Honda is to reduce the numbers of components sourced in the UK. The ultimate aim is to have a 50/50 split between UK and mainland European-produced components (the current ratio is 75/25). Suppliers have also been asked to be “more competitive”. Currency fluctuations and the weak Euro were blamed for the move.
Dunlop Tyres UK announced today that it will cease truck tyre manufacturing at its Birmingham factory. 650 jobs from a total workforce of 1,700 will be affected. Car, light truck, motor sport and racing tyres will still be made at the plant. Dunlop says the move is part of a Europe-wide rationalisation process as a result of excess capacity in the European tyre industry and the current market situation.
In the UK, Michelin and cement manufacturer Blue Circle Industries have set up a joint venture company to prepare scrap tyres for burning in BCI’s cement kilns. Called Sapphire Energy Recovery, the company will prepare up to 200,000 tonnes of car and truck tyres a year for burning. BCI aims to make eventual energy savings of £6 million by replacing part of its coal and coke requirements with shredded tyres.
It has been announced that Mr S McDonald has been appointed Managing Director of Goodyear UK, with additional responsibilities for the Goodyear/Dunlop integration in the UK. This appointment is part of an extensive series of strategic management changes within the company’s European Union organisation, all of which, will take immediate effect.
The subject of scrap tyres is one which continues to exercise the minds of all sectors of the tyre industry and, with a ban on landfilling of tyres imminent, alternative methods of disposal are being urgently sought. The UK Government has produced a number of reports on the subject and these are looked into as part of our feature on scrap tyre disposal. Also included are details of possible disposal methods and machinery as well as latest news on the subject, for example the temporary closure and planned refurbishment of the SITA tyres-to-energy power station in the Midlands. Those disposing of tyres are under increasing pressure; not only to find new outlets to take scrap, but also from steep rises in overheads such as fuel. The problem of scrap tyres affects the industry from top to bottom and most observers expect the Government to introduce some method of producer responsibility if the industry does not come up with its own solution in the near future.
There are rumours that an unnamed rival from continental Europe is to make a takeover bid for Finelist, the UK-based distributor of car components. Finelist has 40,000 trade customers and, during the last financial year, made pre-tax profits of £26.3 m (Euro 43.6 m) on a turnover of £483 m (Euro 801 m).
In the UK, Michelin has carried out a survey of attitudes to tyre pressures. 83 per cent agreed that correct tyre inflation is important to safety and 88 per cent related correct pressure to fuel economy. However, 50 per cent check their pressures monthly, 30 per cent rely on services for pressure checks and 5 per cent “never check” tyre pressures.
Two Continental-owned UK wholesalers, Viking Express and Birkenshaw International, have merged to form Viking International. The new company is one of the UK’s largest wholesalers and will operate from twelve warehouses across the country. In charge is Alan Revie, who was MD of Birkenshaw, and he will be assisted by Grahame Rooke, who held a similar role with Viking. There will be no redundancies among the 260-strong workforce. The decision to merge was taken by Continental in Germany and was implemented very quickly, although the two companies have experience of working together, for example as suppliers to the tyre expert programme. Alan Revie is keen to point out that the merger is not the result of panic, nor is it a defensive measure, as both companies were successful in their own right. Instead it is a conscious attempt to create a single force to give a better service to customers. The merger is effective immediately, although it will obviously take time to sort out new livery and new signage. More details are available in the April issue of TYRES & ACCESSORIES.
Avon Tyres’ new Azaro II motorcycle tyre performed well in a series of tests conducted by Motor Cycle News, the UK’s leading bike newspaper. Seven brands were tested on six different motorcycles and the Azaro was placed first or second in these.
Michelin has embarked on a major new marketing programme that is designed to further enhance their position as the leading tyre brand in the UK. The campaign involves a series of television commercials using the catchphrase ‘Show me the logo’ which will centre around customers demanding the Michelin brand when purchasing tyres.The campaign will be supported through dealership promotion.
Perhaps as a backlash following the BMW/Rover situation, and aided by lower prices for Mercedes and Audi, UK sales of BMW cars fell 20% in April. Sales of Rover cars rose 500% as Rover and its dealers acted to clear stocks because of the uncertain situation.
In June, Michelin UK appointed Thierry Martin as Commercial Director – Truck and, in an exclusive interview with TYRES & ACCESSORIES, he spelled out the latest efforts of Michelin to woo customers in the competitive truck tyre market. The emphasis has switched from merely supplying product to providing a comprehensive service for customers. A good example is the Michelin Euro Assist breakdown programme, where customers with tyre problems in any of 17 countries across Europe can dial one number for 24-hour help. Today’s service advisors aim to significantly cut costs for customers across the total package and double digit savings are not uncommon. Michelin’s technical advisors monitor maintenance and diagnose problems in order that the customer gets optimum usage from his tyres. Of course, in a fixed-price contract, increasing tyre life benefits the manufacturer too. The importance of the service element was underlined when Michelin won the contract to supply tyres to Transamerica Trailer Leasing (which has 21,000 trailers in its European fleet) for the next five years. The clinching argument was not the price, but the availability of service and back-up across Europe. Michelin has extended its Michelin Business Advantage (MBA) scheme, originally aimed at car tyre customers, to truck tyre buyers. MBA is a scheme whereby independent customers and Michelin sit down together to discuss how they can work together to improve the service on offer to customers, thereby benefiting all three parties. This leads to what Thierry Martin describes as “a win, win, win situation.”
Avon Rubber, British supplier of components for the automotive industry and not to be mixed up with the tyre manufacturer Avon, has released a profit warning. Due to pricing pressure and the strong British Pound the company will probably not achieve the profits expected. Experts think that Avon Rubber is too small for a global market, while the company itself recently blamed falling car production in the UK for the drop in annual profits.
After the recent run of bad news in the UK car industry, there was good news when Vauxhall announced it was to invest £189 m in its British manufacturing operation, creating an estimated 500 jobs.
The UK consumer motoring magazine Auto Express recently put ten tyre brands through a series of wet and dry braking and handling tests. Continental’s PremiumContact came out on top, followed by the Vredestein Sportrac and Goodyear’s Eagle Ventura.
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