Goodyear has now officially announced the ratification of the labour contract with the members of the Steelworkers, who have announced that they will be using this contract as a pattern for their negotiations with Goodyear’s competitors. However, this plan is more or less unpromising.
Although the fire at Bridgestone’s factory in Kuroiso City is now under control, the after-effects are only now becoming apparent. Production has been halted indefinitely until the extent of the damage has been assessed. Spokeswoman Setsuko Ozaki, quoted on the Automotive News website, said “we have no idea when production will resume or how big a blow the fire will have on our earnings, but with an incident this big, there’s bound to be some impact.” Analysts suggest any impact on earnings would be small, but this didn’t prevent Bridgestone shares falling seven per cent on the Tokyo Stock Exchange at one point, against a market that rose two per cent overall. Shares in rival tyre manufacturers Yokohama and Sumitomo Rubber Industries rose by more than five per cent.
Yokohama has cancelled the European launch of the Advan range of tyres, scheduled for the Frankfurt International Motor Show. The high performance brand may be introduced at a later date, but no details of if and when have been released.
While not one of the world’s giant tyre manufacturers, Kumho is in the top ten and the company realised some time ago that it needed to concentrate on its overseas activities if it were to grow, but this is easier said than done. There is no doubt that established brands have a terrific advantage – everybody knows their name and they have decades of history behind them. Of course, this has not been achieved overnight and is the result of many years of effort and considerable financial outlay and it is a daunting task for a comparative newcomer into a market to try to get its name known, especially when the target is a considerably shorter time frame than decades.
So the question is how to boost awareness in a number of diverse markets across the globe in a manner which makes economic sense? Different countries have differing cultures and tyre requirements, but Kumho realised that a common factor – and one popular in most countries – was that of motorsports. Thus it was that, in the 1990s, Kumho began to develop its involvement in international motorsports, in a strategy that was to become central to the worldwide marketing of the Kumho brand.
This strategy is by no means unique – after all, the Yokohama brand established a reputation for high performance in the UK after cars shod with its tyres won four consecutive British Touring Car championships from 1990 to 1993. However, the biggest pitfall in such a strategy is that, if you are going to go down the motorsports route, then you have to be sure that you are going to be good at it and you need implicit faith in the product. You also need to divert considerable resources towards R&D and to provide the technical back-up that so many motorsports events require nowadays – the tyre manufacturer has to do so much more than merely provide tyres.
This, then, was the route that Kumho decided to pursue and the quality of the racing product has been proved in competition over the years. Perhaps the highest-profile recognition came when Kumho ECSTA S700 tyres were adopted as the control tyre for the Formula 3 Euroseries, which is a series of 10 races, taking place in five different countries (Germany, France, Italy, Austria and The Netherlands).
Further recognition came in 2002, when Kumho signed a five year contract as the official tyre supplier to the Marlboro Masters of Formula 3, which brings together the best drivers from various European national championships. Last year Kumho was the control tyre for the first time and the lap record at Zandvoort in The Netherlands was broken – a dream start for the Korean company.
This year’s Marlboro Masters was contested by 49 drivers from 20 countries and for some of them (notably those from the British and Italian championships, which use another make of tyre) this was their first experience of racing on Kumho tyres. The race took place on a blisteringly-hot day at the Zandvoort track, attended by 55,000 spectators. Kumho branding was much in evidence and, indeed, the company has a very close association with the venue, having adopted a corner at the circuit in order to capitalise on the estimated TV audience of up to 800 million for last year’s event.
Yokohama Rubber is to introduce its Advan tyre brand into Europe for the first time at the forthcoming Frankfurt International Motor Show. The tyres on show will be run-flats and it is believed that Yokohama will market Advan as a high quality, high performance tyre for luxury cars, building up brand awareness by participation in motorsports events. Advan is an established brand in Japan and its only European exposure so far has been through OE fitment on imported vehicles.
The 2 billion Yen investment in production expansion in Yokohama Philippines (T&A website May 2003) is to go ahead after “a perceived improvement in the business climate of the Philippines” according to Takashi Sugimoto, managing director for overseas business. This follows the resolution of a court case involving a dispute between Yokohama and a trade union, decided in favour of the management. The dispute involved the laying off of 70 employees.
In South Africa, Yokohama is drastically cutting prices of passenger car tyres, by up to 26 per cent. The company says that this is because the Rand has strengthened against other currencies and is challenging competitors to reduce prices also. Yokohama has an estimated 2 per cent share of the South African market.
The Morgan Motor Company in the UK has chosen Yokohama A539 high performance tyres as OE fitment for its 4/4 and +8 sports cars. Tyre sizes are 195/60 R15 88H for the 4/4 and 205/60 R15 95V and 205/55 R16 93W for the +8. The design of the 4/4 has not been radically changed since its launch in 1936, featuring wooden frames, hand-made metal parts and a 1.8 litre engine. The +8 is a more powerful version, with a 3.9 litre engine.
Yokohama Rubber Co. has released its results for the fiscal year 2003, ending 31 March. Net sales rose 0.2 per cent to 400,448 million Yen (3.38 bn US$). Operating income was up 2.1 per cent to 23,184 million Yen ( $ 195.6 m), while net income rose sharply (by 37.8 per cent) to a record 10,144 million Yen ($ 85.6 m). Sales of the Tire Group accounted for 71.7 per cent of net sales and were up 1 per cent to 286,987 million Yen ($ 2.4 bn), with operating income up 10.8 per cent to 17,264 million Yen ($ 145.6 m).
Yokohama Tire Philippines Inc. (YTP), a car tyre manufacturing and marketing subsidiary of Yokohama Rubber, is to upgrade its facilities to boost production by 25 per cent by the end of the year. The upgrade, which will cost around two billion Yen (15.1 million Euros), will boost annual capacity from two million tyres to 2.5 million. Most of the increase will be in 16 inch and larger sizes and, by the year end, it is anticipated that these sizes will account for 30 per cent of production. YTP began produc tion in 1998 and has been profitable since year one. 90 per cent of production is exported to Europe, the Middle East and ASEAN countries.
Yokohama has announced a three layered strategy for developing the brand. The first move will be to increase the range of high performance products available from the company. The second will be to launch a new “global” range of products for truck and bus, and thirdly it will target increases in export levels. These three strategies will create the new approach to business recently announced by Yokohama. A company spokesman said, “The aim is to provide our clients, world-wide, with the highest quality products and services based on Yokohama’s own developments.” Yokohama hopes to reach net sales of 460,000 billion Yen within three years, an increase of 15 percent from this year’s figure. This aims for an operating profit of 35 billion Yen by 2005.
Yokohama Rubber has been rated by DaimlerChrysler as an A-grade supplier. The Japanese company was evaluated in the areas of Cost, Delivery, Quality and Communications and scored 92 out of a possible 100. Yokohama supplies its Geolandar H/T G038 for the Mercedes-Benz G500. Another company, AMG, which specialises in tuning up Mercedes-Benz vehicles, has chosen Yokohama’s AVS S/T type-1 as OE for the G55 AMG, which is a tuned-up version of the G Class SUV. Tyre size for both front and rear wheels is 285/55 R18 V.
Kumho Tire Company is the eleventh new tyre manufacturer to support the Tire Retread Information Bureau (TRIB). Other new tyre manufacturers who are currently TRIB members include Bridgestone/Firestone, Cooper, Dunlop, Goodyear, Hankook, Hercules, Kelly-Springfield, Michelin, Sumitomo and Yokohama. “We are very pleased that Kumho Tire Company has decided to support TRIB. They, along with our other new tyre manufacturer members, realise that TRIB’s efforts on behalf of retreading benefit the entire truck tyre industry,” said Harvey Brodsky, TRIB’s Managing Director. Brodsky said that TRIB is actively contacting all other new tyre manufacturers throughout the world with an invitation to join the Tire Retread Information Bureau.
Global economic factors presented Yokohama with a difficult year in 2001. The market was stable in Europe but the slowdown in US growth limited market development. The strong Japanese private sector capital investment was countered by a sluggish consumer market. However Yokohama still increased sales in the domestic market, though this was offset by a strong Yen which affected exports. Net sales dropped by 1.1 per cent in 2001 to 387.9 billion Yen (3,1 bn Euro). Cost reductions and improvements in efficiency raised operating income by 4.2% to 19.8 billion Yen (168,7 million Euro).
Yokohama Rubber is to mass-produce car tyres, using a new production system based on an idea from Fuji Seiko Co. Ltd. Yokohama is a member of a group of companies aiming to commercialise the system. Details of the system are not available but it is said to produce high precision tyres with low distortion and consistent quality. As well as Fuji Seiko, Yokohama has been working with Toyota Motor to evaluate the tyres.
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