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MMS Annual Poll 2000/2001: German Tyre Retailers Have Missed Their Targets

In the German tyre retailing business, the mood has swung towards the negative side over the last year. This is the main result of an annual poll carried out by the Marketing + Management-Systeme (MMS) among 2,400 German tyre retailers. According to the MMS-report, 80 percent of tyre retailers have been disappointed in their economic expectations. Among the co-operation members this is even higher at 85 percent. The main reason for the depressed mood has been the disaster of the winter tyre business in 2000 and there is no sign of any compensation in the form of new business activities. For 80 percent of the companies questioned, their central goal is to improve their service quality during this year. One year ago 30 percent of the retailers had stated that their expectations had been more than fulfilled, for 49 percent the expectations had been fulfilled. This time there are just three percent for whom the expectations have been more than fulfilled and another 17 percent who had achieved their aims. The most serious problem is the high quantity of winter tyres in stock. They block the capacities for the coming summer tyre season and cost a lot of time and money. First calculations are that 28 percent of the winter tyres have been not sold, which means a volume of five million units. With an average worth of 85 DM this adds up to an amount of approximately 400 million DM up to 425 million DM.

30th November 2001/by Tyrepress Editors

Car Fleet Business

The car fleet servicing market in the UK is a very tough business. The size of this segment become evident looking at new car registrations in the UK last year, 57% of more than two millions were fleet vehicles. In absolute figures the German market surpasses the British, but the proportion of fleet cars is less. The potential is enormous: Industry sources say that the average fleet car needs 1.8 tyres replaced a year, which gives a total market of 9 million tyres in Germany. And it should be remembered that fleet cars are normally newer than the average, travel more miles per year and fitment rates of winter tyres are higher than for private cars. A fleet service provider knows how much he has to pay for tyres per mile. It should be routine to ask whether the fleet has the right cars and the most suitable tyres, but could another model of car be more appropriate to the needs of the fleet because of how it is used? Car fleets need a mobile fitting network wherever the cars are driving. The tyre dealer carrying out the service on behalf of a leasing company must know the state of the tyres, has to ensure that they are at the correct pressure, has to identify the reasons for unbalanced abrasion patterns and has to fit the car with winter tyres before the first snowflakes fall. Whoever wants to participate in the growing market segment of car fleets has to be fully professional – and he has to invest money. For example, an integral component of car leasing or full service fleet management systems is the use of the Internet. All those involved in the package use the Internet as a communication platform and they want to reduce the costs for the fleet parc. Customers are very interested in quality; the package they anticipate is more than “only” good tyres. Car fleet servicing might be an opportunity, but not a cheap one.

30th November 2001/by Tyrepress Editors

Good Second Quarter Results From Nokian

Nokian Tyres has reported its Q2 results, which proved better than analysts expected. While sales were as forecast (up 11.7 per cent to 95 million Euro), operating income was much higher than predicted at 8.5 million Euro, with an operating margin of 8.9 per cent (last year, 3.5 per cent). Results were helped by the 1.9 million Euro operating profit recorded by the Vianor retail chain. Analysts are cautious about the outlook for the second half of the year, with much depending on winter tyre sales.

30th November 2001/by Tyrepress Editors

Car Servicing As An Opportunity For Tyre Retailers

The disastrous sales of winter tyres in Germany at the end of last year have shown at least one thing: hope has no place in the calculations of business administration, and whoever has not yet understood that will have no future in this business. All the hand wringing of the tyre retailers does not help in this situation. Considering declining gross yields and the many new distribution channels for tyres, tyre retailers are forced to diversify and widen their service offers in order to compensate for loss of profit. One example of how this can be achieved is car servicing, which brings in gross yields between 40 and 50 per cent on average. A lot of business members have long ago realised this fact and extended their range of service offers. So car servicing is no longer a question of “if” but of “how”. The differences between the service offers and the quality of tyre retailers engaged in car servicing are huge. They range from the traditional Fast-Fit-Sector, covering the classical elements (exhausts, brakes and shock absorbers) to the fully equipped and professional working car repair station, offering every kind of car servicing. In this issue of NEUE REIFENZEITUNG the present level of involvement of German tyre retailers in the car servicing business will be explained and described, including some examples.

30th November 2001/by Tyrepress Editors

The Retreading Of Truck Tyres

Whereas the incidence of car tyre retreading is slowly diminishing (in summer tyres this segment is virtually insignificant, in winter tyres market shares are falling dramatically and are approaching the ten percent mark), truck tyre retreading seems to be stable across Europe. But there are significant national differences especially regarding the incidence of retreading and the relationship between new tyres and retreads. Looking back over the last decade, not from the technological viewpoint but at the main players and their market shares, it was (before Michelin’s Recamic came on the scene) the Marangoni group (including Ellerbrock), which showed most growth. Kraiburg also showed positive development but the world’s no 1 in cold retreading Bandag showed signs of stagnation. If these three players have improved, strengthened or defended their market shares then there must also be losers, these being the new tyre producers who supplied the retreaders with materials for their business but especially the hot retreading. The four big players in the European truck tyre market (Michelin, Goodyear, Bridgestone, Continental) have tied up packages which should be regarded by the retreading specialists (like Bandag, Marangoni/Ellerbrock, Kraiburg) with some discomfort because the result is a lessening of their influence. New tyre manufacturers, retreaders and dealers find themselves as part of a package. The importance of retreaded truck tyres grows, while the importance of retreaders shrinks. The retreaded truck tyre is an integrated part of a very complex marketing concept. The retread is another item in a customer relation program, a marketing instrument, which is designed to lead to the sale of the next new tyre.

30th November 2001/by Tyrepress Editors

Winter-Workshop 2000 With Michelin

At the end of November Michelin invited motor journalists to a so-called “Winter Workshop” at the “Arctic Driving Centre” near Rovaniemi (Finland). The main topic of the event was of course the capabilities of winter tyres. Despite the very mild climate at the end of last year the tyre industry expects that with 18.4 million winter tyres, sales will reach a new record this season in Germany: Based on this Michelin says that customers will spend some three million DM for new tyres and service. As well as such basic market data, the Winter Workshop gave those present the chance to check out the advantages of modern winter tyres. To illustrate this the tyre manufacturer had prepared four different sections, focusing on influences on winter performance such as the tread depth, the age of the tyre and the tyre speed index and dimension. All in all, 24 combinations were tested and more than 50 journalists driving the test cars led to a great number of – sometimes astonishing – results, and the data allowed the establishment of average values for each section. Michelin says that the results of the workshop will have a bearing on future developments and the criteria for choosing the right tyre. Learn more about this in the January edition of NEUE REIFENZEITUNG.

30th November 2001/by Tyrepress Editors

Turnover Up, Profits Down – Nokian’s First Quarter Figures

Nokian’s net sales in the first three months were up 18.4% over last year’s figures, reaching 67 million Euros (1999 Q1: 57 million Euros). Operating profit was -4.4 m Euros (2.7 m Euros). Manufacturing made a profit of 2.9 m Euros (5.8 m Euros) while the retail chain made a loss of -6 m Euros (-2.9 m Euros).

7th December 2000/by Tyrepress Editors

Flagship Brands From Cooper-Avon At Reifen 2000

Cooper-Avon Tyres Limited will be exhibiting a number of flagship products from both its Avon and Cooper brands at the “Reifen 2000” international exhibition in Essen, Germany from 20-23 June. For the motorcycle market the company will be unveiling for the first time the “Azaro” with Avon’s variable belt density (VBD) technology. Furthermore two new winter tyres – “CR75″ and CR85” – will make their debuts at the show as well as the new 4×4 tyre named “Ranger H”.

7th December 2000/by Tyrepress Editors

Turnover Of Passenger Car Tyres Increase

As the 14th annual meeting of the German tyre dealers association announced, the turnover of passenger car tyres increased 44 p.c. over the previous year. Responsible for this positive development was the winter tyre segment which increased 14.8 p.c. to 17 million pieces. In spring 2000 43 percent of all passenger cars had been equipped with winter tyres. This year the association expects – in contradiction to the positive prognosis – a stagnant market. Reason: the bad results in the passenger car sector during the first months of this year.

7th December 2000/by Tyrepress Editors

Mitas Buys Trelleborg Motorcycle Tyre Business

Czech tyre manufacturer Mitas is to purchase the motorcycle tyre manufacturing business from Trelleborg. The purchase (the price of which was not revealed) includes the license of the trade mark ‘Trelleborg’ and increases the Mitas motorcycle tyre portfolio by 15 designs in 57 sizes.

7th December 2000/by Tyrepress Editors

New winter tyres from Uniroyal

Uniroyal is entering the forthcoming winter with two new winter tyres. The Uniroyal MS plus 5 is a comfortable winter tyre optimised for wet, wintry weather and developed for vehicles of the compact and the middle class, whereas the Uniroyal MS plus 55 sets new standards for fast, powerful cars with regard to aquaplaning resistance, grip in snow and ice as well as handling in the wet. Both types of tyre have a modern silica tread compound, which makes it possible to minimise the conflict between performance in the wet and on snow and ice. With 12 available sizes (Q- and T-rated), the new MS plus 5 covers about 75 per cent of this market segment. The new MS plus 55 Uniroyal is available in 13 sizes, with speed ratings T (up to 190 kph) and H (up to 210 kph). Thus, the wet-weather specialist is already covering the majority of market demands with the sizes in the launch programme. The new tyres have rounded-off tread blocks with slanted circumferential grooves to ensure faster water displacement. Wide, shoulder transverse grooves ultimately drain the water from the contact patch. In combination with a large amount of natural rubber, the new silica formula provides a distinct improvement in the wet-weather performance of the new winter tyres from the rain tyre company. Find out more in NEUE REIFENZEITUNG 10/2000.

7th December 2000/by Tyrepress Editors

Winter Test/System Comparison 2000 – Winter Tyres are Indispensable

It has almost become a tradition by now: Once a year the German subsidiary of Japanese car manufacturer Mazda invites the trade press to a winter test/system comparison. The journalists attending in Saas Fee in the Swiss canton of Valais were asked to perform a number of driving tests under various conditions. The necessary winter tyres and know-how were provided by workshop partner Continental, and the computer-aided evaluation of the results of these practical tests was handled by representatives from TÜV Rheinland/Berlin-Brandenburg. The most important part of the workshop results was: On snow and ice winter tyres are absolutely indispensable! The tendencies worked out in theory were generally confirmed but, contrary to expectation, no significant difference in handling was discernible between front and rear drive. Similarly, the two front-driven vehicles – whether on TCS or ESP – ended up with nearly the same result. But brake tests with ABS did demonstrate the expected differences in the performance of winter and summer tyres, with the average traction quotient of 88 p.c. (winter tyre = 100 p.c.) for a front-driven summer tyre, however, considerably higher than the 76 p.c. estimated by the group.

7th December 2000/by Tyrepress Editors

Half Year Results For Michelin Confirm Disappointment

Michelin has released its financial results for the first half of the year, confirming the disappointing message given earlier. Turnover was 7,377 m Euro (first half of 1999: 6,488) and operating profit 540 m Euro (596). Increased raw material costs and a weak Euro were blamed as contributing factors, but Michelin says that the results do not fully reflect progress made in increasing competitiveness.

7th December 2000/by Tyrepress Editors

Nokian To Produce Commercial Tyres In The USA

Finnish tyre manufacturer Nokian has confirmed that the company intends to produce commercial tyres in the USA as soon as possible. The first products will be forest tyres, followed by industrial tyres. A spokesman for Nokian said that it had not yet been decided whether the company would build its own factory in the USA, whether there would be some kind of joint venture co-operation, or whether tyres would be manufactured in an off-take agreement. The Finnish company has been active in the US and Canadian markets for some years.

7th December 2000/by Tyrepress Editors

Winter Tyre For Scooters

At the INTERMOT – the international exhibition for motorcycles in Munich – the German Tyre Manufacturer Reifenwerk Heidenau has introduced a winter tyre for Scooters. For higher grip under winter conditions, the so-called “Snowtex” features textile fibres in the tread which emerge from the rubber surface after 300 to 600 kilometres driving. Therefore Heidenau suggests changing to winter tyres some weeks before the cold part of the year begins.

7th December 2000/by Tyrepress Editors