default

 

       

Global Tire Industry Report- May 2018

We have just published the May issue of our global tire industry newsletter, and distributed it to subscribers.

This 37-page publication includes:

  • Why All-Season tires aren’t being fitted as OE
  • All the key news from the CRIA conference in Qingdao
  • Carbon black is going short
  • WBCSD to promote sustainable NR
  • Charts tracking imports of TBR, PCR tires to EU, US
  • Update to our top-20 tire makers
  • DoubleStar to take control of Kumho Tire – our analysis
  • Goodyear’s G159 – the worst tire in the world says Jalopnik

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.

See here: https://tireindustryresearch.com/global-tire-intelligence/

All-Season tires and dry grip

In March, the conference group TBM held a two-day meeting on Winter tires. A number of major themes came up in that discussion.

One of the most interesting is the compromises that tire designers have to make in order to gain a 3-peaks Mountain Snowflake (3PMSF) marking on what is essentially a Summer tire.

Sales of these European All-Season tires have accelerated since early 2015, when Pirelli introduced its Cinturato All-Season and Michelin introduced the CrossClimate. Prior to 2015, these All-Season tires took less than 4% of the European replacement market. By late 2017, that had increased to almost 7%.

Since then, and in response to the growing segment, all the main tire makers have introduced products in this category. Conti has the AllSeasonContact. Goodyear has the Vector 4Seasons in Generation 1 and 2 variants. Meanwhile, both Pirelli and Michelin have upgraded their flagship products in this segment.

These European All-Season tires should not be confused with American All-Season tires. They are closer to the American All-Weather category.

US-based All-Weather tires carry a snowflake symbol, which means they have passed a test related to the European 3PMSF test, but the US test is less severe.

In order to pass the 3PMSF test, tire designers have to compromise somewhere. For all the tire makers, that compromise is on dry braking. According to vehicle makers, a car fitted with European All-Seasons can take up to 44m to stop from 100kph, whereas a regular Summer tire will stop the vehicle in 35m.

On a good road, driving at high speed in Summer, this exposes the driver of the vehicle fitted with All-Seasons to danger, in the event of a sudden traffic jam. The vehicle can not stop as quickly as other vehicles involved in the incident, leading potentially to a collision.

While tire purchasers in the after-market make this decision themselves, OE suppliers are reluctant to fit All-Seasons, as it could expose them to litigation in the event of a collision.

We’ve looked at the market opportunities for these products, and the balance of price, convenience and safety of All-Seasons compared with a combination of dedicated Summer and Winter tires.

A-ratings for OE tires

A second subject raised at the TBM meeting was that of the transition from the New European Driving Cycle (NEDC) to the Worldwide Light Duty Vehicle Harmonised Test Procedure (WLTP). Although the reasoning is complicated, Luigi Orofino, Senior Manager at Fiat Chrysler for Fuel Consumption and Driveability appealed to all tire makers to make original equipment tires with an A-rating for fuel economy, and ideally, an A-A rating for both fuel economy and wet grip.

He said that the new rules, that come in from 2021 mean that each vehicle will have its own emissions rating. That rating will affect purchase price, as well as on-going taxation rates in many countries.

If the vehicle is fitted with anything but A-rated tires at OE, then the emissions rating will be damaged, leading to higher running costs for owners and greater penalties for vehicle makers.

For more on the All-season and Winter tire segment, read our monthly Global Tire Industry Intelligence report for May

All the news from the CRIA meeting in Qingdao

At the end of March, the China Rubber Industry Association (CRIA) held a major meeting in Qingdao. Our man in China was there and has presented a series of reports on the developing tire industry in China, with a series of ranking tables that describe the top tire makers and suppliers to the industry, as well as updates on the tire label; on restructuring and on environmental legislation.

To learn more about the tire industry in China, subscribe to our monthly global analysis.

Carbon black heading for a crisis

At a global meeting of the world’s carbon black experts in Chengdu in April, I spoke with many of the world’s top experts on the carbon black business. It’s hard to avoid the conclusion that carbon black is entering a period of shortage. Environmental constraints in the US, Europe, China and India have all contributed to a lack of new investment, as well as a reduction in capacity. Meanwhile demand from the tire sector has accelerated.

For the time being, carbon black makers are diverting some capacity away from the non-tire business to meet demand from the tire industry, but that can’t last forever.

Subscribers to our monthly report on the global tire industry can see the full analysis in our May issue, out now.

WBCSD to promote sustainable NR

The pressure on tire makers to source natural rubber (NR) only from sustainable sources is growing.

Already Michelin, Bridgestone, Pirelli, Continental and Goodyear have issued declarations that they will ensure their NR is not sourced as a result of de-forestation or involve human rights abuses.

GM has asked tire suppliers to ensure the sustainable sourcing of NR.

Now the World Business Council on Sustainable Development (WBCSD) is getting involved. Through the Tire Industry project (TIP), the group will set out its position on sustainable NR at the World Rubber Summit to be held in Sri Lanka in the second week of May.

From being a mere green-washing exercise, we hope that the TIP will now become something of a force for true sustainable development in this world. The signs are positive, there is a new project director, and the TIP is recruiting a new Communications and PR manager to raise the profile of the group that brings together the CEOs of 11 top tire makers.

More details and opinion in our global tire industry newsletter

Import-export data

We track imports of car and truck tires to both the EU and the United States. This month, ahead of the EU’s statements on its investigation into alleged dumping of TBR tires by Chinese exporters, there was a general expectation that imports of these products would fall from February onwards. They did not. However, in an unexpected development, imports from Taiwan jumped.

To get the full 3-year trend data, subscribe to our global tire industry newsletter

Double Star and Kumho Tire

So far as news reports go, it’s all gone quiet on the acquisition by Double Star Group of shares in Kumho Tire. Behind the scenes, there is a frenzy of activity. Kumho is in the middle of one of the most severe cost-cutting drives the industry has seen, as the creditors and existing shareholders seek to stabilise the losses and make the company solvent ahead of Double Star’s agreed acquisition of shares.

Readers should be in no doubt that Kumho remains in Korean hands for the time being. A deal has been agreed, but at this stage, Double Star owns no shares in Kumho Tire and has no management control. All the big decisions are being made by the creditors, driven by their overwhelming desire to make the company solvent before Double Star finally takes control.

In our latest newsletter, we have exclusives on the deep cuts being made at Kumho Tire and give our analysis of how these are being driven by the detail of the agreements between the various parties involved in the financial bail-out of Kumho Tire.

Want to know more? Subscribe to our global tire industry newsletter

Is Goodyear’s G159 the worst tire in the world?

We have been struck by the coverage given by motoring website Jalopnik to the case of Goodyear’s G159 tire sold into the US recreational vehicle (RV) market. It’s a fascinating read and some great journalism by Jalopnik writer, Ryan Felton

Want to know more? Subscribe to our global tire industry newsletter

Bragging rights

Last month we published the first listing of the top-20 tire makers in the world for 2018. This time around we have added new data from Linglong, Sailun and others, and given a comparison of EBIT (earnings before interest and tax) data for profitability. This gives a better measure of the operational result of tire makers. Previously we had used EBITDA (earnings before interest, tax, depreciation and amortisation), which ignores capital expenditures, and so gives a slightly distorted picture of actual operational profitability.

To learn more about the top tire makers in the world and their relative positioning by brand value, brand reputation as well as revenues, subscribe to our monthly global analysis.

China’s tire industry in April

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 list the top tire makers in China, and give some insights into the Chinese view of trade barriers, as well as tracking a number of factory upgrades, including Triangle’s announcement that its US project will definitely go forward.

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. 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. This means we offer information that you can trust.

Our only loyalty is to our readers. If we don’t deliver useful information, then we lose money. Simple. The fact is that we are delivering. We have a 100 percent renewal rate, as well as many new subscribers since we launched a year ago.

Each corporate licence covers all direct employees worldwide, and what’s more, we personalise the newsletter for your company.

Join the rest of the industry, including tire makers, tire wholesalers, upstream suppliers, corporate analysts, banks, financial institutions and others. Subscribe here: https://tireindustryresearch.com/global-tire-intelligence/

 

No comments yet.

Leave a Reply