Tyre makers respond to cheap import threat

Leading truck tyre manufacturers will fight the flood of cheap tyre imports from the east by emphasising their value-for-money ranges at the forthcoming Commercial Vehicle Show, which takes place at Birmingham’s NEC from 26-28 April.

Bridgestone, the Japanese premium truck tyre manufacturer, will use the show to launch its Dayton range of European-made tyres which it offers at affordable prices and are aimed at budget-conscious small fleets and owner-drivers.

It is the third brand in the Bridgestone portfolio: the company also sells Firestone tyres as a robust, value-for-money offering which doesn’t have the latest innovations in terms of longevity and fuel economy that its flagship brand enjoys.

But operators buying the Bridgestone premium product will benefit from the company’s Total Tyre Care package, which manages the tyre casing through its first life and subsequent regrooving and remoulding. Bridgestone also markets retreaded tyres under the Bandag banner, and they offer a 30 per cent saving over the cost of new tyres.

Continental of Germany has repositioned itself from being a provider of tyres to taking a very active part in their management: not least by the real-time monitoring of pressure in service via its telematics tyre pressure monitoring systems.

Its remould product Conti-Re sees tyres remoulded and scrap product recycled under the same roof, while inspection of returned casings is carried out in the UK.

In addition to its remould product, Continental also offers three tyre brand tiers: Continental/Conti being the OEM quality which is first fitment on many new trucks; Semperit being a secondary brand which is currently benefitting from a complete refresh with new model names, tread compounds and patterns; and Barum covering the budget end in tier three.

Continental will launch the new Semperit truck tyres in key 315/80 22.5 and 315/70 22.5 sizes at the Commercial Vehicle Show.

Goodyear is taking a rather different approach and will position itself as a top-tier premium brand at the Show.

The major thrust of its pitch is the result of real-life fuel trials that it has undertaken with UK fleets, which it says have produced some startling results in comparisons with respected competitors. Visitors to the show will be able to use on-stand calculators to project these savings onto their own operations.

The company will also push its service support, paperless systems, the OEM sign-offs that it has with major vehicle manufacturers, and the leading fleets that it works with as it repositions itself in the UK truck tyre market.

One of the drivers behind all this activity from the European majors is a flood of cheap imported tyres from the east.

While it is unlikely that many operators would switch directly from a major brand with chassis-manufacturer approval on newer trucks doing high annual mileage, they can prove tempting as fitments to trailers and in applications such as landfill work, where even a brand-new premium tyre can be easily written-off by half-buried debris.

These imported tyres are being increasingly chosen as alternatives to locally-produced remoulded tyres, and the environmental and economic impact is serious.

In fact, Britain’s Retread Manufacturers Association (RMA) has compared the ‘dumping’ of budget truck tyres in the UK with the damage being inflicted on the steel industry by cut-price imports from China, and claims that 2,500 jobs are at risk in the business.

The RMA is now calling for urgent action to allow the UK retread industry to compete on an equal footing with the cheap and subsidised imports which it said are coming in from China.

Representatives from the RMA and the tyre industry raised the matter with ministers from the Department for Business, Innovation & Skills in a meeting at the start of the year, to press for urgent measures to address the threat already being felt across the UK and Europe.

An RMA spokesman said: “The situation becomes clear by simply comparing the cost of raw materials with the retail price of Asian imports.

“For a truck tyre, which typically weighs 60 kilos, the materials cost approximately £1.16/kilo at global commodity prices, giving a cost of £70 for materials alone. Meanwhile, Chinese imports are being sold at around £73 a tyre, leaving a margin of just £3 for manufacturing, transportation, import duty and profit.”

The RMA asserts it is impossible for a commercial operation to retail tyres at this price without significant subsidy from a backing organisation or government.

At the meeting with minsters, the RMA reiterated that of the €1 billion the industry generates across the European Union, 60 per cent is generated by SME businesses, which are particularly vulnerable to the impact of dumping.

Patrick O’Connell, Chairman of the RMA, who led the tyre industry deputation to ministers, said: “We were extremely sorry to learn that the flooding of cheap imports into the UK steel industry has had such a devastating effect. This is terrible news for everyone affected and those working within the steel industry.

“Unfortunately, this mirrors what is happening in the UK’s tyre industry, with jobs under threat as a result of a flood of cheap tyres from China into the UK.

“We are calling on the British Government and European Commission to take immediate action on the ‘dumping’ of tyres from China into the UK and European markets.

“Data supports the view that without intervention, the future of 2,500 employees, either directly or indirectly employed by the UK retreading industry, is under threat. We are committed to lobbying on behalf of the retread industry to secure its long-term future in the UK.”

Bandvulc of Ivybridge, Devon is typical of the companies under threat. It claims to fit its retreaded tyres to the trailers of most of the UK’s supermarket fleets, and employs 420 people processing 4,000 tyres a week.

Company founder Richard O’Connell has called for the UK government to follow the United States and slap a 200 per cent duty on the budget imported products. He uses environmental arguments to support his case, pointing out that the budget tyres’ carcasses cannot be remoulded and the impact of transporting them across the world also must be taken into account.

Bandvulc maintains that, compared to the materials and energy consumed in the manufacture of a new truck tyre, remoulding an existing carcass saves an average of over 60 litres of oil a time. There is also the significant issue of carcass disposal if the tyre cannot be remoulded.

If the UK market for remoulded premium tyres does dry up, then UK truck operators will be faced with having to pay to dispose of old tyres which they can currently claim a rebate on when they exchange them for new ones or remoulds. Suddenly those cheap tyres won’t look quite so cost-effective.