By Gerald Böse, President and CEO, Koelnmesse

The successful premiere of THE TIRE COLOGNE is a confirmation of our long and intensive preparations. After all, from the first announcement in 2014 until the trade fair in 2018, we worked for four years in cooperation with the industry on the concept, services on supporting events, initiated world-wide information and marketing campaigns and incorporated partners for many themes. We have convinced exhibitors and visitors to THE TIRE COLOGNE with our event concept and a new orientation, with the high quality of visitors, a generously dimensioned hall offering and a strong concept in terms of content, and received a unanimous vote from the international tyre and wheel industry: Cologne is the leading international meeting point of the industry right from the start!

However, this doesn't mean we can rest on our laurels. Our thinking and action are oriented to continuing further development: we see ourselves as part of the international tyre and wheel industry, and also want to provide impulses in terms of content that are of use to the industry for future development. Every industry requires perspectives on how the future orientation and potential for further growth can be developed and realised. In our concept we have defined clear strategic and conceptual goals that point out and realise these perspectives.

1. the independent and comprehensive reflection of the industry at all levels, at a glance and at the right time.

2. the internationalisation of all relevant industry segments.

3. the generation of new visitor target groups. In addition to the themes of online commerce and workshop services, we have in this way addressed important target groups like fleet managers and transport companies and attracted them to Cologne. We have also clearly emphasised the theme of recycling, which has to date only been treated inadequately – additional added value for industry and commerce. This has all worked very well, but there is still much more potential for further expansion. Accordingly, we analysed all areas and thematic focuses and verified development potential here and there. For example, we want to expand the Recycling/Retreading, Workshop and Services sections, but also the over arching theme of digitalisation. To this purpose, we are already involved in an intensive exchange with potential exhibitors, organisations and partners.

We have thus already achieved the most important goal of comprehensively reflecting the entire industry. I especially emphasise this because we are now in a two-year cycle. However, the premiere in 2018 had a run up period of nearly four years, extending from the announcement that the industry was switching to Cologne to the first event. Almost five months prior to the opening of the fair, more than 90 per cent of the planned exhibition areas have already been rented -in comparison to the final result of 2018, even almost 95 per cent in comparison with the original planning for 2018. More than 400 companies have already confirmed their participation in THE TIRE COLOGNE 2020, including nearly all well-known key accounts from the focus segments. THE TIRE COLOGNE is thus the world's only B2B platform to present the top brands of the international tyre world. We will be making smaller adjustments, for example, in the hall planning, in order to optimise further here. In concrete terms, this means that the big key players will not exclusively be placed in Halls 6 and 7, but some now also in Hall 8. This ensures even more optimal distribution of visitors to all halls of THE TIRE COLOGNE, and at the same time reinforces the segments of car services and workshop outfitting. Hall 9, with the focus on the themes of tyre remoulding and recycling, will also be made more attractive for exhibitors and visitors, in that the "Global Retreading Conference" and the Recycling Forum will also take place here. In addition, the "Future Mobility" special area will also be realised in Hall 9 for the first time.

With the "Future Mobility" special area, THE TIRE COLOGNE wants to take a look into the future and point to questions that affect the industry: how will mobility change in the future? What impact will changes have on people and society? What does changed mobility mean for the product tyres? And what effect will this have on the tyre industry? Answers to these questions will be provided by, among others, Dr Sascha Peters, one of the most renowned material and technology experts in Europe, who will discuss the theory and practice revolving around the product of tyres and possible changes in the future in the context of the special event. As a highlight and at the same time as a stimulus for active participation, a driving course is being planned for the "Future Mobility" special event, where autonomous or electrically powered vehicles will be in use.

The event programme is oriented to questions that currently affect the industry – whether this involves innovative further developments or a theme that affects every one against the background of climate change: sustainability. With the "Recycling Forum," we offer a complete overview of the decisive aspects in the field of tyre recycling and sustainability. And sustainability of course also plays an important role for the Global Retreading Conference. The conference is a one-time opportunity to take a global look at thedecisive trends and developments of the retreading industry. The focus this time is on "Retreading as Best Practise for the Circular Economy."

An important theme we are emphasising for THE TIRE COLOGNE in a targeted fashion is "digitalisation." Digitalisation affects us all and is causing a dramatic change in all areas of life. The digital transformation opens up big chances for more qualityof life, new business models and more efficient business economy. In the framework of the Digital Strategy, Koelnmesse deals with all aspects of digitalisation that are or might become relevant for the company and the trade fair business. And digitalisation has also long since arrived in the tyre industry. With various sessions on the stage of THE TIRE COLOGNE, we will show what digitalisation already means today for all participants of the tyre industry, and how it can be used for your business.

The digital transformation remains a definitive theme of decisive importance for the future focus at Koelnmesse, but surely also for the tyre and wheel industry. For us as Koelnmesse, digitalisation is the central development programme in the company, on which more than 100 of our own employees are working. The goal is the successful transfer of the core business of the trade fair into the digital world: through the development of digital services and business models, the improvement of internal processes, the digitalisation of the fair grounds and the expansion of the corresponding trade fair themes. The programme includes both projects that have already been in existence for a longer period of time, such as ticket and access systems, or a digital sales system introduced two years ago, but also new themes like the digitalisation of traffic management or digital signage, a joint project with Samsung. It unites route guidance, infotainment and advertising on more than 200 m² of digital area and is currently being further expanded upon – and is of course being used for THE TIRE COLOGNE.

Digitalisation influences markets and needs – as well as our exhibitors and visitors. Digitalisation is therefore a strong aspect for the tyre and wheel industry, because it permeates trends and changes. In order to intensify this understanding and be able to react to possible challenges "just in time," THE TIRE COLOGNE, together with the IFH, the Institut für Handelsforschung in Cologne, has carried out an extensive study and survey of the tyre trade in five core markets - in Germany, the United Kingdom, Italy, France and Poland. The goal of the study is to verify the themes of relevance to the trade in the respective countries, and how it reacts to challenges, whether with regard to digital transformation, digital tools, trends or recruiting staff. Very informative were the findings, and in some cases very different findings in the countries surveyed – also and in particular with regard to the theme of digitalisation and the use of digital tools to address and secure the loyalty of customers.

However, the study is only the first step of this project. We will soon also be offering the specialised trade the possibility to benchmark itself and its service profile against the European average at the website of THE TIRE COLOGNE. With the comparative result of the "Fit forthe Future" test, the participant also immediately receives a brief analysis and possible approaches to solutions, which could be of benefit for the further development of their own business.

The international tyre and wheel industry is strong and has great potential. However, it must at the same time invest in order to assure this potential. THE TIRE COLOGNE will contribute to this development as the leading international industry platform!

 ( Kindly Note:  THE TIRE COLOGNE has been postponed until 2021. The organisers yet to declare new dates)

Extensive study,  survey supplemented with Fit for Future test

As the leading platform for tyres and wheels, THE TIRE COLOGNE sees itself not only as a business hub that brings together all relevant players from industry and trade in one place. Much more than this, it sees its task in the presentation of themes and content that benefit the future development of the industry. "We see ourselves as part of the industry and want to point out solutions for the constant market changes, with the goal of setting sustainable impulses for the development of the industry. This is the bar we have set for ourselves. This year we initiated a study in five European core markets, the results of which will provide all market participants with a better understanding of the function of the respective markets and the challenges there. Building on the results of the study, each trader can now check themselves in our downstream "FitforFuture-Test" to find out where they stand and where there is room for improvement," according to Christoph Werner, Senior Vice President Trade Fair Management of Koelnmesse.

Markets are constantly changing and, as a consequence, also the needs of customers. In order to intensify this understanding and be able to react to possible challenges "just in time," THE TIRE COLOGNE, together with the Institut für Handelsforschung in Cologne (IFH Köln), has carried out an extensive study and survey of the tyre trade in five core markets - in Germany, the United Kingdom, Italy, France and Poland. Managing directors, owners and masters from companies in the specialist tyre trade from five countries were surveyed, and secondary research and interviews was carried out. The survey focused on the clusters of digitalisation and digital tools and automobile mega-trends, as well as personnel recruiting and continuing training of staff.
 

A short summary of the study results:

Digitalisation is bringing big challenges for tyre retailers: The European tyre trade is changing rapidly. This is being propelled by changing customer behaviour. The customers of the tyre trade have considerably higher expectations of service than in the past and expect communication on all channels with coordinated sales and service offerings. Digitalisation is also changing and is placing one sector after the other in question - the tyre trade must keep up with the general digital transformation. The challenges relating to this have for the most part been recognised and tend to be evaluated with reference to the chances. Nonetheless, there are sometimes shortcomings in implementation. The reason: the tyre trade isn't daring enough. The broad portfolio of digital tools has not yet been utilised consistently. In addition to this, mega-trends are classified as science fiction without looking for one's own advantages in the here and now.

Tyre trade will soon face a personnel problem: This is exacerbated by a massive personnel problem - at least in most European countries. The tyre trade is already facing problems recruiting new employees in the core area of the workshop, but also with the acute line of succession. And there are no effective remedies in sight.

What needs to be done?: The tyre trade must develop a certain amount of self-confidence. This must correspond with the core requirements of the digital age - meaning, be present on all channels and be based on smooth and rapid processes. Only then can one provide profitable offerings, products and services. In addition to this, the tyre trade requires a broader portfolio of digital instruments for internal and external use. More practice and continuity in the usage of these instruments is also required. In addition to this, the tyre trade requires creative solutions and must develop convincing arguments extending beyond the standard offerings, in order to find and bind more employees.

FitforFuture test and best practise

All results of the THE TIRE COLOGNE study - complete, as a management summary, but also the evaluations of the individual countries and core topics - are available for download on the website of THE TIRE Cologne at https://www.thetire-cologne.com/the-fair/tireresearch/tireresearch.php . Furthermore, on the website of THE TIRE COLOGNE the FitForFuture test can be used effective immediately to check how one's company is developing in terms of #DigitalTransformation, #DigitalToolbox, #Recruitment/ human resources development and #Trends.
Subsequent to this, he will immediately receive the test results and relevant best practice examples from the aftermarket, but also from other retail industries.

Of course, findings from the study will also play a role in the context of the congress and event programme of THE TIRE COLOGNE, where the four core themes will be discussed with industry participants and experts in special theme forums. Subsequent networking events provide exhibitors and visitors with additional added value while looking at the study and discussion results in greater depth.

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.