Early this year, Bridgestone India, part of the Bridgestone China, Asia-Pacific SBU, joined the company's EMEA Strategic Business Unit (SBU) and became a part of the Bridgestone Emerging Markets division, alongside the company's businesses in Africa, the Middle East, and Russia. The change will expand Bridgestone India's business reach, especially in digital space, retails, OE and aftermarket sales in both passenger and commercial tyres in line with the transition that is happening in the Indian auto industry.

"The European markets are very advanced in terms of auto and tyre regulations and technologies. We see the regulations (related to the auto and tyre industries), being introduced in India, are also going in the same direction of the Europeans' with rapid speed. For instance, we have jumped from BSIV to BSVI to match the European standards. In addition to that, the company's European tyre business is quite mature and advance in specific areas such as digital technology and fuel efficiency of tyres and we also see these becoming big areas for the Indian tyre industry soon. So, by connecting the Indian entity more closely with our EMIA set up, we can leverage the knowledge and expertise of the European market to help develop the Indian business faster," says Parag Satpute, Managing Director, Bridgestone India Private Limited.

Today the Indian auto industry is witnessing faster adaption of global disruptive technologies and trends in the local context. However, bringing disruptive technologies in the Indian market will not be easy for Bridgestone as demand is still primarily determined by prices. According to Satpute, the Indian market is growing rapidly across the sectors, and the country will witness a leapfrog to opt for new technologies. "A decade ago, the e-commerce business was not existent in India but see how quick it took off. The digital evolution has also happened at a faster pace in India. The cell phones came to India comparatively late, but today the penetration of cell phones is very high compared to any other nation. The same kind of growth will happen in the automotive and tyre sector in India. Being a global leader in the tyre industry, we would also like to be a front runner in India and connecting to our European setup allows us to leverage technologies directly as and when the Indian customers are ready to adapt," explains Satpute.

Among the new mobilities, Satpute is bullish on the shared and electric mobility in India. Satpute predicts that due to value prepositions, the shared mobility will continue its dominance in India, barring the current hiccups, in the long run. According to a new study by Frost & Sullivan, the Indian shared mobility market is expected to further grow at a CAGR of 9.7% between 2019 and 2025 to reach 4.7 million. Total revenue from ride-hailing services is valued at $22.40 billion and is expected to grow at a CAGR of 13.7% over the 2019- 2025 period, said the study.

Satpute sees a rapid growth in the EV space.  "We have seen that the government is very aggressive to make better growth opportunities in the EV segment. Today the electric vehicle market is small, but it is another segment which has the potential to grow very fast. We are very keen to be partnered with OEs for EVs by using our experience of developing EV tyres in Europe and Japan. We're working very closely with leading OEs,” " adds he.

Under the FAME II, the government has increased the financial investment for EVs and mobility to $1.4 billion, more than a 10-fold increase from INR 895 crores ($129 million) under the past FAME I scheme.

Getting the maximum mileage per charge is the core demand of electric vehicles and Bridgestone, in the Indian market, is already offering a line of products that increases fuel efficiency. For example, the Ecopia tyre line increases fuel efficiency by 7% to 10%. Recently the company has also launched a new technology called ENLITEN in Europe for electric vehicles which increases the mileage per charge. ENLITEN Technology enables tyres to have a super low rolling resistance for excellent fuel efficiency and improves vehicle handling and driving dynamics to help increase driving pleasure. "We will bring such technologies to India, if the demand of the electric vehicle picks up," says Satpute.

"Another factor that drives the growth for the EVs tyres is low noise. In Europe, we have deployed the technology that reduces noise of tyres.. However, currently, we do not see the noise reduction is a big topic of the discussion in India, but it will come. In future the low noise will be one area that we will be focusing on and we have the right capability to bring that technology," he said.

Contactless solutions

According to Satpute, during the COVID and even post COVID, people will prefer contactless solutions for buying and servicing tyres. In line with the trends, Bridgestone India introduced Contactless Tyre Servicing platform called 'Bridgestone Bookmyservice', the platform enables customers to take an online appointment in a few clicks, making them spend less time in outlets with these pre-planned visits. "People don't want to go to different dealers and haggle over prices. The focus in the current times remains on being safe. And that being our core value, we came up with this solution which enables our customers to avail essential services without compromising their safety as well as that of our channel partners."

However, Satpute also adds that tyre selling on e-commerce might be limited. "You need professional equipment and skill for fitting, balancing and other related services. What we have seen is that people do research to understand and find perfect tyres online but then go to stores to buy them. Now, with the digital platform, we can connect customers with to our physical stores. Today the company has over 4,000 outlets out of that 500 are dedicated for contactless services which are present in tier 2 and tier 3 cities as well. The company will leverage the select store network to accelerate that contactless businesses.”

Indian consumers are also getting conscious of safety. "Indians are now looking more into the safety aspect. Trusted brands will be preferred in the long run."

The increasing purchasing power of Indians, thanks to growing income and economy, will boost demands for passenger cars in India. While the commercial vehicle segment in India will thrive on improving infrastructure and road connectivity. The trends in the commercial vehicles segment will open new avenues for Bridgestone India. The total cost of ownership is becoming focal points for trucks and buses manufacturers to push their products in the market, and that is making way for modern vehicles, equipped with technologies. Satpute says modern trucks and buses will fuel more demand for radial tyres, which has around 40% market share in the total commercial vehicles tyre market. "It is true that the commercial tyre market is dominated by a handful of players. But around 60 % to 65 % of commercial tyre market is of bias tyres where we do not have a presence. With better infrastructure and modern vehicles, radialisation will pick up in the segment," he says. In 2013, Bridgestone India entered the commercial tyre segment. In the passenger vehicle tyre space, the company claims to be among the top three players, for the segments they operate in.

Another potential business Satpute sees is selling tyres as a service. Bridgestone India is going further ahead and offering tyres as a service under which the Japanese tyre company does not sell tyres to fleets but takes over the responsibility of managing the tyres. "We take care of fitment, service and maintenance of tyres and charge per kilometre of the usage. This is an exciting business model with the companies which have good products. This business has started with advanced fleet companies in India, we see this business will grow rapidly in India."

Sustainability is at the core of Bridgestone India's business. It offers products that reduce fuel consumption and lower CO₂ emissions. On the manufacturing front, the company uses energy procured from eco-friendly resources for energy. At its Pune plant, the company installed 1 MW of solar capacity at its plant and is in the process of setting up of another 4 MW of capacity. The Indore plant in Kheda, in Madhya Pradesh in Central India, has 1 MW solar energy capacity that is being enhanced by another 1 MW capacity.

Bridgestone Americas announced the launch of Firestone Direct mobile vehicle service for car owners and fleet operators. Firestone Direct brings Bridgestone’s automotive services directly to vehicle owners’ homes or workplaces to offer maximum convenience with safe, contact-free service.

This service uses specially equipped vans operated by certified technicians to perform a wide range of maintenance services, including fluid and filter changes, tire repair and replacement, battery check and replacement, and more. 

Through 2021, Firestone Direct will continue to grow into additional markets across the southeastern U.S., with plans to expand nationwide by 2023. The new service launched first in Nashville and Atlanta and expanded into Orlando and Tampa in March.

Angie Oleson, director of Firestone Direct, said, “Customers are increasingly turning to online shopping and at-home services for convenience and safety, and Firestone Direct is at the forefront of this movement for at-home car care. By bringing trusted vehicle care featuring the latest automotive technologies directly to the customer, Firestone Direct can leverage the expertise of our trained technicians with the ease of online booking and at-home service for maximum convenience.” (TT)

The global electric vehicle (EV) market has taken a tremendous leap forward, with new registrations reaching record market shares in nearly all countries. For the tyre development landscape, the accelerating growth of the EV market means a pervasive transformation.

Boosting circular economy

At Black Donuts, the impact of the EV trend can be seen everywhere, from the tyre designers’ desks to the new practices of tyre testing. Beyond meeting new demands of the EV sector, the procedures and practices are tuned to serve the company’s strategic goal: to spearhead the industry’s shift towards a circular economy.

Black Donuts launched the first EV tyre development projects with its tyre manufacturer customers in 2018. The internal research on EV tyres was initiated even before, at the time of the first EVs entering the market. “The first research project addressed the primary technological challenges: rolling resistance and noise,” says lkka Lehtoranta, Head of Tire and Material Development at Black Donuts.

In tyre design, it is essential to focus on specific aspects to ensure optimal performance for electric cars. Compared to combustion cars, tyres for Evs must carry a heavier load withstand high instant torque – and be efficient and quiet. 

Lately, the focus on tyre technology has shifted towards more comprehensive sustainability. Bio-based materials and compounds are opening new possibilities, and the rapid growth of the EV market accelerates the pace of development. ”The EV trend has highlighted the sustainability of tyres. The demand for bio-based materials and tyre recyclability has significantly increased,” says Jarkko Mällinen, Technology Development Manager of Black Donuts.

In cooperation with its partners, Black Donuts is investigating new possibilities to replace fossil-fuel-based raw materials with bio-based or renewable materials in all products, including studded tyres. The company is currently testing the use of bio-based plastics in stud bodies.

Also, end-of-life tyres are a hot topic in the industry, and Black Donuts is researching how the waste tyres can be recirculated and recycled back into the process. Even the tyre development process is undergoing a renaissance. New design tools for faster tyre development are being introduced, emphasising the key features of sustainable, future proof tyres.

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European PCLT (passenger car and light truck) tyre manufacturing capacity has risen over the past decade to meet increased demand, but there has been a major shift from plants in Western Europe, towards Central Europe and Russia. The move eastwards reflects substantial differences in operating costs between the two regions, specifically in terms of labour costs. Hourly labour rates in Central and Eastern Europe can typically be half to one quarter of those in the highest cost Western European countries. In particular this significant differential has resulted in the transfer of production of lower priced non-premium tyres to larger plants in Central and Eastern Europe. Numerous PCLT plant closures and downsizings in Western Europe have either been announced or enacted during the past 18 months.

In 2019 Cooper Tires ended PCLT tyre production at its small plant in the UK, and Michelin recently closed the PCLT tyre plant in Dundee that manufactured tier-1 brand tyres in lower rim-diameters (≤16”), a shrinking segment of the European market. These closures leave just the two PCLT tyre facilities operating in the country: the Pirelli plants that focus on low volume but high-margin premium tyres.

In Germany, Michelin has announced plans to close its Bamburg plant that also focused on lower-rim -diameter tyres, whilst Goodyear is restructuring operations at its PCLT tyre facilities located in Fulda and Hanau. Total capacity there will fall, but there will be an increase in production of premium tyres.

Pirelli has recently ceased production of car tyres at its Bollate plant in Italy, its only facility in Western or Central Europe that was manufacturing non-premium car tyres. Apollo Tyres plans to downsize PCLT capacity at its plant in the high-cost Netherlands, focusing the facility on high value tyres with short production runs. Management had stated that the company lost money on 70% of the PCLT tyres that it sold from the facility.

Despite these closures in Western Europe, expansion to the east is expected to result in the net addition of 30 million units of PCLT tyre capacity across Europe* by 2026. New plants that have been recently opened, or are currently under construction, are located in either central and eastern Europe or Russia. In 2017, Apollo Tyres opened a greenfield plant in Hungary, with first-phase capacity increasing to 5.5 million PCLT tyres and almost 0.7 million TBR tyres. Supply from the facility has substituted imports from India and now permits the planned downsizing and specialisation of production in the Netherlands.

In 2018, Hankook announced plans to add production of TBR tyres at its plant in Hungary, however this expansion was put on hold in late 2019. In phases, the company has already expanded PCLT tyre capacity until it is now one of the largest such facilities in the world. Meanwhile, Nexen has begun the ramp-up of capacity at its new plant in the Czech Republic; this will have added substantially to the country’s capacity by 2023.

In addition to further investments across Central and Eastern Europe by Continental Tire, Bridgestone and Pirelli, an expansion of premium tyre capacity in Slovenia has also been announced by Goodyear.

In mid-2019 Toyo Tire announced its intention to build a new tyre plant in Serbia, consolidating the country’s position as the leading location for new PCLT tyre manufacturing capacity in Europe. This follows Linglong’s decision to build its new European plant in the country and Cooper Tire’s plan to double the size of its facility. Based on analysis by Astutus Research of all announced capacity actions (plant opening and expansion net of closures and downsizing), Serbia will account for over 40% of planned capacity additions between 2019 and 2026.

Toyo expects to invest €390 million in its new facility that will have a capacity of 5 million units. It intends to start production in early 2022 and reach full capacity the following summer. Linglong’s facility will have a capacity of 12 million PCLT tyres, alongside truck and radial agricultural tyres, built in three phases and representing a total investment of over €800 million.

Serbia as new hub

Although there is demand for both replacement and original equipment PCLT tyres in Serbia, the domestic market is amongst the smallest in Europe and production will be export focused. The country has already emerged as a key source of budget tyres to the European Union and to Russia, predominantly from Tigar Tyre, Michelin’s low-cost tyre subsidiary, that has significantly increased capacity and production in the past decade.

Geographically, Serbia is well located to supply the major markets of the EU and Russia, and benefits from free trade agreements with both. Labour costs in the country are significantly lower than in the Czech Republic or Hungary, and labour availability is good, with a higher rate of unemployment.

At present Toyo imports tyres to Europe from its facilities in Japan and Malaysia; Linglong utilises its PCLT tyre plants in China and Thailand. Both companies aim to develop their presence in Europe, and local production should help them in this quest, particularly in the original equipment segment where the significantly shorter lead times will improve the competitiveness of their offer. Similarly, the opportunity to increase their share of the OE business was one of the motivations for Nexen and Apollo to replace imports to open a plant in the region.

Whilst the influence of the Covid-19 virus may slow the pace of some planned investment in central and eastern Europe, it has already accelerated the pace of closures in the west. Furthermore, we expect that it will result in further plant closures there, as the decline in European tyre demand dramatically reduces plant utilisation rates.

*Europe refers to Western, Central and Eastern Europe, including Russia and CIS, but excludes Turkey which we include in the Middle East & Africa region.

For capacity data: ‘Western Europe’ includes plants in Germany, France, Spain, Italy, the UK, Portugal, the Netherlands, Finland and Luxembourg. ‘Central Europe’ refers to Poland, Romania, Hungary, Czech Republic, Serbia, Slovakia and Slovenia. ‘Russia and CIS’ refers to Russia, Ukraine, Belarus and Uzbekistan.

• Simon Hodson is Research Director at Astutus Research shodson@astutusresearch.com

The WHO has said that the outbreak is now officially a Pandemic. People/ companies/ organisations are still coming to grips on how to address the situation. Government heads of various countries are trying to curb the situation by restricting entries of people who are affected by countries that are affected the most. Thus, airlines would have only diplomats and other certain levels of people allowed to fly.  Many airlines have suspended a good number of their flights.  Many companies will be looking to take a hair cut on what they take back with them, just to see that business can be sustained during the trying situations. 

The virus has led various markets to crash, courier services have been curtailed in certain countries. All types of cancellations, be it sport, expositions or business, have affected the business world over. The transaction value in the losses may be difficult to gauge currently, however, it could be in the millions. Contracts would have to be reworked, and companies may have to come with new strategies. 

However, in every situation, there would be also a business opportunity, if you work your strategy right. The sale of masks, gloves, hand sanitisers, medical devices would be able to generate good business. Though it is seen that the outbreak is from China, you also got to give to them as to how they are trying to contain the situation by building hospital/s within 10 days. In other countries, this would easily have taken a much longer time period. 

It is a given that the business scenario is not going to be the best for most of the companies; Therefore, companies may have to think and reevaluate the way they are currently running their company. Companies will look to get leaner in every possible way. Cut down on unwanted expenses. Many companies have started asking their employees to work from home. Some may look to have lesser number of people and look to automate some of the work, especially in the factories.  Commercial properties being an expensive asset to maintain, some companies may look to perhaps go on rented co working spaces. Use less of one time use items like plastic and use more renewable/ reusable substitutes. Use of more environment friendly methods going forward will be the mantra. 

This hit on our social system in a way will make us pause, think and have better suggestions as to how to look after ourselves and our environment at large.