In tune with the changes in customer preferences and the shifting focus from ICE driven vehicles to the CASE mobility, the global tyre industry is redefining their business strategies, adapting unconventional ways and materials, pushing automation and technologies, and allowing ‘outsiders’ to play a role in the business.

Michelin, one of the leading players in the global tyre business, has been in the forefront to bring about innovations that influence the industry. In 2017, Michelin, for research and development in sustainable mobility, introduced its Vision Concept, which is based on four pillars - airless technology in passenger tyres, sustainable materials, connected ecosystem and tread recharge with 3D printing.

“The Vision Concept illustrates our strategy for the circular economy and the focus of the research we are working on for the future. UPTIS, which is Unique Puncture-proof Tyre System and an assembled airless wheel structure, is the element of our airless mobility solution for passenger vehicles on which we are working on,” Cyrille Roget, Technical and Scientific Communications Director, Michelin Group, told Tyre Trends.

UPTIS, which is also an evolution of Michelin’s expertise in TWEEL technology, eliminates the possibilities of puncture and blowouts. It also requires near-zero levels of maintenance, making it a perfect option for the vehicles from self-driving shuttles to all-electric vehicles.

According to the Michelin website, 20% of tyres are scrapped each year due to punctures or irregular wear. It says airless technology makes the UPTIS prototype resistant to flats and blowouts. When applied to large-scale production, this characteristic means UPTIS offers ‘significant potential’ for reducing the use of raw materials and waste.

Based on its internal research, Michelin projects that UPTIS airless technology could prevent premature scrapping of up to 200 million tyres a year worldwide, says the company.

The company also adds that UPTIS can yield overall vehicle weight reductions by removing the need for a spare tyre, jack or tyre pressure monitoring system that exist in most vehicles today.

As per its concept vision, Michelin intends to have 100% sustainable renewable or bio-sourced materials in its tyres. “To determine the life of tyres, we need to have a balance between sustainable materials, whether renewable biomass sources or recycled tyres, that we will put in future tyres,” Roget said.

The connected ecosystem helps Michelin to understand the usage patterns or behaviour of the consumers and the lifecycle of the tyres.

The fourth pillar is 3D printing technology, which is complicated. Roget believes that 3-D printing or rechargeable tread business will gain importance in the future. “With the help of 3D print, we will be able to re-put a thread on existing structure according to the need of the user, so the rubber will be used in the right amount,” he said.

The rechargeable tread will also bring new business opportunities for Michelin. “It (rechargeable tread) will provide a completely different business model. In this, we will sell services where the consumers no need to take care of their tyres. For example, we will connect to our consumers and tell them to recharge their tyres for the winter season,”’ explained Roget.

Going Forward, tyre manufacturers will not be only making tyres but selling and servicing tyre as well. “Being tyre manufacture, we are the expert in tyres, and this is why the connected ecosystem is important. Through the connected ecosystem, we would guide them (users) to choose what is important and suitable for their vehicles according to their requirements,” Roget said. In the B2B space, the company is already selling tyres on kilometres run.

Michelin’s UPTIS is not just an example of an unconventional tyre but it, if industrialised and well accepted, will redefine the global tyre business.

Michelin and GM expect to make UPTIS solution operational and available as an option for select GM models as early as 2024.

However, challenges will be significant to industrialise UPTIS tyres. UPTIS needs different materials, design, and production process and that will impact the entire supply chain.

It is believed that industrialisation of UPTIS tyres will bring a massive transformation in the tyre industry as it experienced when the industry moved from bias tyres to radial tyres which brought the changes in raw materials, design, tyre building processes and the end products. “For UPTIS, it will be revolutionary on all fronts. We will have to invent new materials, the entire process and the supply chain to produce UPTIS. It is challenging and will take time,” said Roget.

Talking on challenges on calibration or making changes in the vehicles to fit airless solutions like UPTIS, Cyrille Roget says that there will be no need to make changes in the vehicles.  “That is one of the reasons GM is adapting UPTIS. The performance will be the same.  GM is opting UPTIS as an option,” said Roget.

The global auto sector is witnessing traditional OE rivals coming together to offer products and solutions. Tyre companies, which have always been knowns of their conservativeness, are also joining hands for innovations and sustainability causes.

“Tyre companies are working on ideas that are not competing. For example, TIP, and such projects are working on key issues that the tyre industry face as a whole.”

According to Roget, Michelin has been proactive in sharing information and knowledge that interest of industry stakeholders through the various platforms, maintaining the balance with its competitive domain. Michelin has adapted the open innovation strategy under which it seeks expertise outside of the company.

“We are not trying to develop everything internally. We are looking for start-ups and big companies as well to develop technologies and competency that we do not have internally,” Roget said.

Another challenge for companies is to bring innovations that are not only sustainable but accessible and affordable in different markets. Tyre companies are investing in sustainable and safe mobility to lessen the impact on the environment that benefit consumers, even they (consumers) are not willing to pay for it. “We need to find the balance between what we do to lessen footprint on the environment and the willingness of the customers to pay for it.  You cannot put a thing in the market that is expensive even it is good. We need to make sure that it is accessible to everyone,” Roget said.

Global tyre companies are buying dedicated online tyre e-commerce portals to get closer and provide faster service to customers. When asked, will growing online presence of tyre manufacturers eliminate tyre dealers, Roget says that dealers will remain an integral part of the between the companies and the customers. “Even if people buy tyres online, they will have to go dealers get them fitted properly. But yes, we are participating in the online market in a big way, and that is something our consumers are expecting. We prefer to engage with consumers directly in day to day use,” he said.      

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.