Truck Tyres
The latest J.D. Power customer survey concerns heavy truck tyres as original equipment. Respondents rated tyres for safety, durability, tread life and overall value. Michelin came out on top, closely followed by Bridgestone, although Bridgestone customers reported the fewest problems per 100 tyres. According to the report, the biggest problems associated with tyres are excessive or uneven tread wear and blowouts.
Continental took the next step in developing their truck tyre strategy for the future when the company launched the HSR1 a regional traffic, steering axle truck tyre. The HSR1 development follows on from an ongoing market research campaign linked to technological development. This has identified the need for varying qualities in the tyres used for regional and long distance haulage – the HSR1 addresses those needs. The HSR1, as a steering axle tire, has been developed to offer two large gains in performance, the first in lower noise levels, the next in an increase treadwear performance, offering extended lifespan of the original tread by up to 40 per cent. Examples on show at the launch suggested that it could be possible to extend mileage by as much as 52 per cent over current expected performance of the HSR. The new generation of truck tyres also includes the HDR, a regional drive axle tyre, and the HTR trailer tyre. The HSR1 is part of a larger picture, in a move to offer a complete package to the haulier which not only offers better tyre performance, but greater economy though increased loads and potentially greater carrying capacity over an extended period. In an understanding of the importance of good quality casings to the retreader, especially given Continental’s co-operation with Bandag, Continental has incorporated its patented tread groove into the HSR1 which helps prevent stones from becoming lodged in the tread, thus preserving the casing for potential retreading. However, there is much more involved in the launch of the HSR1 than just another tyre. The HSR1 launch has been used to highlight Continental’s expectations for the future. We consider the impact of the latest technology on the future developments in Continental’s truck tyre division.
Last year Continental did not perform as well as its managers expected: unprofitable commercial tyre division, failed ContiTech sale, heavy losses in the North American tyre business unit. Then, in September there were the changes at top management level: Dr. Stephan Kessel quit, Manfred Wennemer replaced him. He announced – immediately after assuming the responsibility – some wider restructuring measures. “All parts of the company are under scrutiny, and there are no holy cows”, he emphasised. Following this statement we heard the announcement of closures like the factories in Traiskirchen/Austria or in Herstal/Belgium. However, there has been a commitment to the commercial tyre business and to activities in North America, although the target is clear: a return back to profitability. New high mileage truck tyres like the HSR 1 (also featured in NEUE REIFENZEITUNG) are a first step in the commercial tyre business. With an increasing marketing budget and new tyres for the North American market, Dr. Ulrich Wellen, new President and CEO at Continental Tire North America since the beginning of this year, holds out hope for a turnaround in the USA too.
This is a short extract. Tyrepress and Tyres & Accessories subscribers can log in below to read the full article.
If you are not yet a Tyrepress or Tyres & Accessories subscriber, you can change that here.
Becoming a member has benefits such as:
IMST GmbH (Kamp-Lintfort/Germany) and Automotive Technology NOLEX AG (St. Motitz/Switzerland) claim its jointly developed Tire Pressure Control (TPC) system to be a highlight of its own booth at the CeBIT computer show in Hanover. According to IMST the system is the first equipment of this kind for passenger car and truck tyres with bi-directional communication. In contrast to the current systems this allows to read out directly the sensors inside the tyres, giving the opportunity to receive the actual pressure situation at a touch of a button – independently of automatic intervals. This new system is a one-antenna-only design, which can reduce the time needed for installation. Due to the special housing design with a variable docking to the valve the tyre module can – as IMST and NOLEX say – be used for every wheel form without mechanical adjustments. It is ready to operate world-wide by only small amendments. TPC also opens up the possibility to combine tyre pressure control with keyless entry with the pressure data transmitted to the remote control key when opening the car.
In 2001, the Michelin corporation generated a world-wide turnover of 15.775 billion Euro (+2.5% compared to 2000) and an operating profit of 1.04 billion Euro (-10.5% compared to 2000), thus showing a net profit of 314 million Euro (-28.4% compared to 2000). Under difficult economic circumstances world-wide, Michelin’s two main competitors, Bridgestone and Goodyear, could not even get close to Michelin’s operating profit, which corresponds to 6.6% of turnover. Bridgestone is still suffering from the consequences of the Firestone tyre recall in the USA, in 2000, and Goodyear has shown a loss for 2001. During a press conference at the end of February in Paris, Michelin’s COO, Edouard Michelin, clarified the course of business events during the last year, and Michel Rollier, Chief Financial Officer, offered a detailed view on the corporation’s figures. For the very first time, the corporation answered questions during a big press conference (other conferences were held in London and New York), and mentioned turnover and profit figures for the individual divisions.
Michelin has warned its customers and distributors in Europe to beware of truck tyres being offered at extraordinarily low prices. These are believed to be the result of VAT fraud and Michelin is working with customs authorities and police across Europe. Investigations have already identified organised criminal networks and, as a result, a number of VAT frauds have been broken up. Michelin is concerned at potential harm to its truck tyre image and to its distributor network and it asks customers to be aware of complicity should they make illegal purchases from these criminal networks.
Michelin achieved a 2.8 per cent growth in sales for the first quarter of 2001, compared to the same period last year. The passenger car divisions in Europe and the USA were successful, selling more UHP tyres than ever before and improving the mix. Obviously, price increases are sticking, with the exception of truck tyres in the USA. Michelin has announced a cost reduction plan for the US, designed to save around 125 million Euro. Despite a sharp fall in EBIT, Deutsche Bank analysts confirmed Michelin shares as a “buy”.
In a difficult environment Bridgestone/Firestone was able to sell in the first half of 2001 more units than in the first half of the year 2000. Managing Director Günter Unterhauser confirmed that, in the first half of this year, his company sold 4 per cent more passenger car tyres and 6 per cent more truck tyres while the market in general fell by 2 per cent and 4 per cent respectively. The increases in motor cycle tyres (plus 29 per cent) and agricultural tyres (plus 29 per cent) were significantly higher. In the EM-Segment Bridgestone sold as many tyres as in the first half of 2000 while the market shrank by 10 per cent. Due to several good test results the management is very confident for the winter season and is convinced that turnover for the year as a whole will be at least 10 per cent higher than the previous year. Operating results are in line with expectations and the management said that it is quite satisfied.
In a precautionary move, Michelin is recalling 55,000 truck tyres manufactured in Italy and sold in Japan between October 1999 and March this year. There have been no accidents but a change in design to the steel cord used in the sidewall has reduced the tyres’ resistance to over-inflation that could lead to rupturing of the sidewall.
The French group has achieved a rise of 4.5 per cent in the first half of 2001, compared to the same period last year, and now has a turnover of 7710 million Euro, but the EBIT has fallen 9 per cent to 491 million Euro. Analysts had been expecting a slightly better result. As a prominent supplier of truck tyres, Michelin is suffering under the very bad market conditions prevailing in the US. Not only did the OE market fall, but – and this was unexpected – so did the replacement market, and the company cannot foresee any improvements in the US market for the second half of the year. Michelin as a group did not sell as many tyres as expected, as a result of the Fiestone recall, but the trend towards premium brands (the so-called “flight to quality”) still exists. The Michelin brand has sold a lot more tyres than in previous years, which gives the group much better margins. The return on sales for the whole year should be between 6.2 and 6.8 per cent – some months ago, 7.7 to 8.3 per cent was expected. Perhaps there might be some more good news for Michelin if Firestone and General were forced to recall more tyres.
Tyre manufacturer Continental and the Moscow Tyre plant have signed a memorandum of understanding which says that Continental will gradually acquire a majority stake in the Russian tyre plant. The company plans to invest 43 million US-Dollars within the next three years, in order to modernise production at the plant and to supply passenger car and light truck tyres of the company’s Continental, Gislaved and Barum brands to the local Russian market.
Reports from financial and industry analysts generally agree that the tyre industry, among others, is facing a difficult time with market conditions having worsened recently. Despite this, the Deutsche Bank AG, London is recommending Michelin shares as a “buy”, even though the organisation is downgrading its 2001 profits forecast for the French manufacturer by 3%.
European Bandag licensees will retread Continental truck tyres using the latter’s tread patterns, using Bandag’s Cold Retreading Process. The tyres will be distributed through the Continental dealer network as well as by Bandag licensees. The initial volume will be around 60,000, rising to 180,000 pieces per year. The agreement does not include any financial links, nor does it include the hot retreading process which Continental operates with other producers in Europe under the “Contire” brand.
Following the recent shake-up of its UK truck tyre operations, Continental has announced a “strategic agreement” with wholesaler Kings Road Tyres, whereby KRT will become the sole distributor of Uniroyal truck tyres in the UK and Ireland, effective September 1st. The new business will be separate from KRT’s wholesale operation and will be called “Uniroyal Truck Tyres.” Uniroyal car and van tyres are unaffected by the agreement and will still be managed by Continental.
Uniroyal is well-known for passenger and truck tyres. Now the brand, part of the Continental group, is trading under the name Uniroyal Agro in the agricultural tyre segment also. The exclusive distributor in Germany is Meyer Lissendorf, and negotiations are on-going regarding distribution in other European countries.
If you would like the latest news from the Chinese tyre industry in Chinese, visit our partner site TyrepressChina.com. Or click below to continue on Tyrepress.
