Focus on Tyres

SPECIAL REPORT
Focus on Tyres
5 May 2011
THE INTERNATIONAL SHOW OF ALL EQUIPMENT FOR ALL VEHICLES
Tyres at EQUIP AUTO:
20%
of visitors to EQUIP AUTO 2009 say they are
interested in the tyre sector
MAJOR ACCOUNTS THAT VISITED THE SHOW IN 2009 INCLUDED
AUTO MAKERS
Ford France
Honda
Jaguar Land Rover France
Mazda
Mercedes Benz
Mitsibishi Motor
Nissan,
PSA
Renault
Toyota Europa
Volkswagen FrancE
AUTO centres
DISTRIBUTORS /
SPECIALISTS
INSURANCE
Delko Developpement Delko
Euromaster
Eurotyres
Feu Vert
First Stop
Master Pneu
Profil Plus
CENTRAL PURCHASERS,
FLEETS
VEHICLE INSPECTION
Autovision
Dekra
Maxauto
Midas
Norauto
Roady
Speedy
E-COMMERCE
TYRE SUPPLIERS
Alliapur
Careco
Allo Pneus
Planète Pneu
TYRE RECOVERY
Bridgestone
Continental
Coopers Tyres
Goodyear/Dunlop
Michelin
Pirelli France
Matmut
3 Suisses Entreprises
Aéroport de Paris
Auchan / Mulliez
Brinks
C&C Achats
Carrefour International
Dalkia
Fenwick
France Télécom
La Poste
Lactalis
Leclerc
Ministère de la Défense
Services essences des Armées
Still
Véolia...
RENTALS
Arval
Fraikin
Six car
AC NEGOCE
AISIN
AS DESIGN
BOSCH
CLIMAIR PLAVA KUNSTSTOFFE
CONFON
CONTICLUB
CONTITECH FRANCE
COPADEX
DELDO AUTOBANDEN
DELPHI
DISTRICASH
DOUMERC PNEUS INTERNATIONAL
DQN DU QUESNE
EURAWHEELS
EUROTYRE BV
FEBI BILSTEIN
FORT PNEUS
FRANCE RECYCLAGE
PNEUMATIQUES
GEDORE
GORECKI
GUERNET COMPRESSEURS
HEUVER TYRE
HUTCHINSON
IMAGINE CAR
INTER-SPRINT BANDEN BV
JAP DISTRIBUTION
KYOTO JAPAN TYRE
MC GARD DEUTSCHLAND
PEWAG SCHNEEKETTEN
PICOYA
POLAIRE
POINT S
PROPNEU07ZR
RASEC RETAIL
RECORD
REIFEN UND RAEDER
SAILUN TYRES
SAPHORE EQUIPEMENTS
SCHAEFFLER
SILIGOM
SOCAH DIVISION PNEUMATIQUES
THULE
TYKOMP
TYRE 24
VALEO
ZF TRADING...
A non-exhaustive list of brands at the show:
BF Goodrich, Bridgestone, Cheyen, Continental, Cooper, Deestone, Dextero, Dunlop, Duro,
Eurotyre, Falken, Federal, Firestone, Fortuna, General Tire, Goodyear, GT Radial, GT Tyres,
Hankook, Infinity, Interstate, Jinyo, Kléber, Kumho, Lassa, Linglong, Matador, Maxtrec, Maxxis,
Michelin, Minerva, Mitsutomo, Nexen, Nokian, Ovation, Pas, Petlas, Pirelli, Rockstone, Rotalla, Rotex,
Sonar, Starfire, Techking, Toyo, Trackmax, Trayal, Triangle, Uniroyal, Vee Rubber, Vredestein, Wanli,
West Lake, Wind Power...
List as of 28 April 2011
SELECTED EXHIBITORS WHO WILL BE AT EQUIP AUTO IN 2011
About EQUIP AUTO 2011
The international show for all automotive suppliers, EQUIP AUTO has become a major hub for manufacturers, dealers and
repairers seeking new products, services and partners. It is organised by Comexposium with its shareholder partners: the
French Automotive Equipment Industries Association (FIEV) and the French Industrial Body-building Federation (FFC). In
2011, the show expects some 96,000 visitors (including 30% from other countries) and 1,800 exhibitors in all sectors (75%
from other countries).
P 2 - EQUIP AUTO 2011
THE FIRST SPECIAL REPORT FOR EQUIP AUTO 2011
TYRES:
A LOW-PROFILE TECHNOLOGY
The tyre market is highly competitive and is facing a number of challenges, not
least of which are the increase in raw material prices and the recurrent problem of
winter tyre shortages. The profession is eagerly awaiting the introduction of obligatory
labelling which, with its rating system for rolling resistance, wet traction and noise
levels, will reinstate technological arguments as central communication themes.
Reflecting the emerging technologies and issues that are of general concern to the
sector, EQUIP AUTO, staged this autumn from 11 to 15 October, has, from the
outset, featured a dedicated tyre section. It offers all visitors, dealers, specialised
auto centres and repairers the technical solutions and services that best meet the
changing needs of the market.
With best practice, information sources, and fresh insights into industry issues, EQUIP
AUTO aims to help automotive professionals across-the-board to take an in-depth
look at their industry, engage in a quality discussion with exhibitors and partners and
to seek practical answers to the range of issues affecting their sector.
EQUIP AUTO 2011 - P 3
SAFETY AND ECODRIVING: TWO BIG ASSETS FOR TYRES
Tyres are black, round and dirty. Not sexy, not
glamorous… “Yet they are fundamental for
road safety”, says Claude Cham, President
of EQUIP AUTO, President of FIEV and
former CEO of Dunlop France. “They are
the only car parts that are actually in contact
with the road and are constantly mistreated,
notably by kerb impact and uneven road
surfaces”. Another key argument is that tyres
are strategic in manufacturers’ bids to reduce
fuel consumption and CO2 emissions. “New
tyres that offer less rolling resistance than
traditional products reduce consumption by
10 to 20% depending on driving style”, insists
Cham. Yet, while auto makers attach great
importance to their tyre suppliers for OE, as they
have to meet the stringent demands of the EU,
customers see things very differently. Reluctant
to change tyres, they regularly wait to pick up
a flat or a knock before doing so. Their main
concern is price. “France is one of the toughest
markets in Europe”, says Frédéric Schilling,
Marketing Director at Goodyear France. “Its
product mix is one of the poorest in Europe
and distribution is tightly organized”. The sole
consolation is that the country is catching up,
and posting double-digit growth for WYZ* sizes
for sports cars and the UHP** category for 4X4.
*WYZ:speed ratings (ZR = over 149 mph, W = 168 mph, Y = 186 mph)
**UHP: Ultra-high Performance
FIGURES BACK TO PRE-CRISIS LEVELS
In terms of volumes, the market was relatively
upbeat in 2010 with an 8% rise. However, in
a historical perspective, the figure only really
reflects a return to normal, i.e. the situation
prior to the 2008/2009 crisis. In fact volumes
are globally stable, if we discount the HGV, farm
vehicle and civil engineering sectors where the
economy bites deeper. In terms of volume the
market is shared in three relatively equal parts
by tyre dealers (38.7%), car dealers (33.4%) and
auto centres (27.9 %), given that it is the auto
makers’ own networks that get the best value
deal. “They have made a big effort on tyres”,
recognizes Maurice Garnier of the trade
association Les Pros du Pneu. Renault
communicates on the subject, especially on
its Website, where it features partner brands
(Bridgestone, Continental, Dunlop, Goodyear,
Michelin, Pirelli, and its own brand Motrio).
P 4 - EQUIP AUTO 2011
However it is open season on prices that have
been showing a downward trend in all channels
and for practically all sizes. There is now no
shortage of attractive sources for price-conscious
customers, with special offers displayed on the
Internet, especially by specialized Websites.
in
+8%
2010
THE IMPACT OF RAW MATERIAL COSTS
However, a change is on its way. The continuing,
spectacular rise in raw material prices (natural
gum, synthetic rubber, carbon black and oil) is
sure to find its way through to the end consumer.
Till now, manufacturers have managed to contain
prices by increasing productivity. Here, Claude
Cham President of EQUIP AUTO (formerly with
dunlop) points out that continuous progress in
production helped to bring down cost prices,
despite the technical complexity that goes into
the product. Moreover, manufacturers buy their
materials well in advance. Michelin has already
announced average increases of 7.5% for
motorized two-wheelers and civil engineering
plant, 7% for Hgvs, 5% for private cars and
4% for farm vehicles. The rises are due to kick
in between 1 March and 1 June. “The trend
for 2011 is likely to be a rise of 10% to 15%”,
forecasts Frédéric Schilling of goodyear. The
brand bases its prediction on an in-house metric
(cMAI) that adds up various commodity prices,
including rubber, which rose by 20% in Q4 2010,
and has multiplied fourfold since 2008. Tyre
retailers are sending out the same message.
Point s is already talking about a 13% to 17%
rise in April and May and is expecting a second,
and even a third phase hike in the course of
the year. Imagine Car* Marketing Director,
Raphaël Kohon adds: “the price differential
between the different segments (Premium,
medium, eco, low-budget) will work in favour of
end consumers with a far smaller gap in prices
between the different brands on the market”.
* Imagine Car distributes the following brands: BF Goodrich,
Bridgestone, Cheyen, Continental, Dextero, Dunlop, Firestone, Goodyear,
GT Tyres, Hankook, Kléber, Michelin, Nexen, Pirelli and Uniroyal.
CAN WE EXPECT A SHORTAGE?
The worst may be still to come, as some
observers are readily saying that tyres will be
“the new petroleum”. so, in addition to the
expected hike in tyre prices, some experts
are also forecasting a shortage. The reason
for this is quite simply the growing demand in
emerging countries, in Europe and beyond.
The constantly rising vehicle head count in
these countries means that more tyres are
going to auto makers, with fewer left over for
the aftermarket. “The phenomenon is not new,
reassures Maurice Garnier of Pros du Pneu
(formerly with continental-Uniroyal). Auto makers
are first in the pecking order. However, it is true
that tyre makers have closed down a number
of sites in Europe and relocated to low-cost
countries, and JIT production is now the norm”.
The shortage is no chimera. Point s has taken
the precaution of committing to ordering volumes
from manufacturers in order to get priority
service and have more safety stock. Members of
some networks see the existence of a secured,
internal platform as guaranteeing procurement.
ANTICIPATING ON WINTER TO PRODUCE BETTER
Another issue affecting not only the French but
also the wider European market is a chronic
shortage of winter tyres. This has become
painfully obvious over the last two winters, which,
it is true, were hard. The problem stems from
the fact that winter tyres are produced between
May and October, essentially in summer.
Manufacturers base their production runs on
seasonal averages, and if it turns out that here
aren’t enough tyres to go round, it is hard to go on
stream again for want of moulds. “Production is
not flexible”, acknowledges Frédéric Schilling
of goodyear. Tyre makers are also criticized
for refusing to stockpile in order to shore up
profit margins. Ultimately it lies with retailers to
be perspicacious in their procurement policy,
forecasting adequate volumes for a consumer
purchasing season that lasts from October to
January. consumers should also plan for the
outlay and not wait till the first snowflakes fall
before hurrying to the nearest outlet. This is
why the Pros du Pneu trade association has
launched a campaign reminding motorists that
the time to change tyres is when temperatures
fall to 7°c. Finding room to store unused tyres
should become less dissuasive to winter tyre
purchasing as some dealers are now offering
tyre storage services that include identifying
and storing tyres for the 6-month season in
optimal conditions. It is worth noting that the
winter tyre market has shown stronger growth
in France (+ 30%) than in the rest of Europe (+
20%), but still only accounts for 10% of sales in
France, whereas in germany, winter tyres have
been mandatory since 2006 and sales outstrip
those of summer tyres. so, what is the answer?
goodyear has been focusing on its Four seasons
range, with sales rising constantly in germany.
EQUIP AUTO 2011 - P 5
OBLIGATORY LABELLING RAISES EXPECTATIONS
The business environment may be difficult but
there is a break in the clouds. Tyre makers (at least
those who play in the premium arena) are l o o k i n g
forward to the introduction of mandatory
labelling. due to enter force in July 2012
for new tyres and then in november for
all products, this will bring in a ranking
system just like those used in domestic
appliances and auto insurance
bonus-malus schemes. Tyres will be
rated for their performance in rolling
resistance, wet traction and noise
levels. This is a plus point, because
we will be talking more about
technology than prices. “It will be
good news for consumers who will
be able to make more objective
distinctions and realize the
advantages of premium brands”,
enthuses Christophe Rollet at
Point S. “some customers want
more than price”, says Maurice
Garnier of Pros du Pneu. “For example, they
want to get more mileage or hear more about safety.
This is something that will enter sales pitches”.
goodyear, one of the makers involved in drawing
up the requirements for the new labelling, is not
concealing its satisfaction. “It is easy to make tyres
that have less rolling resistance”, explains Frédéric
Schilling. “On the other hand, making eco-friendly
tyres that are safer and last longer is something
else”. However, Raphaël Kohon of Imagine car
is quick to point out that “apart from the
premium brands that already
have to produce tyres that meet
specific performance criteria,
import brands will also have to
fully satisfy the new regulations”.
Hence Imagine’s decision to
develop a plan of selection criteria
“based on investments in r&d and
on the development of new product
lines that Imagine car will be offering
professionals in 2012”. Its ambition
is clearly to clarify the market and
help consumers to select a product
recognized for its complexity and that
offer efficiency which is not merely a
matter of design. However, labelling will
not solve everything, firstly because the
certification procedure is cumbersome
and complex, and secondly because
it is still unclear what changes may be made to
the legislation after the scheduled review in 2016.
Manufacturers apparently recognise that the best
tests are those organized by the press.
TYRES INTERACT
Tyres work in close conjunction with a number of
parts and sub-assemblies, including the suspension,
braking and steering systems. Auto makers are
clearly focusing on these interactions. The best
example is EsP (renamed Esc for Electronic
stability control by the European commission)
which acts on road grip by analysing 25 times per
second whether the trajectory actually followed by
the vehicle really is the one intended by the driver.
This system, a development of ABs, is based on
sensors linked to the wheel. Manufacturers are
working closely with system suppliers. Thus Michelin
has already worked with Bosch. In 2012/2013,
Pirelli is set to launch the cybertire, a smart tyre
that it is developing with the help of Brembo and
Magneti Marelli. It can “read” the road, deduce the
grip quality on the road and, like EsP, for example,
interact with the car’s sensors. Aisin, Bosch and
delphi are working on technologies that make the
chassis more active, by optimising the road grip
delivered by the tyre. This technology is also taking
industrial vehicles by storm, driven by ArvinMeritor,
heir to the knowhow of Meritor Automotive in
braking and that has benefitted from the advanced
active safety technologies developed in the Meritor
wABcO joint venture. Looking ahead, the wheel
too may become active and combine several
functions. For example, Michelin’s Active wheel has
a built-in electric wheel that combines propulsion,
braking and suspension functions. However, over
and above this technical progress, the after-sales
P 6 - EQUIP AUTO 2011
sector is a hive of activity. This is true in braking
with the pads and disks. Here too valeo is coming
up with innovations, with “sports” disk brakes or
brakes with built-in ball bearings. we should also
remember components like wheel bearings which,
as at schaeffler, are now interfacing with ABs and
EsP sensors. In the field of suspension, dampers
also contribute to driving precision. delphi offers
pneumatic or hydraulic products on the aftermarket,
with the latest technologies derived from the OE
systems that also contribute to improving comfort
and safety. In this field, it is interesting to see that
Bosch and zF, who are OEM partners, have also
signed an agreement for the aftermarket. Thus,
the products developed by zF services (including
dampers and suspension parts) are integrated
into the information software used by the Bosch
EsI workshops, enabling repairers to
have access to a vast catalogue in
just one click. On
both the OEM
and aftersales
markets,
suspension,
braking and road
grip systems offer
plenty of potential
and outlets.
A DIVERSIFIED SERVICES OFFERING
In just a few years, tyre status has slipped
from high-margin product to loss leader. The
sector is increasingly competitive, notably with
the arrival of new players and the development
of on-line e-commerce sites. Tyre specialists,
aware of these changes, adapt by diversifying
their activities and offering new services.
“Our business is about more than buying
and selling tyres. We must take on board the
dimension of consumer expectations for car
maintenance and help our dealers to offer
comprehensive solutions. We cannot afford to
sacrifice quality in our products and many of
our customers see us today as advisers and
sales promoters”, underlines Joël Morbe,
Sales Director at Copadex. Imagine Car
explains the development of online sales by
the big price differential that works in favour of
consumers. For Marketing Director Raphaël
Kohon, “traditional distribution has already
readjusted its offerings to minimize the risks of
losing customers to the Internet phenomenon”.
He claims that in coming years the prospects
appear less bright for on-line sales and suggests,
as for specialists, that sales will flatten out at no
more than around 9 to 10%. Specialised in tyres
and wheel-related systems, the Vulco network
remains convinced that tyres will be part of its
core business, even though it has chosen to
focus on the industrial sector where competition
is less fierce. The same sector, including HGV,
civil engineering and farm vehicles, will also be
getting special attention, with a Smartphone
application that will locate centres by GPS and
offer services. Retail chains also offer fixedprice maintenance deals covering a number of
inspected points. One such brand developed a
new concept in 2009, applied it to 40% of its
outlets and has set the goal of 100% by 2013.
A number of brands are communicating on
their new positioning and running TV and radio
spots. Speedy, Point S, Siligom, First Stop and
Euromaster are recognised as tyre specialists.
Yet, while they continue with the bread and
butter maintenance tasks that made their name,
a motorist can now call in at Speedy for a new
window or at Midas for a tyre. Some chains, like
Carglass and Euromaster are putting together
partnerships and offering to pool their knowhow.
Point S is focusing on auto maintenance. Tyres
(cars, HGVs, farm vehicles) remain its historic
business, for private or professional customers,
and still account for 80% of revenues. Some
sites are even specialised in HGVs and farm
vehicles. Yet other parts (brakes, dampers,
exhausts) are also showing double-digit
growth. Today, the network is offering servicing
strictly to manufacturer standards in its 420
points of sale. Moreover, Point S has launched
its own range of equipment and maintenance
products: batteries, windscreen wiper blades,
light bulbs, coolant, windscreen washer.
A HIGH-TECH PRODUCT
A tyre contains no fewer than 200 materials
including rubber, elastomers, minerals (such
as silica, replacing carbon black and making
tyres “greener”, without actual loss of original
colour) and synthetic materials. Composition
determines a tyre’s traction properties, running
economy and lifetime. Good tyre formulae are
as closely guarded secrets as the recipe for
Coca-Cola! Since they were invented tyres have
come a long way and have been through many
changes: radial in 1946 on HGVs, then in the
1960s on private cars; then tubeless, through
to green, and Run On Flat. The latter cut out
the need to carry a spare wheel and have a
range of up to 50 miles at a maximum speed of
50 mph after a loss of pressure. Adopted by
BMW, they now account for 2% of Goodyear’s
sales in France and are posting 30% growth.
Today, punctures are an increasingly rare
phenomenon (“once every 30,000 miles”, says
Claude Cham President of EQUIP AUTO and
President of FIEV) and a tyre’s lifetime now
averages around 30,000 miles. This means
that car owners can sell a vehicle without a
single tyre change. In the future, tyres will be
even more high-tech. They will systematically
come with their own built-in tyre pressure
measurement system (TPMS) as from 2012,
as require by European legislation. All these
innovations in tyre technology will be showcased
at EQUIP AUTO from October 11 to 15 2011.
EQUIP AUTO 2011 - P 7
EQUIP AUTO press contacts:
Press Office: CLC Communications
Contacts: gilles senneville (g.senneville@clccom.com)
or Anne-claire Berthomieu (ac.berthomieu@clccom.com)
Tel.: +33 (0)1 42 93 04 04 - Fax: +33 (0)1 42 93 04 03
EQUIP AUTO Communications and Press department
Contacts: sandra vernier (sandra.vernier@comexposium.com)
or Isabelle cachelot (isabelle.cachelot@comexposium.com)
Tel.: +33 (0)1 76 77 11 85 – Fax: +33 (0)1 53 30 95 84
For more information, please go to:
www.equipauto.com
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Société d’Exploitation du Salon EQUIP AUTO
Head office: Comexposium
70, avenue du Général de Gaulle • F - 92058 PARIS LA DEFENSE CEDEX - FRANCE
Tel. +33 (0)1 76 77 12 02 - equipauto@comexposium.com