Announcing its financial results for the first quarter of 2022, tyre maker and automotive technology firm Continental states that it “performed well” during the period despite “an increasingly turbulent market environment.” It describes its Q1 2022 tyre business as “strong.”
Although Russian tyre maker Voltyre-Prom recently spoke of potential opportunities arising from the war in Ukraine and related international implications, majority shareholder Titan International confirms it will not be investing in this business any time soon. Details of Titan’s relationship with the Russian operation were set out in the US-based firm’s 10-Q financial report for Q1 2022 and further commented on during a teleconference held on 3 May.
Results of a survey conducted on behalf of Kwik Fit suggest 69 per cent of motorists have changed their driving behaviour since the beginning of the year. Altered habits include cutting down on ‘non-essential’ car journeys, something 35 per cent of the 2,000 respondents admitted to doing. Drivers of petrol or diesel cars are almost twice as likely to cut down on such trips, with 40 per cent doing so as opposed to 22 per cent of electric vehicle (EV) drivers.
Due to several factors, Continental is adjusting its outlook for fiscal 2022. The company expects global production of passenger cars and light commercial vehicles to increase by between four and six per cent year-on-year in 2022, a lower rate than the six to nine per cent growth that the prior outlook (published 9 March 2022) was based on. Negative effects from cost inflation for key inputs, especially for oil-based raw materials as well as for energy and logistics for the Tires and ContiTech businesses, are also becoming significantly more material.
Although war continues to rage in Ukraine, German tyre maker Continental is once again producing in Russia. The reason the company gives for resuming tyre manufacture is duty of care for its Russian workforce.
With its acquisition of Trinseo’s rubber production plants in Schkopau, Germany late last year, Polish firm Synthos has also taken on the minority stake in Swiss start-up Tyre Recycling Solutions (TRS) that Trinseo held. It reports that its collaboration with TRS is now “progressing according to plan.”
While other tyre makers are distancing themselves from Russia and moving production capacities elsewhere at present, Titan International Inc.’s subsidiary in Volzhsky, Volgograd Oblast has announced plans to increase its production volumes. Voltyre-Prom, which is majority owned and managed by the Illinois, USA-based off-highway tyre specialist, states that the current situation “opens up new opportunities” for it to increase production volumes and sales.
Michelin hasn’t only halted its tyre production in and exports to Russia in response to the current situation in Ukraine. It has announced that the Michelin Guide team has suspended all restaurant recommendation activities in the country.
The latest EU sanctions against Russia will seriously affect Nokian Tyres and its business in Europe. The tyre maker says the sanctions will have a “significant impact” on its ability to manufacture tyres in Russia, which will reduce its ability to sell tyres in the EU, and within Central Europe in particular.
Together with its employees, VMI has raised 160,00 euros through a fundraising action and has donated this to Giro 555, the Dutch part of the global Emergency Appeals Alliance. The donation will be used to provide practical support to the Ukrainian people and those affected by the conflict.
UK new car registrations fell by 14.3 per cent to 243,479 units in March. Despite manufacturers reporting robust order books during the first quarter, the Society of Motor Manufacturers and Traders (SMMT) shares that ongoing supply chain shortages – especially of semiconductors – continued to squeeze supply during what is normally a busy ‘new plate’ month.
The war in Ukraine has brought “high uncertainty” to Nokian Tyres’ operational environment and manufacturing capacity, and as a result it is accelerating plans to invest in new production capacity in Europe. To help fund this capacity, the Board of Directors at Nokian tyres has decided to decrease the dividend payable for the 2021 financial year.
At the start of the year this column predicted a positive 2022 for the tyre business on the basis that we are better prepared for the unknown because of the adaptions made during the last few pandemic years. I still believe that. But my thesis is being tested by the implications of the now month-long war in Ukraine. All our expectations are being tested. For example, never before have I received an email which switches from normal editorial matters to “our country has been invaded” from one line to the next.
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