw in his strategy focuses on new products, the extension of low cost production sites such as Mexico, and the persuasion of a multi-brand strategy that in turn is borne by the brands Continental and General Tire. For the replacement market Continental hopes for good business with the car dealers because the tyres with the prancing horse have been widely sold on the OE market during the last couple of years – there will be a pull-through effect. Wennemer states clearly that Continental will continue its business with truck tyres in North America because this division has always been very profitable.
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