We have just published the March issue of our global tire industry newsletter, and distributed it to subscribers.
This 33-page publication includes:
- A review of the annual results of the top tire makers with a ranking
- An analysis of the state of India’s tire market, along with data
- Trend data on imports of tires from China to the EU and US
- A review of Tire Tech, including interviews with key players
- Special analysis of Michelin’s wet mixing for S-SBR-silica masterbatch
And for good measure we have included our monthly update on the China Tire Industry.
Then there is a further 18 pages of news, covering the most-important news from across the global tire value chain including investments, appointments, legislation, statistics, Raw materials, company results, company information and environmental developments.
Bragging rights for top tire makers
During February, most of the top tire makers published their annual results. In the case of India where the financial year runs from April to March we have looked at the four quarters from Jan-December 2017. Because we do not have all the data yet, our numbers are still provisional, but the available data gives a good guide to the state of the industry in 2017.
Overall sales are up by around 6%, but profitability has fallen.
Globally all markets are up. As a result, total sales volumes have grown. At the same time, tire makers have increased selling prices. However, the raw materials impact of the first half of the year hit tire makers around the world and prices have not recovered enough to make up for the raw materials headwind.
Among the top tire makers, Yokohama reported an increase of over 20% in sales revenues, lifting it to 5th position in the table, fractionally ahead of Sumitomo.
Pirelli has dropped a couple of slots due to the re-stating of its figures after the spin-off of its truck tire activities. Its margins have also dropped, largely as a result of the costs associated with the IPO and other financial activities.
To learn more about the top tire makers in the world and their relative positioning, subscribe to our monthly global analysis.
India’s tire industry
Earlier in the month I visited New Delhi for a tremendous event organised by ATMA, the Automotive Tire Manufacturers’ Association of India. All the CEOs of India’s tire makers were there, and I managed to get a good idea of how the different businesses in India are developing and how the Indian and international tire makers are tackling the main challenges.
The tire business in India is changing as the Western companies recruit Indian nationals to run their Indian businesses. Meanwhile Indian companies are starting to develop their businesses beyond India’s borders. The more cautious are appealing to the Indian diaspora in the Middle East and elsewhere, but the signs are emerging of a more aggressive approach to the global tire industry.
In particular we are seeing the Westerners make tires that are suited to Indian conditions and develop business models specifically for India. This is a recognition that the Western business model does not work in every country of the world.
I found the visit fascinating and I hope that readers will learn a great deal about how things are developing in the sub-continent.
To learn more about how the Indian business is developing, subscribe to our monthly global analysis.
Imports from China
In our data section, we analyse the last three years of data covering imports of tires from China into the US and Europe.
It’s clear that imports of PCR tires to the US from China have plunged since the US introduced extra duties.
But this does not mean the tariffs have done anything to protect the domestic industry.
Total imports of PCR tires to the US are at similar levels to those in 2015, with aggregate imports from SE Asia marginally higher than they were in 2015. Essentially the tires are still being imported from Chinese companies, but the centre of manufacture has moved from China to SE Asia.
Even more concerning, is that these factories are modern, sophisticated and the Chinese tire makers have recruited non-Chinese consultants to help them make better tires.
In our view, the mid-term impact of those extra duties from the US on China-made tires have made the Chinese tire makers much more competitive.
Meanwhile, the chaos over TBR volumes to the US have stabilised after the pricing chaos a year ago
We’re tracking the imports of TBR tires to the EU-28 from China. Data was only available up to November, but the signs are that the warnings of tariffs have led to reduced volumes. Next month we expect to get the December and maybe the January data. It will be interesting to see how the trends are developing.
Tire Tech Expo
As many readers know, I have been helping the team at Tire Technology Expo with the Strategy and Management conference at Tire Tech. Tire Tech closed a week ago and we’ve rushed to put together a report.
This year, the Strategy and Management stream was very well attended, showing that our message about change in this industry is getting through. My own presentation there (previewed in last month’s edition) was well-received. Other presentations laid out some of the ideas behind the forthcoming changes.
In particular I spoke to Harjeev Khandari who later this month will launch a new data-driven tire retail model in Spain called Cartyzen. Harjeev is a very smart man, who is also a fourth-generation tire entrepreneur. He is one of the people who will change this industry.
I also had a long conversation with the new management at Black Donuts and we outline how that company is changing to respond to the needs of the tire industry globally. We talked about the differences between the large legacy companies and the newer, more nimble entrants to the business and how they can change their thinking. Another fascinating conversation.
We also noted that the increasing trend for functionalised S-SBR is driving internal mixer technology to (and maybe beyond) its limits as the different chemical reactions need to be balanced at the right temperatures.
This led on to another fascinating area:
Michelin’s Silica-S-SBR masterbatching
One of the hottest topics during my conversations at Tire Tech was news that Michelin has commercialised its wet-mixing process to make bales of masterbatch of perfectly-dispersed silica in S-SBR.
Michelin has extended its latex-carbon black wet mixing process – now producing Michelin’s proprietary Carbion masterbatch at its Hat Yai, Thailand factory – to encompass solution-SBR and silica mixed in the solution phase.
A senior Michelin executive told us that the game-changing innovation started as a pilot project at Michelin’s high-tech synthetic rubber factory in Bassens, France. The process has now been perfected and the pilot unit expanded into a production-scale facility to serve Michelin in Europe.
Since then, the company has added a similar unit to its ASRL plant in Louisville Kentucky and is now finalising a unit at its Michelin-controlled synthetic rubber JV in Cilegon, Indonesia.
That will give the company global coverage at facilities all controlled by Michelin, as a way to minimise intellectual-property leaks.
We were the first to reveal Michelin’s Carbion process for wet mixing carbon black with NR latex, and discuss benefits such as a 25% improvement in tread wear as well as substantial improvements in strength and also improved rolling resistance.
Now, we exclusively reveal Michelin’s capabilities and discuss how they intend to use this new masterbatch material to change the game in tire manufacture. Michelin’s PR organisation did not respond to our requests for clarification – always a sure sign that we have hit the target with yet more deep insights into their internal activities.
This information is available exclusively in our March 2018 edition of our monthly report on the global tire industry
China’s tire industry in February
As a final bonus, we have added our widely-praised summary of tire activity in China. This has become the industry’s go-to publication to understand the changes taking place in China’s tire industry.
This month we are clarifying a number of rumours that have emerged about Linglong and other participants in the last few days, as well as looking forward to a better business environment in the second half of 2018.
Want to know more? Subscribe to our global tire industry newsletter
Background to the newsletter
We’ve migrated all of our highly-regarded analyses of key aspects of the global tire industry to this newsletter, and added news from around the world.
The aim is to offer a clear, unbiassed path through the massive amount of information you can get on the global tire industry. Each month our editors scour the world’s news and pick only the stories that are relevant to change in the industry. Then we write a brief, easy-to-digest together with links to the original source for those who need deep-dive detail.
You can download the full contents from here.
We are encouraged by the industry reaction since its launch a year ago, our subscribers are getting the full analyses on these and other matters. We have a 100 percent renewal rate, as well as many new subscribers. Can you afford to be without it?
Because of the popularity of the publication, we are able to offer it at an affordable price, and to move away from an advertising-supported model. Each corporate licence covers all direct employees worldwide, and what’s more, we personalise the newsletter for your company.
Subscribe here: https://tireindustryresearch.com/global-tire-intelligence/