Tire Technology Expo

Tire Technology Expo

September 6th, 2020
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The mid- to late 1980s were difficult times for the world tire industry. Tire manufacturers faced declining demand for new cars, declining tire prices, a record high U.S. currency, and record high tire imports. As a response to this market distress, the industry went through a period of significant restructuring and consolidation. Foreign firms bought out several American firms, leaving the world tire industry with nine ultimate parent companies that have annual sales in excess of $1 billion each. These nine companies account for 80 percent of world tire sales (Ita and Gross, 1995).

 Four of the nine companies have their headquarters in Japan (Bridgestone Corporation, Sumitomo Rubber Industries Ltd., Yokohama Rubber Co. Ltd., and Toyo Tire and Rubber Co. Ltd.), three are based in Europe (Groupe Michelin, Continental A.G., and Pirelli), and two are headquartered in the United States (Goodyear and Cooper). Despite the extensive merger and consolidation activity triggered by the difficult market conditions in the late 1980s, the industry continued to experience economic pressures into the 1990s. In the mid-1990s, raw material prices were increasing, plants were closing, and companies were competing in price wars. In more recent years, some of the economic pressures on domestic producers have declined.

While labor relations remain a problem for the industry, sales and profitability are improving in both North America and Western Europe. Tire companies are striving to control costs without raising prices by increasing output per man-hour worked. This trend, coupled with a decline in tire industry real wages of 0.7 percent in the last decade (Walters, 1995), prompted strikes at several plants. The labor unrest can be seen in the strike of the Continental General Tire plant in Charlotte, NC, in November 1998 and the strike at Titan Tire in Des Moines, IA (Rubberworld, 1999; Titan International, 1999).

In 1975, tire demand began to switch significantly from bias-ply tires to radial tires. This switch is now almost complete in the passenger tire market and nearing completion in the light truck market. Nearly all passenger car tires and more than 80 percent of highway truck tires are radials. Radial tires have a longer life than bias-ply tires, and the switch to radials has been a factor in reducing growth in domestic demand for replacement tires.

 Using industry standards, tire performance is rated on qualities such as speed, tread wear, traction, and temperature grade. For tires within the same category that have similar ratings, there is little product differentiation between tire producers; thus, price is the main distinguishing characteristic for consumers of tires within the same category of tires. There has been continuing improvement in tire technology and tire performance over time. Tread longevity, reduced rolling resistance, improved handling, durability, and safety are key characteristics consumers value in tires.

At this level, the demand for a specific type of tire is probably elastic and more dependent on price. Specifically, higher prices for new replacement tires may lead some consumers to postpone replacing worn tires or to purchase used or retreaded tires. Vehicle manufacturers and consumers of replacement tires have several options as to the type of tire they put on a vehicle. They can choose from different qualities of tires, including high-performance and speed-rated tires, and they can also choose among different brands.

 High-performance and speed-rated tires have been increasing in popularity recently. These premium-priced tires, which produce wider profit margins for tire companies, now account for 36 percent of all original equipment passenger car tires and about 34 percent of all replacement passenger car tires. Although these premium tires are of radial design, they tend to wear out much faster than conventional radials and thus increase the frequency at which tires are replaced (Standard & Poor’s, 1998). This change in consumers’ preferences contributes to the demand for replacement tires.

 Typical warranties on tires have increased to 80,000 miles from 20,000 miles just a few decades ago. The newest attribute that attracts customers is the run-flat tire. This type of tire can continue to operate safely with a flat for up to 200 miles. Most manufacturers have already introduced this product line. Goodyear and Michelin lead the development and Continental is set to launch its line soon.

The 20th edition of Tire Technology Expo and Conference, which was staged at the Deutsche Messe, Hannover, Germany, February 25-27, 2020, once again welcomed visitors from across the global tire design, development and manufacturing communities, with more than 300 exhibitors presenting their latest innovations and solutions at the free-to-attend exhibition, while delegates at the neighbouring conference analyzed the topics and themes set to shape the future of the tire industry.

Europe’s most important tire manufacturing technology exhibition and conference included the latest developments from major players such as Cimcorp, Siemens, Michelin and VMI Group, and a dedicated Chemicals & Materials Zone included recognized leaders such as Eastman, Versalis and Momentive.

The Tire Technology International Awards for Innovation and Excellence are recognized as the industry’s top accolades, and aim to celebrate the best new technologies and innovations from all over the world. The awards are judged by a fully independent, international panel of journalists and industry experts, and presented at Tire Technology Expo, during a special gala dinner at the Hannover Messe.

Categories include: Environmental Achievement of the Year, in recognition of environmental advances in the tire industry; Tire Technology of the Year, in recognition of important advances in technology; Tire Industry Supplier of the Year, in recognition of excellence by suppliers to the tire industry; Tire Manufacturing Innovation of the Year, in recognition of scientific and technological excellence in tire manufacturing; and Tire Manufacturer of the Year, in recognition of achievements by tire manufacturers.



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