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Focus on the PASSENGER tyre market<br />
Optimistic outlook for the passenger tyre market<br />
Meet Hi-Q Honcho, Sean Harrison<br />
Run-flat tyres – first-world rules for a third-world reality?<br />
Behind the Focus on Excellence Awards<br />
Goodyear in search of Highway Heros<br />
Vol 15 • March 2009<br />
A set of INFINITY performance tyres to the value of R3 500 courtesy of Tyrecor
Introduction • 1<br />
Contents<br />
One-on-One<br />
With Hi-Q Honcho, Sean Harrison....................................................................................................... 3<br />
Focus on<br />
Optimistic outlook for passenger tyre replacement market................................... 11<br />
Focus on Excellence<br />
Behind the Focus on Excellence Awards...................................................................................... 23<br />
Manufacturing<br />
New MD for Goodyear <strong>SA</strong>............................................................................................................................ 26<br />
Passmore’s career is shortlived................................................................................................................ 26<br />
Dunlop flights striking new TV ad......................................................................................................... 28<br />
Talking tyres<br />
Run-flat tyres – First-world rules for third-world reality.............................................. 30<br />
Dealer profile<br />
Speedy does it!............................................................................................................................................................ 30<br />
New initiative<br />
Goodyear on the hunt for Highway Heros.................................................................................. 34<br />
Company profile<br />
Tyrecor extends product range and moves into own premises............................. 36<br />
ProFleet<br />
ProFleet promises tyre management excellence.................................................................... 38<br />
Distribution<br />
TrenTyre celebrates successful 2008 ............................................................................................. 40<br />
Conti Corner<br />
Tonway Tyres consolidates, following its best trading year yet.......................... 42<br />
Ask the tyre experts..................................................................................................................................... 44<br />
World news<br />
Goodyear details actions to address market, economic challenges................ 46<br />
Brembo, Marelli and Pirelli launch technology collaboration............................... 46<br />
Michelin cuts back in light of economic environment.................................................. 46<br />
No deal for Pirelli and Continental....................................................................................................... 46<br />
Competition, Subscription, Website................................................................................... 48<br />
Editor<br />
Photography<br />
Technical Consultant<br />
Reproduction<br />
Printing<br />
Distribution<br />
Advertising<br />
Liana Shaw<br />
Wray Shaw<br />
Wray Shaw<br />
Trend Dynamix<br />
Trend Dynamix<br />
Prestige Bulk Mailers<br />
Liana Shaw<br />
Publishers<br />
Sky Publications cc<br />
PO Box 702<br />
Douglasdale, 2165<br />
Tel: (011) 658 0011<br />
Fax: (011) 658 0010<br />
Cell: 082 851 6777<br />
E-mail:<br />
satreads@mweb.co.za<br />
Website: www.satreads.co.za<br />
A note from<br />
the editor<br />
The unprecedented global economic<br />
crisis has thrown a real spanner in the<br />
works. Worst of all, no-one can predict<br />
its duration. Hardly surprising that the<br />
motor industry was one of the first to<br />
feel the ripple effects of this unusually<br />
dire cycle, with motor manufacturers<br />
around the world having to rely on<br />
government hand-outs, laying off<br />
staff, even temporarily shutting down<br />
production plants.<br />
Ultimately, this is bound to have an<br />
effect on the tyre sector. Already, we’re hearing of global tyre manufacturing<br />
giants cutting thousands of jobs, with more, sure to follow. The question for<br />
us in South Africa, is how well placed are we to weather the ill-effects of the<br />
economic downturn? This issue takes a dedicated look at the passenger tyre<br />
sector, as we ask some major players for their impressions on the short-term<br />
impact of this looming recession, in light of decreased consumer spending.<br />
Sean Harrison, Managing Director of Hi-Q also lends his thoughts on the<br />
economic crunch, while also outlining strategy for Hi-Q as it celebrates more<br />
than a decade of successful trading in the marketplace.<br />
If you’re wondering whether your set of run flat tyres fitted to your BMW<br />
was a worthwhile invention, and more important, whether the South African<br />
distribution network is adequately geared up to meet this latest demand, you<br />
won’t want to miss the story written by our new columnist, Colin Mileman.<br />
Also in this issue, we introduce you to the new kid on the block – South<br />
African tyre distributor and importer, Tyrecor – who despite the credit crunch<br />
and in contrast with the current trend that finds most companies downscaling,<br />
is placing utmost confidence in the South African market via the relocation to<br />
its very own premises in Cape Town and the expansion of its product range.<br />
Tyrecor – sole distributor of the INFINITY range of performance tyres - is also<br />
the sponsor of this quarter’s competition, so check out the story on page 36,<br />
click onto the competition option on page 48, answer a simple question and<br />
stand in line to win a set of performance tyres to the value of R3 500.00!<br />
Good luck!<br />
EDITOR
One-on-One • 3<br />
One-on-One with<br />
Hi-Q Honcho,<br />
Sean Harrison<br />
In keeping with the overall theme of this issue in<br />
which we take a dedicated look at what’s in store<br />
for the passenger tyre market, we decided it was<br />
time to pay homage to the man currently at the<br />
helm of Hi-Q – the successful retail franchise<br />
that was benchmarked in a recent survey.<br />
Sean Harrison is no stranger to the motor<br />
industry. His passion for marketing and his<br />
experience in the motor trade and in franchising,<br />
spans 19 years, courtesy of a number of posts<br />
within the motor sector, among them, a stint<br />
as Marketing Director of PG Glass prior to<br />
his current appointment. We asked him what<br />
drew him to the tyre retail business and for his<br />
thoughts on the current economic crisis.
4 • One-on-One<br />
Sean, perhaps we should dive right in and ask what you believe the<br />
industry should be doing to combat this economic crisis?<br />
The economy is largely driven by three factors: Consumer spend,<br />
government spend and direct foreign investment. When one considers that<br />
consumer spend alone accounts for as much as 70%, coupled with the fact<br />
that foreign investment is likely to dry up in the immediate term, chances<br />
are we’re in for a torrid time.<br />
However, my view is this: Why worry about things over which you have<br />
no influence? Instead, concentrate on your immediate business interests<br />
over which you have some control. Are we in for a rough period? Most<br />
definitely. But let’s not forget that from a retail perspective we’ve just come<br />
out of four years of unprecedented vehicle growth which means the car<br />
park is already out there.<br />
Even with consumers tightening the belt and reducing mileages, there’s no<br />
reason why the long-term effects should be catastrophic. Solid operators<br />
and networks will weather the storm.<br />
As far as what we should be doing as an industry to<br />
minimise casualties, I think the time has come for us to<br />
abandon that ‘one-size-fits-all’ mentality in favour of a more<br />
tailored approach, taking into account the varying needs of<br />
retailers positioned in different parts of the country.<br />
The other area of concern for me is the industry’s<br />
seeming obsession with buying rather than selling! I find<br />
it astonishing that the industry functions on its purchasing<br />
capability rather than on its sell-out, which is where the<br />
money is made! To effect change in this area however, will<br />
require a collective mind shift – a retailer can’t do it alone.<br />
As far as the manufacturing sector is concerned, I believe<br />
there’s work to be done on their part with respect to<br />
streamlining and aligning their product and service<br />
offering.<br />
You’ve been with Hi-Q for just over a year and have had time to get a feel<br />
for the industry. What drew you to your current position?<br />
I first became familiar with the Hi-Q group while I was still with PG Glass. For<br />
one, we shared the same media house. For another, I had become familiar<br />
with the brand and its history (having benchmarked against it in the past)<br />
and could therefore identify with the brand’s positioning.<br />
Hi-Q is an incredible success story, having speedily grown to a franchise<br />
boasting well over 175 franchise outlets across the country, and for that, full<br />
credit must go to my predecessors who engineered the company’s path to<br />
success in only 10 years. As the foundation of the company had already<br />
been laid, I felt excited at the prospect of channelling my motor trade and<br />
franchise experience into taking the brand to the next level, ensuring that it<br />
evolves alongside its customer base.<br />
❝<br />
Even with consumers<br />
tightening the belt<br />
and reducing mileage,<br />
there’s no reason why<br />
the long-term effects<br />
should be catastrophic.<br />
Solid operators and<br />
networks will weather<br />
the storm.<br />
Hi-Q was benchmarked in a recent survey. What do you believe were the<br />
key factors that contributed to this accomplishment?<br />
As I’ve just mentioned, the founders of this franchise developed a sound,<br />
trustworthy brand in a relatively short space of time, with limited resources,<br />
but a brand cannot survive on image and perception alone – it has to<br />
deliver!<br />
This might sound clichéd but we truly believe we have the best network<br />
in the country, one that is built on collaboration and close interaction. We<br />
share books, make decisions collectively and consult rather than dictate, all<br />
of which is not only refreshingly unique for me, but makes for an unbeatable<br />
combination.<br />
To go back to branding for a moment, external findings indicate the brand<br />
is moving in the right direction. It is funky, well accepted by the consumer<br />
and perhaps most important of all, is viewed as a mature product offering<br />
by the network despite its chronological age.<br />
Interestingly, external research further indicates that Hi-Q<br />
❞<br />
has a particularly high retention and referral rate, and for<br />
that, we’re immensely proud.<br />
How would you describe your role as franchisor?<br />
We are a support centre for the network – nothing more.<br />
Ours is a humble, non-intrusive role. Having elected<br />
to become inwardly focused in my first year in office,<br />
we’ve generated an important mind shift that included<br />
restructuring the team, altering remuneration packages<br />
and formalising quarterly national and regional councils<br />
to which the network can address immediate concerns,<br />
requests, suggestions and so on.<br />
Regional and national chairmans – who give of their time<br />
freely and for no personal gain – are elected by the group at large to<br />
represent the network and address issues, concerns and problem areas.<br />
The system has been in existence for some time, but a lot of dedicated<br />
time was spent this year working out the mechanics and fine-tuning the<br />
concept to everyone’s satisfaction. We’ve found the system works well and<br />
is in keeping with the consultative approach of the business. Plus, it ably<br />
demonstrates to the network that we take their suggestions and concerns<br />
to heart.<br />
Does this mean the network is not encouraged to come to you directly<br />
in the event of a problem?<br />
Not at all, my door is always open to address issues and concerns of<br />
grave importance that cannot wait to be addressed at the next quarterly<br />
meeting.
6 • One-on-One<br />
What sort of assistance do you provide apart from the norm?<br />
We have something we refer to as the ‘outlets in intensive care’ programme<br />
which provides specific timely assistance to any franchise within the group<br />
that might be experiencing a fundamental problem in their area. This is not to<br />
be viewed as a negative. Quite the opposite in fact, as the system enables us<br />
to identify a particular need, thereby allowing us to focus our full attention and<br />
whatever resources may be required on the franchise in question (at no extra<br />
cost) in order to help them out of their immediate situation.<br />
A network is only as strong as its standards and I’d like to believe our<br />
franchisees understand that. With everyone contributing to the collective<br />
with respect to aligning perspectives, we can achieve our goals both at a<br />
franchisee level and a franchisor level.<br />
Whenever I get to visit one of our franchisees (not as often as I would like),<br />
I constantly remind myself of my goal - to ascertain how I can add value to<br />
him, rather than what I’m going to get out of this meeting?<br />
What is your view on multiple brand-cum-franchise alliances?<br />
I must confess this was new to me. I found it a real challenge when I first<br />
began my career with Hi-Q as I had not previously been exposed to multibrand<br />
or multi-franchise arrangements. Ideally, I would prefer it if our network<br />
So where to from here?<br />
The strategy is simple. Go back to basics, achieve growth through our<br />
network rather than at its expense, and don’t attempt to grow the company<br />
at the expense of existing dealers by opening shops nilly-willy.<br />
was made up of single franchise alliances but I’ve come to<br />
understand that this market and the business model of the<br />
Can we take that to mean you’re not planning on opening<br />
industry as a whole, doesn’t always allow that. ❝<br />
new Hi-Q outlets in the immediate future?<br />
On a positive note, multi-franchising can ease the load Go back to basics,<br />
It’s not our primary focus, although we are looking to fill<br />
for a sole franchisor, whilst also making us aware of rival<br />
offerings that could be seen as adding more value to their achieve growth through<br />
some gaps in what we term ‘open points’. That said we are<br />
reaching the point of diminishing return. By and large, our<br />
businesses.<br />
the network rather than footprint is established which makes the decision to open<br />
a new outlet all that more drawn-out.<br />
at its expense, and don’t<br />
Yes, but don’t you run the risk of a breach in confidentiality?<br />
While there is always that risk, bear in mind, mature attempt to grow the<br />
operators want to make money out of all their outlets<br />
What is your stance on price discounting?<br />
and as such, are highly unlikely to jeopardise one for the company at the expense If you’re not market-related on price you’re out<br />
next. Our attitude is this: If you can’t control the situation,<br />
of the game! However, surveys have shown that<br />
of existing dealers.<br />
the next best thing is to be in a position to influence it.<br />
price only rates third in the list of requirements<br />
You certainly can’t concern yourself with the notion that<br />
❞ that drive consumer choice. At Hi‐Q, we live by the<br />
important information of a confidential nature might leak to<br />
your competitors. That is when you run the risk of becoming dictatorial.<br />
Suffice it to say we make a point of aligning ourselves with responsible<br />
operators and strive to keep in mind that competition is a good thing for<br />
both industry and consumer, in that it helps you to raise your game.<br />
simple principle of ASK (attitude, skills, knowledge),<br />
recognising that if the network fully embraces this concept, other<br />
more important elements such as brand and quality will automatically<br />
take preference over price.<br />
The important message we constantly communicate to the network is,<br />
‘how hard did you work for this particular margin?’ In life, you get what<br />
Are you a multi-brand operation?<br />
Yes. Goodyear is our biggest sell-out brand by far, followed by Pirelli,<br />
you deserve. The key in today’s market is to know who you are, position<br />
yourself accordingly and upsell!<br />
Michelin and Yokohama (accredited suppliers) and anything that is<br />
produced locally (approved suppliers). We pride ourselves in giving the<br />
customer what he wants but do not carry warranties for products that are<br />
not on our approved list.<br />
Are you enjoying your time in the tyre retail sector?<br />
Yes, I am. In many ways it’s familiar territory, while in others it’s a complete<br />
departure for me. As a corporate person, this has been a big learning curve<br />
What happens should someone within the group breach franchise<br />
as this is not a game whereby success is determined by the big leading the<br />
protocol?<br />
Our relationship with our network is very much like a marriage. If you keep<br />
raising the issue of breaches, you stand the risk of alienating your franchises.<br />
As mentioned previously, we prefer to adopt a consultative approach.<br />
small, but rather by the fast leading the slow.<br />
An Ivory Tower mentality won’t work here. Retailers need to come up with<br />
innovative solutions to problems on a regular basis. More important, their
8 • One-on-One<br />
response time to situations must stay true to their entrepreneurial instincts<br />
by reacting faster than the next guy, if they are to succeed.<br />
This requires empowering your management team as well as the network.<br />
I always strive to keep in mind that we must respect the faith a franchisee<br />
has placed in our brand. We owe it to him to support him! We cannot let<br />
him down!<br />
How would you sum up your vision for Hi-Q?<br />
In a nutshell, to entrench Hi-Q as the market leader. In many respects<br />
we’ve already achieved this, but have yet to come full circle. Our immediate<br />
challenge is to ensure a multi-product offering throughout the group that<br />
encompasses all under body components as well as tyres, so as to be able to<br />
come to market as a complete entity. If we manage this, the return is large.<br />
Do you have any thoughts on the industry at large?<br />
Our biggest challenge is skills development. We need to begin to take<br />
training a lot more seriously in this industry. That’s the only way to<br />
accomplish our collective goals as an industry.<br />
After completing a National Diploma in sales and marketing at NMMU<br />
in Port Elizabeth in 1989, followed by an Advanced Management<br />
Development Programme through Manchester Business School,<br />
ironically, Sean Harrison’s paying job was with Algorax in Port Elizabeth,<br />
so you could say, he’s come full circle.<br />
Sean Harrison joined General Motors as a Graduate in Training in 1990<br />
and spent time in their distribution division selling to the dealer network.<br />
In 1994 he joined Shatterprufe (Pty) Ltd (a division of the PG Group),<br />
and began a 14 year career with the company that encompassed: Export<br />
Services Team Leader, Sales Manager Aftermarket Division, National<br />
Sales and Marketing Manager. Later, he moved into the retail division<br />
(PG Glass) as General Manager Sales, Marketing and Operations and was<br />
finally promoted to Marketing Director of the retail division. A year and<br />
two months ago, he joined Hi-Q.<br />
Sean and his wife, Henriette, live in Port Elizabeth with the youngest<br />
of their three children aged 8 (the two eldest reside in Johannesburg).<br />
When he’s not solving the problems of the tyre retail sector, he can be<br />
found harnessing his skills on the golf course, scuba diving or on his<br />
off-road motorbike.
Focus on • 11<br />
Optimistic outlook for passenger<br />
tyre replacement market despite<br />
economic downturn<br />
With the global economic downturn uppermost on everyone’s mind, this year promises to be<br />
particularly challenging, even for South Africa, which thanks to its prudent monetary policies and<br />
more stringent credit lending practices, has not fallen victim to the credit control governance issues<br />
plaguing the US, Europe and the East. That said, we are not an island and are bound to feel the knockon<br />
effects of unstable markets, fluctuating currencies and global downsizing. The manufacturing and<br />
retail sectors are already being affected, as are imports and exports. Worst hit perhaps, is the motor<br />
industry, with vehicle sales slowing considerably as disposable income dwindles and consumer<br />
confidence wanes. Which begs the question: How will the economic downturn impact passenger<br />
tyre sales over the next 12 months?
The average age of the car park in <strong>SA</strong> is<br />
12 years but newer vehicles are fitted with<br />
low profile tyres which means the trade has<br />
to suitably cater for a diverse market.<br />
According to <strong>SA</strong>TMC spokesman, Dr. Etienne Human, South Africa’s<br />
total vehicle park is well over nine million vehicles, of which passenger<br />
vehicles account for approximately 58%. If we add caravans, other light<br />
load vehicles and unregistered vehicles, passenger tyres account for<br />
about 66% (or six million vehicles) of total market share.<br />
Says Human: “The average age of the car park for light passenger<br />
vehicles carrying less than 12 people is estimated at over 12 years (CSIR<br />
Transportek), the majority being older vehicles, which run on high profile<br />
tyres.”<br />
Newer vehicles are fitted with low profile tyres, thereby posing massive<br />
headaches for tyre manufacturers and distributors alike, who now have to<br />
suitably cater for both ends of the spectrum.<br />
Catering for a diverse market<br />
Says Dr. Luis Ceneviz, CEO of Dunlop Tyres: “We are focusing on<br />
producing the most popular sizes where we have economy of scale and are<br />
importing small volumes from Japan and Europe (origin of manufacture) in<br />
order to fulfil our obligation across all market sectors. I think it’s a good<br />
strategy since it wouldn’t be economically feasible to produce small runs<br />
of all the tyre sizes required.”<br />
Adds Derek de Villiers, Managing Director of Goodyear: “For a number<br />
of years now, local manufacturers have balanced viable local production<br />
with import of low volume sizes to be able to serve the market.”<br />
Of course, getting the mix right is not unique to the manufacturing trade.<br />
Carrying sufficient stock levels alongside running a lean operation remains<br />
a constant challenge for the distribution trade as well.<br />
Says Dave Davie, owner of 10 tyre shops in Kwazulu-Natal: “Diversity of<br />
sizes is a huge challenge, particularly as we strive to introduce new line<br />
items on a daily basis and pride ourselves in often carrying product the<br />
manufacturers don’t have. Storage space at smaller branches is a major<br />
issue, but we carry as much stock as space will allow.”<br />
Concurs Jody Roby, of the well known Jody’s Tyres Group: “Optimising<br />
stock levels is an ongoing challenge with the only positive being that<br />
one can probably reach turnover objectives with less units sold, through<br />
selling a bigger tyre.”<br />
Adds Mike King, Managing Director of Trentyre: “Stock is always a challenge<br />
but we carry out an in-depth analysis of size and type movement through<br />
our locations as well as assess any lost sales to determine model stocks.”<br />
As for Michelin, according to Chaumuzeau, the supply chain in South<br />
Africa poses an even greater challenge. He says: “This year we started<br />
working directly with our customers, dealers and retailers to define<br />
what we call ‘personalised forecasts’ with regard to stock requirements,<br />
price and commercial policy. Our main objective for the coming years<br />
is to establish a real and strong partnership with our dealers in order<br />
to help them secure their future. The next priority is securing a similar
Focus on • 13<br />
partnership with our industrial end users to help them increase their own<br />
competitiveness and remain strong in a difficult context.”<br />
Impact to the bottom line<br />
It is widely understood that a diverse product range carries with it cost<br />
implications, not only in terms of logistics but also with respect to duties<br />
to which imported tyres are subject.<br />
Add to that fluctuating raw material and oil prices coupled with a weak<br />
rand, and local tyre makers say they have little choice but to up tyre prices<br />
in the first quarter of 2009.<br />
Says Romano Daniels, General Manager Group Public Relations and General<br />
Manager for Marketing, Bridgestone: “Tyre prices will be adjusted in the<br />
first half of 2009 and on average, sell-in prices will go up by about 7%.”<br />
Michelin Tyres confirmed they too would be upping their prices on 1<br />
March by between 7-10% and further said prices could spiral yet again<br />
during the course of the year if the rand remains weak.<br />
When similarly questioned, Goodyear and Dunlop remained noncommittal,<br />
claiming they were monitoring the situation and that a lot<br />
would depend on currency movements and raw material costs.<br />
Says Eddie Jordaan, General Manager: Sales and Marketing, Continental<br />
Tyre: “Raw materials remain expensive. Of course the oil price and price<br />
of natural rubber has reduced just as dramatically as it escalated in 2008,
Focus on • 15<br />
but is now climbing again. However, the price of energy escalated<br />
dramatically, as has the cost of labour, steel and specialised chemicals and<br />
additives, not to mention the weak rand. Unfortunately all the manufacturers<br />
purchase raw materials from similar sources and as we cannot control the<br />
cost, it will inevitably have to be passed onto the consumer.”<br />
Pirelli Tyres also made mention of the raw material purchasing price<br />
and said they were hoping to keep these costs down through rigorous<br />
renegotiation of raw material purchasing agreements as well as by taking<br />
advantage of a phase of falling prices.<br />
When asked how they planned to remain competitive in the face of<br />
looming price increases and decreased consumer spending, improving<br />
plant efficiencies topped the list with all four local tyre makers.<br />
Says Daniels: “South Africa is moving from an exporter of raw materials to<br />
an exporter of finished goods in the quest to become a truly competitive<br />
participant in the global economy. To this end, plant efficiencies are part<br />
and parcel of every manufacturing plant in South Africa if we are to remain<br />
cost competitive.”<br />
Echoes de Villiers: “Management of cost and production efficiencies<br />
will always be the tools to remain efficient. Balancing supply and<br />
demand from both the local and export markets is and will remain the<br />
responsibility of management. This is part of an ongoing improvement<br />
process, irrespective of the economic situation.”<br />
Adds Ceneviz: “We have several plans in place to bring our plants’ output<br />
and efficiency in line with market demands. As our major endeavour is to<br />
maintain jobs, we are also exploring other options.”<br />
Alessandro Marchi, Managing Director of Pirelli Tyres <strong>SA</strong> concurs:<br />
“Globally, the Pirelli group has begun a profound restructuring plan<br />
as a way of confronting the effects of the current economic climate,<br />
the aim being, to guarantee conditions of maximum efficiency and<br />
competitiveness. This will be achieved through rationalisation of<br />
manufacturing structures, savings from lower energy costs and logistics<br />
and growth of manufacturing capacity in emerging markets such Latin<br />
America, Turkey and Romania.”<br />
Cheap imports may not decline<br />
Providing some likely respite for local manufacturers is the anticipated<br />
decline in the sale of imports courtesy of a weaker rand, although some<br />
suggest the current economic climate will have little or no effect on the<br />
demand and supply for cheapies.<br />
Explains Arthur Chaumuzeau, Marketing Manager for Michelin Tyres <strong>SA</strong>:<br />
“The South African market is not as attractive as it used to be due to
16 • Focus on<br />
the value of the rand versus the Euro and US dollar, thereby impacting<br />
cheap imports from Asian countries which are subject to 30% duty and<br />
currency movements such as the yen to the rand. This could actually<br />
help local producers by narrowing the gap between cheap imports and<br />
locally-made tyres.”<br />
Agrees Ceneviz, but cautions: “I think cheap imports won’t grow and<br />
might even decline since the rand devaluation has put pressure on<br />
imports in general. That said, the excess of production capacity around<br />
the world is another factor to be considered since manufacturers will be<br />
happy to export products on a marginal cost basis to keep their factories<br />
running to capacity.”<br />
Concurs Jordaan: “Cheap imports will always present a great challenge<br />
in that they occupy a high share of the growing market where consumer<br />
need is for a cheap product and where brand or performance is not part<br />
of the buying decision. I believe that cheap imports will find a way to keep<br />
and even grow their market presence.”<br />
OE versus replacement<br />
A dramatic decrease in the number of new vehicles sold will undoubtedly<br />
impact tyre sales to OE (original equipment) this year. According to<br />
Continental - an important contributor to the OE sector – OE sales are<br />
expected to drop by 20-30% this year, but they say the drop could be<br />
even more dramatic.<br />
Further suggests Marchi: “The global estimated effect will likely equate to<br />
an overall decrease of between 15-18%. Pirelli’s goal is to create value by<br />
confirming the selective partnership strategy in OE, focusing on quality<br />
and profitability. In addition, we will continue reinforcing our leadership in<br />
the high performance sector in the replacement market.”<br />
Says de Villiers: “The demand for new vehicles in South Africa has<br />
tapered down to the 2005 level of sales. There is clearly an impact as<br />
OEM’s are adjusting structurally to ensure their business is sustainable<br />
during the global economic tightening. In South Africa in particular, whilst<br />
reportedly endorsed by the Minister of Finance in his budget speech, the<br />
prospective buyer is subjected to the National Credit Act which has a<br />
significant impact on the rate of financing by banks.”<br />
Adds Jordaan: “On the positive side, the reduction in OE volume will<br />
mean that more key sizes will be available to be sold into the replacement<br />
market (there has been a shortage of key sizes especially in the high<br />
performance market segments).”<br />
Solid tyre retailers are likely<br />
to weather the storm.<br />
So while some of the shortfall could possibly be absorbed by the<br />
replacement sector, the question is, will it be enough to negate the losses<br />
incurred through poorer OE performance? Time alone will tell.
Tyre technology that’s<br />
miles ahead<br />
In fact, Bridgestone’s proprietary technologies put<br />
our truck and bus tyres in a league of their own.<br />
Thanks to exhaustive work at Bridgestone R&D centres<br />
in Japan, the U<strong>SA</strong>, Italy and elsewhere,<br />
every aspect of our tyres is superior.<br />
That means they are suited to all the demands<br />
of new generation high-speed heavy vehicles.<br />
Furthermore, they meet all local requirements,<br />
delivering the ultimate in performance<br />
at a lower operational cost.<br />
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18 • Focus on<br />
Passenger tyre sales in the replacement<br />
market are expected to grow by up to 5%<br />
Dealers are optimistic<br />
According to King, replacement market sales in 2009 will continue to be<br />
under pressure, although less affected than OE.<br />
Says King: “Cars sold two to three years ago when OEMs were selling<br />
significant volumes, are now coming up for tyre replacement, which is<br />
good for the replacement market. Notwithstanding, the next few months<br />
or perhaps years will require innovative retailing and serious customer<br />
service.”<br />
Davie is similarly optimistic: “Year to date we’re having our best year yet, with<br />
seven of our 10 branches recording their best month ever this last December!<br />
I don’t expect any major effect to the replacement sector this year. The fuel<br />
price is down so people will continue to use their cars. Granted, they do tend<br />
to squeeze a few more kilometres out of their tyres when times are tight, but<br />
as far as the current recession goes, I’m not all that sure precisely how it will<br />
affect the industry. Frankly, I’ve decided not to take part. Instead, I intend<br />
remaining 100% focused on my business. No serious retailer these days can<br />
afford to take his eye of the ball for one second!<br />
Roby agrees: “If anything, we’re expecting passenger sales in the<br />
replacement market to grow steadily this year, by as much as 4-5%. For<br />
our group of companies the current emphasis is on ensuring we live by<br />
the ‘good, better & best’ concept with respect to brands, optimising gross<br />
profit via services available, plus selling on a need satisfaction basis.”<br />
Adds Davie: “I only wish law enforcement would come to the party. Have<br />
you ever had your tyres checked by a traffic officer? I certainly haven’t –<br />
not in 32 years!”<br />
The last word<br />
Just how long this gloomy economic picture is likely to last or what the<br />
long-lasting effects to the industry will be are difficult to predict.<br />
Tyre sales to the OE sector will certainly reduce this year – everyone<br />
seems to be in agreement on that score. However, the recent boom<br />
years which resulted in a significantly high number of vehicles being sold<br />
should counter some of the ill-effects as many of these vehicles are now<br />
due for tyre replacement.<br />
Some dealers we spoke with are noticing a drop in demand for imported<br />
premium brands, while others say there’s been no effect whatsoever.<br />
Claims Davie: “We are not finding a drop in demand for imported top end<br />
product, quite the opposite in fact, due to the increasing number of sizes<br />
that aren’t being produced locally. Local manufacturers must be careful<br />
not to out-price themselves on their imported products.”
20 • Focus on<br />
Robey agrees: “You will always get the money shopper in the smaller<br />
sizes, but we don’t believe the premium brands in the larger sizes such as<br />
17, 18 and 19 inch are affected at this point in time.”<br />
Whilst also acknowledging that car owners with motor/mobility plans<br />
were sticking to the OE brands fitted, King said: “However, for vehicles<br />
out of warranty, drivers are definitely buying down.”<br />
Offers de Villiers: “Sales in the replacement market must be contextualised<br />
since OE vehicle sales only realise replacement sales later – therefore the<br />
impact is latent and the immediate impact is the character of the market,<br />
as consumers become ever more vigilant in the manner in which they<br />
apply their discretionary income.<br />
In short, and to quote one of King’s earlier statements, for now, the<br />
replacement market probably holds the key to survival and growth, but<br />
success in this area will likely depend on each operator’s ability to think<br />
out of the box, retail innovatively and provide unparalleled customer<br />
service.
Focus on Excellence Awards • 23<br />
Behind the Focus<br />
on Excellence Awards<br />
The story we ran on the Focus on Excellence Awards in December,<br />
sparked mixed reaction from the trade. We asked Charleen Clarke, editor<br />
or Focus Transport and Logistics magazine and awards administrator, to<br />
address some of the concerns raised by our readers.<br />
A late January 2009 weekend in the Western Cape witnessed the death<br />
of 24 people – six of them children – with a further 35 injured due to<br />
road accidents. Of the eight accidents reported, five were caused by<br />
burst tyres.<br />
According to the Department of Transport (DoT), 937 people died in 733<br />
vehicle accidents between 1 December 2008 and 5 January 2009 across<br />
the country. A Government website also reports that more than 15 000<br />
people die in traffic accidents each year in South Africa at a cost of R46<br />
billion to the economy.<br />
With such overwhelming statistics, several NGOs have launched marketing<br />
and education drives tackling the issue. The DoT too has taken proactive<br />
steps in targeting this epidemic, this year declaring that it would give priority<br />
attention to “road traffic law enforcement of public transport legislation;<br />
improved co-ordination amongst role players for increased targeted road<br />
traffic law enforcement; improved identification and management of<br />
hazardous locations; implementation of special law enforcement initiatives<br />
backed by effective advertising, education and communication campaigns”.<br />
Of concern is that, in practice, this increased traffic law enforcement keenly<br />
focus on monitoring the condition of vehicle tyres since, according to the CSIR,<br />
tyre failure is responsible for almost 20% of minibus accidents. Also, a 2002<br />
study by the DoT found that vehicle componentry factors were responsible for<br />
10% of road accidents; 56% of these were due to tyre bursts.<br />
Driving standards<br />
It was in support of such life-saving initiatives that the FOCUS on Excellence<br />
Awards was first conceptualised.<br />
“Our thinking at the time,” explains Charleen Clarke, managing editor of<br />
the awards administrator, FOCUS on Transport and Logistics magazine,<br />
“was that the commercial vehicle industry had much to offer in raising its<br />
own best practice standards, and in so doing improving South Africa’s road<br />
safety record.”<br />
The Excellence Awards is the only awards programme recognising the best<br />
of the freight and public transport industries, both in terms of product<br />
quality and service delivery.<br />
“Fitting the correct tyre, for example, can ensure reduced fuel consumption,<br />
and increased reliability, safety and cost efficiency,” Clarke continues.<br />
To ensure that the finalists are scientifically and objectively elected and<br />
evaluated, leading market research consultancy Scott Byers randomly<br />
selects companies from its database of over 20 000 transport operators and<br />
conducts a comprehensive telephonic survey. The company was chosen for<br />
its established reputation as market researcher in the commercial vehicle<br />
market. PricewaterhouseCoopers validates the final results.<br />
For further information or comments on the awards programme, please<br />
email Charleen Clarke at charleen@focusontransport.co.za
THE GOODYEAR<br />
HIGHWAY HEROES ARE HERE!<br />
;OLYLHYLO\UKYLKZVMOLYVLZVU[OLYVHKZVM:V\[O(MYPJH.VVK`LHY^HU[Z[VRUV^^OV[OL`HYL>LOH]LSH\UJOLKHWYVNYHTTL[VÄUKHUK<br />
OVUV\Y[OVZLJVTTLYJPHSKYP]LYZ^OVZLZLSÅLZZHJ[ZVMOLYVPZTOH]LZH]LK[OLKH`TH`ILL]LUZH]LKSP]LZ<br />
0[»ZJHSSLK;OL.VVK`LHY/PNO^H`/LYVLZHUK`V\HYLPU]P[LK[VNL[PU]VS]LK/H]L`V\^P[ULZZLKHJHZLVMSPMLZH]PUNIYH]LY`VUV\YYVHKZ&<br />
+V`V\RUV^VMHKYP]LY^OVOHZWLYMVYTLKHUV\[Z[HUKPUNO\THUP[HYPHUHJ[&<br />
Nominate them as your Highway Hero! Go to www.goodyear.co.za<br />
;OL/LYVVM[OL`LHY^PSSILJYV^ULK^P[OMHTLHUKMVY[\ULUH[PVUHSTHNHaPULL_WVZ\YL9PUJHZOHUKH[YPW[V3\_LTIV\YN,\YVWL<br />
;VNL[OLY.VVK`LHYZ[YP]LZ[VTHRL[OLYVHKZVM:V\[O(MYPJHZHMLYMVYHSS You can help – nominate your Hero!
15025
26 • Manufacturing<br />
New MD for<br />
Goodyear <strong>SA</strong><br />
Goodyear’s EEMEA (Eastern Europe, Middle East and Africa) President, Michel Rzonzef, has<br />
announced the appointment of Jean-Jacques Wiroth as Managing Director for Goodyear Tyre and<br />
Rubber Holdings. He replaces Derek de Villiers who is retiring after more than 34 years’ service<br />
with the company. Wiroth, currently Managing Director for Dunlop in Germany, will be based in Port<br />
Elizabeth and will report to Rzonzef. The appointment is effective 1 April.<br />
Says Rzonzef: “Jean-Jacques is a very experienced professional, having held senior appointments in both<br />
regional and country positions. I am very pleased that he will be leading our South African operation,<br />
which has made a great deal of progress in the past few years under Derek’s leadership. In Germany<br />
Jean-Jacques has done an excellent job, developing the Dunlop brand to the point that it is now the leading<br />
brand in the marketplace.”<br />
Wiroth joined Goodyear in Luxembourg in 1982 as a chemical engineer, working in the compounding<br />
section. He held several assignments, mainly working in OE (Original Equipment) tread compounding,<br />
before being appointed Product Manager Consumer Tyres Europe in 1994.<br />
In 1997 he moved to the U<strong>SA</strong> as Marketing Director for North American Tyre’s consumer tyres. In 2001<br />
he moved to Brussels, Belgium, as Director OE Sales and Marketing and in 2005, transferred to Germany<br />
as Managing Director for the Dunlop brand. Wiroth received his degree in chemistry from ETH University<br />
in Switzerland. The 52-year old Wiroth, who is a citizen of Luxembourg, is married to Petra and they have a<br />
daughter.<br />
Paying tribute to de Villiers, Rzonzef says: “Derek has been a strong leader for many years, both in South Africa<br />
and the Middle East. He is highly regarded by his peers both inside and outside the company. We thank him<br />
for his considerable contributions.”<br />
De Villiers was appointed Managing Director in South Africa in 2006, having previously been Managing Director<br />
of Goodyear’s Middle East region since 2001. Prior to that, he was Managing Director of Tredcor (the holding<br />
company for Mastertreads and Trentyre) in Cape Town. The company later became consolidated as Trentyre,<br />
owned by Goodyear Tyre and Rubber Holdings.<br />
Passmore’s <strong>SA</strong> career is shortlived<br />
At the time the March issue of <strong>SA</strong> <strong>TREADS</strong> went to press we got word that our former interviewee, Mr Gareth<br />
Passmore, had unexpectedly left Continental Tyre <strong>SA</strong>, so we asked Eddie Jordaan, General Manager: Sales &<br />
Marketing for an official comment on the matter:<br />
“Gareth Passmore left Continental by mutual agreement in order to pursue other opportunities outside of<br />
Continental.”<br />
The position is yet to be filled. We will report on a new replacement in due course.
28 • Manufacturing<br />
Dunlop flights<br />
striking new TV ad<br />
Picture this – fast cars, amazing precision driving stunts and an impressive<br />
finale – no – it’s not the newest James Bond release, it’s the new Dunlop<br />
Tyres commercial that was recently created by Durban-based advertising<br />
agency, O’Donoghue & Associates.<br />
The commercial, which is currently being flighted on television channels<br />
in South Africa, sees a host of yellow Dunlop Tyre clad cars converging on<br />
the city of Cape Town to perform a series of impressive high-tech precision<br />
driving stunts that ultimately enable the cars to form the word ‘Dunlop’.<br />
The advertisement has met with positive feedback. Having recently rebranded<br />
their identity, Dunlop Tyres approached O’Donoghue & Associates<br />
to develop an advertising campaign that would be both memorable and<br />
unique. They were looking for ‘the big idea’ that would cut through advertising<br />
clutter and be unmistakably Dunlop; essentially separating them from other<br />
tyre brands.
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30 • Talking Tyres<br />
by Colin Mileman Run-flat<br />
Tyres<br />
First-world rules for third-world reality<br />
The concept of run-flat tyres is a brilliant one, with the main advantages<br />
revolving around improved driving safety. But is it really suitable for South<br />
African roads?<br />
Despite being a first-world solution, on face value, run-flat tyres make fantastic<br />
sense in South Africa.<br />
No-one wants to become another devastating addition to the deplorable<br />
crime statistics after being forced to stop on the side of the road to change a<br />
tyre, or facing the dangers of doing so in traffic. Therefore the ability to drive<br />
to a safe location, even at a snail’s pace, has real merit.<br />
Also, the general calibre of driving talent in this country is less than<br />
commendable, so the prospect of swapping a horrendous blow-out for<br />
stable handling characteristics, backed up by a monitoring system’s subtle<br />
electronic warning that a tyre is losing pressure has great appeal.<br />
Car designers will also tell you that throwing the spare wheel and jack in<br />
the bin frees up the creativity of their pen strokes, while engineers will point<br />
to the complementary benefits of reduced vehicle weight and the resultant<br />
improved fuel efficiency, as well as the increased boot space it achieves.<br />
But this is where I stick my flag in the ground and say that currently in <strong>SA</strong>,<br />
unless you habitually travel no more than 80 km from a mainstream metro<br />
tyre dealer (which in a car-mad country devoid of public transport is highly<br />
unlikely), run-flat tyres are totally unsuitable and irreconcilable with <strong>SA</strong><br />
motorists’ needs.<br />
My main rationale revolves around the South African map. Examining a run-flat<br />
tyre support network map provided by one tyre manufacturer, I was drawn to<br />
the vast 1 200 km void that separates Bloemfontein and Cape Town on the N1.<br />
Now I, for one, don’t want to be stranded with a flat, um… run-flat tyre in the<br />
middle of a 45-degree Karoo summer, literally hundreds of kilometres away<br />
from a suitably qualified and (expensively) equipped RFT centre where the 80<br />
km range at 80 km/h just won’t cut it.<br />
In Europe, 1 200 km will get you from Paris in France, through Germany to<br />
Austria’s capital Vienna – and you’ll probably never be more than 50 km away<br />
from a major city, or a first-world run-flat specialist. So there the concept<br />
works. But in good ol’ <strong>SA</strong>, where vast open spaces abound (think Northern<br />
Cape, where most tyre companies have just one run-flat centre for the largest<br />
province in the country), that’s simply not the case.<br />
And that’s assuming you’re able to drive the nominal ‘run-flat’ distance in the<br />
first place. Considering the decrepit nature of many local roads, a complete<br />
tyre-and-rim write-off due to a pot-hole or a strategically placed rock will<br />
stop you dead in your tracks, and could leave you totally immobile for many<br />
lonely and potentially dangerous hours, and hundreds of kilometres away<br />
from help.<br />
Without giving the customer any choice in the matter, and based on the<br />
Eurocentric nature of the <strong>SA</strong> market, BMW insists on fitting run-flats to its<br />
new-generation products including the popular 3-Series, along with the 1<br />
and 5-Series, the MINI, the X5 and X6. Why run-flats are specified on a sport<br />
utility vehicle (or whatever BMW chooses to call their X-models) is beyond<br />
me, considering their supposedly multi-terrain nature.<br />
BMW backs this up with the supposed reassurance of BMW On-Call<br />
assistance in the event of a flat tyre. But if I’m stranded in Putsonderwater<br />
where the one and only horse died long ago, I’ll face a similar fate before a<br />
replacement tyre arrives.<br />
This brings me to the issue of availability. On a recent media event, of all the<br />
vehicles on the trip, a BMW X6’s 20-inch 35-profile tyre was the one and only
Talking Tyres • 31<br />
casualty after encountering an errant rock on a gravel road. As no replacement<br />
tyre (naturally, fitted to the appropriate and costly rim) was immediately<br />
available, the 800-grand X6 had to endure the ignominy of travelling back to<br />
Pretoria on a flat-bed. Imagine the fury if you were the owner …<br />
And it’s not just the ultra-exclusive sizes that are problem. I contacted a<br />
couple of tyre dealers around the country to determine the availability of<br />
various sizes of run-flats. Several dealers indicated that they didn’t carry stock<br />
of run-flats at all. Some had a few of the more ‘popular’ sizes, but would<br />
have to call on regional or national distribution centres for the most part.<br />
Therefore, expect a delay ranging from one hour, or even one to two days<br />
to get your rubber – and that’s assuming there are any suitable tyres in the<br />
country which, shockingly, isn’t always the case.<br />
The main reasons the tyre dealers cited for the lack of run-flat stock were<br />
the huge variety of sizes and tread patterns, the very low demand and the<br />
massive cost. One multi-brand tyre dealer suggested an outlay of R100 000<br />
would be required just to carry a single set of run-flat tyres for each brand<br />
he represents.<br />
That cost also relates to the consumer. Based on my brief survey, which<br />
priced a total of 10 tyres from various brands and tyre dealers across the<br />
country, run-flats are on average 35-percent more expensive than standard<br />
replacement rubber – with a high of 65 % and an unusual low of 10 %.<br />
Add in the additional expense of a mandatory tyre pressure monitoring<br />
system (about R5 000) and that run-flat repairs are generally discouraged<br />
(or very expensive to do, by specialists only), and the whole run-flat concept<br />
becomes rather costly.<br />
Run-flat repairs are<br />
generally discouraged<br />
which adds to the cost.<br />
Fitment capability<br />
and availability remain<br />
a problem.<br />
Factor in the huge complexity of the technology, with all the confusing jargon<br />
and marketing-driven acronyms: full marks for Yokohama simply referring to<br />
Run Flat, while Bridgestone uses RFT, Dunlop DSST, Goodyear EMT and ROF,<br />
Michelin ZP and Continental SSR, while BMW has its very own RSC mark.<br />
Plus there’s unresolved issues surrounding the additional unsprung mass of<br />
the tyre necessitated by the extensive sidewall strengthening. Logically, this<br />
makes it both less efficient due to increased rotational mass, and reduces the<br />
pliancy and comfort of the tyre – although tyre and car manufacturers are<br />
making ongoing progress in these areas.<br />
All considered, if I lived in Europe, run-flats would be a no-brainer. But I don’t,<br />
so they’re not.<br />
Colin Mileman is a freelance motoring journalist, photographer<br />
and advanced driving specialist with over 13 years of experience<br />
in this field. As a former editor of Topcar and Topbike magazines,<br />
he’s as enthusiastic about cars and bikes as they come, and has<br />
extensive knowledge of all motoring-related matters, including<br />
the topic of tyres, having run the annual and highly regarded<br />
Topcar tyre tests for several years.
32 • Dealer profile<br />
Speedy Witbank has achieved<br />
growth in recent years despite<br />
stiff competition.<br />
Speedy does it!<br />
Johan Grobler
Dealer profile • 33<br />
On the face of harsh economic times, quite<br />
surprisingly, one fitment centre in Mmpumalanga’s<br />
fastest growing city – Witbank – is experiencing<br />
unprecedented growth. Former farmer and<br />
businessman, Johan Grobler, attributes this to his<br />
long-standing track record in the community as<br />
well as to his ability to read the marketplace and<br />
react quickly to changing market conditions.<br />
Service packages exclusive to the Speedy Group of companies (now<br />
numbering 140 across the country), such as the ‘Miles More’ programme<br />
which offers motorists free tyre puncture repair, tyre rotation and rebalancing<br />
for the duration of the tyre’s life, have gone a long way towards<br />
attracting customers to his doors. Add to this his decision last year to lower<br />
his GPs in reaction to the economic crisis, and Johan says what he’s lost in<br />
margin he’s made up for in volume.<br />
More important, Johan is a sterling example of the adage that when it comes<br />
to purchases of any kind, people buy people. His father was the Mayor<br />
of Witbank, his wife is a respected member of the community courtesy<br />
of her position of Science teacher at the local high school, while Johan is<br />
well-known to the residents of this predominantly mining community for<br />
his previous, 15-year involvement in two service stations which he owned<br />
and managed. As a keen sportsman, Johan is also passionate about his golf,<br />
and tennis (his team won the trophy four years in a row for the Waterberg<br />
District), something which stands him in equally good stead with the city’s<br />
residents.<br />
Not taking anything for granted, Johan has also made a point of building up<br />
a strong rapport with the motor dealerships in his area, whose support he<br />
continues to enjoy, despite the presence of numerous rival shops on his<br />
very own street.<br />
Says Johan: “I’m lucky to have the loyal following of so many Witbank<br />
residents. Notwithstanding, I fully recognise that we need to deliver on our<br />
service offering if we are to retain our clientele.”<br />
Retaining customers probably rates as his biggest challenge in the current<br />
economic climate where a mere R5.00 can make all the difference between<br />
gaining and losing a sale.<br />
Unlike most Speedy outlets for which tyres make up a smaller portion of<br />
the business, Johan’s operation boasts a 50/50 split between tyres and<br />
underbody components such as exhausts, shocks, batteries, brake pads,<br />
bull bars, tow bars and nitrogen in tyres.<br />
Explains Johan: “Selling tyres is a lot easier in that it helps to draw customers<br />
to your doors. It’s also the ideal time to pick up on secondary sales resulting<br />
from worn shocks, brakes and the like.”<br />
Interestingly too, contrary to what has become the norm due to market<br />
trends, Johan’s exhaust fitment side to the business is buzzing with three<br />
of his 12 fitment bays dedicated exclusively to the exhaust portion of the<br />
business.<br />
Says Johan: “There’s only one other company offering an exhaust service in<br />
this city which probably accounts for our success in this area.”<br />
To add to his product range, Johan is also considering introducing a<br />
suspension service to further provide his loyal customers with yet another<br />
important service at a reasonable price.<br />
Adds Johan: “Consumers are being quoted outrageous prices on tyres,<br />
towbars and suspension systems in particular, and perhaps our willingness<br />
to accept their financial constraints owing to the economy, also accounts<br />
for the fact that our shop is close on ¾ full at all times.<br />
“Add to that the ongoing support from Bridgestone and Speedy’s head<br />
office, and we’re luckily well placed to weather the current storm.”<br />
The immediate focus is on providing customers with a good shopping<br />
experience that keeps them coming back as well as preparing for the future<br />
boom, which according to Johan, is inevitable given the proposed growth<br />
of the region.<br />
Claims Johan: “Eskom’s second power plant opens in Witbank next year<br />
and this should draw thousands of new people to the region. And the<br />
development of Ernie Els’ golf estate, as well as other similar projects,<br />
should spur further growth in the not too distant future. The boom times<br />
will return, and new tyre shops will open in response to this. We must do<br />
everything in our power to ensure we’re ahead of the game as we prepare<br />
to take on new competitors head on.”<br />
Plans to expand his operation are on the cards with the prospect of<br />
additional stores in and around Witbank, which should also serve to secure<br />
current and future market share, particularly if Johan sticks with his current<br />
formula which arguably, is reaping dividends.
34 • New Initiative<br />
ON THE HUNT FOR HIGHWAY HEROES - Dustine Gascoyne<br />
(Goodyear Marketing Director) heads up the new national<br />
campaign aimed at recognising the valuable contributions<br />
truck and bus drivers are making to road safety.<br />
Goodyear on the hunt<br />
for Highway Heroes<br />
With traffic expected to mount over the Easter<br />
holiday season and South Africa steels itself for<br />
an increasing number of accidents on its roads,<br />
Goodyear’s ongoing commitment to safety has<br />
been boosted with the launch of its prestigious<br />
new Highway Hero campaign, launched in<br />
Johannesburg in December 2008.<br />
The programme aims to scout out, recognise and reward some of our<br />
country’s least acknowledged road warriors: the professional truck and<br />
bus drivers who have performed barely noticed yet frequently life-saving<br />
acts of heroism or humanitarian deeds while going about their daily work<br />
on our busy highways.<br />
The Goodyear Highway Hero is already recognised as one of the truck and<br />
bus industry’s most respected award programmes in places like the United<br />
States, Australia, Germany and Latin America.<br />
Goodyear Marketing Director, Dustine Gascoyne said the programme was<br />
founded in America in 1983, when long-hauler, Ronnie Stapleton, was<br />
named Goodyear’s first Highway Hero. Ronnie used his bare hands to tear off<br />
the back door of a burning car, then broke the vehicle’s back seat in two to<br />
save the vehicle’s unconscious occupants.
New Initiative • 35<br />
“Through innovation and technology<br />
Goodyear has made great strides<br />
in the field of safety. The launch of<br />
the Highway Hero programme in<br />
South Africa reflects this important<br />
contribution and reinforces Goodyear’s<br />
new brand positioning of ‘Safety<br />
Together’,” Dustine explained.<br />
glittering final award ceremony, to be held in January 2010, where South<br />
Africa’s first Goodyear Highway Hero will be announced,” he added.<br />
The rewards include not only a prestigious trophy but also R10 000 in cash, an<br />
all-expenses paid trip to Goodyear’s exciting Technical Centre in Luxembourg,<br />
Europe, for the winner as well as the same trip for one management<br />
representative from his or her company and, of course, the well-deserved glory<br />
of being recognised as the Goodyear Highway Hero 2009.<br />
“Almost every day, truck and bus drivers<br />
make valuable contributions to road<br />
safety. We want to elevate their image<br />
and create public awareness of those<br />
responsible members of the industry<br />
who go beyond the call of duty. ‘Hero’<br />
is a special label, but there certainly are unsung heroes on our roads who<br />
deserve to be rewarded for their selfless efforts.”<br />
Highway Heroes in other parts of the Goodyear world have included those<br />
who have pulled injured passengers from burning vehicles, one who rescued<br />
an old woman from her sinking car after it veered off the road into a river,<br />
another who displayed huge posters on his rig of missing children to raise<br />
awareness as he drove and yet another who swerved his truck to avoid three<br />
street-racing cars and veered off the highway to avoid colliding with oncoming<br />
traffic. This last courageous and selfless driver died in the accident.<br />
Goodyear’s nationwide search for its own South African Highway Hero will<br />
run throughout 2009 and repeated annually thereafter. The programme<br />
was launched to prominent players and the media in the truck and bus<br />
sector on 10 December. The call for nominations from the general public,<br />
the truck industry and law enforcement agencies will be supported by<br />
various marketing initiatives via the media, industry associations and law<br />
enforcement agencies. “We will also publicise the campaign on late-night<br />
radio programmes – when many truckers are driving and tuned in – in<br />
which people can call in and tell their stories of heroism. Toll gate flyers are<br />
another innovative way in which we plan to spread the word and there will<br />
also be information at Trentyre, Tirepoint and Hi-Q dealerships. Nomination<br />
forms will also be available online through www.goodyear.co.za,” said Myles<br />
Dent, Marketing and Communications Manager for Goodyear <strong>SA</strong>.<br />
“Nominations will be tallied and judged every three months. The finalists<br />
from each quarter will receive media recognition and will go forward to a<br />
NATIONWIDE SEARCH FOR <strong>SA</strong>’s OWN HIGHWAY HERO - Sharmini Naidoo (Road Freight<br />
Association CEO), Dustine Gascoyne (Goodyear Marketing Director) and Gary Ronald<br />
(Automobil Association Public Affairs Manager) at the launch of the prestigious new<br />
Highway Hero campaign. Various road safety and transport related associations such as<br />
these are endorsing this campaign with enthusiasm.<br />
SEARCHING FOR OUR COUNTRY’s LEAST ACKNOWLEDGED ROAD WORRIORS -<br />
Sharmini Naidoo (Road Freight Association CEO), Derek de Villiers (Goodyear Managing<br />
Director) and Jeff Osborne (Retail Motor Industry CEO) at the launch of the prestigious<br />
new Highway Hero campaign. The programme aims to recognise and reward professional<br />
truck and bus drivers who have performed barely noticed yet frequently life-saving acts of<br />
heroism while going about their daily work on our busy roads.<br />
DRIVEN BY INNOVATION<br />
BECAUSE NOT ALL TYRES<br />
ARE THE <strong>SA</strong>ME _
36 • Company Profile<br />
Tyrecor extends product range<br />
and moves into own premises<br />
In contrast to the current economic doom and gloom that surrounds<br />
us, a local tyre tyre company specialising in quality imported products,<br />
is defying the odds and is not only regularly extending its product<br />
range to cater for a diverse market sector, but is further demonstrating<br />
its commitment and confidence in the South African market via the<br />
construction of its own regional warehouse in Cape Town. On 1 March<br />
2009, Tyrecor will take occupancy of brand new facilities, as a bold<br />
statement that says to the market, ‘we’re here to stay’.<br />
Established in Johannesburg in March 2002, to primarily service the needs<br />
of end users in a growing and specialised industrial tyre market, the Tyrecor<br />
Group has since grown to include outlets in Durban and Cape Town, as a<br />
way of providing a national service to its mushrooming client base.<br />
Servicing the industrial and agricultural tyre industry in South Africa and<br />
parts of Africa, along with providing them with tailor-made solutions to<br />
their specific needs and challenges, remains the mainstay of the company’s<br />
business, although recently, Tyrecor also concluded a joint venture with a<br />
financial partner, the Al Dobowi Group.<br />
Established in 1976 to address the needs of a growing tyre management<br />
and service industry in the Middle East, Al Dobowi is now a leading global<br />
player, having moved beyond tyre management into providing customers<br />
with a complete solution when it comes to batteries for motive power,<br />
lubricants, conveyor belt systems and technical rubber products.<br />
The INFINITY brand<br />
The partnership has been worthwhile for Tyrecor on another level too, as it<br />
provided the South-African based importer with the advantage of acquiring<br />
the INFINITY range of products, thereby paving the way for entry into all<br />
sectors of the Southern African tyre market with a comprehensive range of<br />
quality products.<br />
Successfully launched in the last 24 months, the INFINITY range extends<br />
from passenger tyres, up to and including OTR, mining and industrial
Company Profile • 37<br />
Tyrecor’s new premises in Cape Town<br />
will be home to the INFINITY and<br />
Alliance tyre brands.<br />
solid tyres. Manufactured under licence in China, in a facility with an<br />
annual turnover exceeding 1.03 billion pounds, the brand has earned a<br />
reputation for attention to detail, quality and customer satisfaction. It is also<br />
manufactured to ISO14001:2004 standards, carries ECE certification and<br />
has been homologated by NRCS.<br />
Turn to our Competition section on page 48 for details on how you could<br />
stand a chance to win a set of high performance INFINITY tyres to the<br />
value of R3 500.00!<br />
Taishan finds acceptance with agricultural sector<br />
What is more, Tyrecor has secured distribution rights for the Taishan brand,<br />
as a means of further enhancing its product range in the bias agricultural<br />
tyre market, which to this day, remains an important component, both in<br />
terms of quality and affordability. Again, Taishan is manufactured to strict<br />
ISO9001 and ISO9002 quality management systems in China, which<br />
probably accounts for its ability to secure global market share in no less<br />
than 40 countries worldwide.<br />
From a South African perspective, Taishan has adopted a ‘first class or scrap’<br />
policy for all tyres manufactured which in turn, provides the assurances<br />
required by Tyrecor to represent the brand locally.<br />
Says Charl de Villiers of Tyrecor: “That the Taishan brand has already found<br />
acceptance with agricultural buyers across Southern Africa (traditionally<br />
known to only support products that deliver), is testament to the product’s<br />
integrity.”<br />
Tyrecor teams with Alliance Tire<br />
As if this weren’t enough, Tyrecor has also teamed with Alliance Tire<br />
(established in Israel in1950), a multinational company with a core team<br />
of 50 engineers in R&D, with interests in the development, manufacture<br />
and sale of tyres for agricultural, forestry, construction and earthmover<br />
applications.<br />
In July 2007, Alliance Tire was acquired by the Mahansaria family of India<br />
together with Warburg Pincus LLC. Currently, a new plant, boasting a land<br />
area of 460 000sqm is under construction in India and will be operational<br />
in June 2009.<br />
Alliance Tire has over 1 200 active and specialised items which are rapidly<br />
being expanded and the Group is focused on providing a comprehensive<br />
product range to cater to the off-the-highway tyre market, encompassing<br />
both high-end technology and mass market product lines.<br />
Tyrecor seizes window of opportunity<br />
Trust a group of talented South African entrepreneurs to look for the<br />
window of opportunity and seize it! That is precisely what Tyrecor has done,<br />
and despite the current economic challenges, the company’s future looks<br />
promising.<br />
Says de Villiers: “As importers it has become essential to find a balance<br />
between the correct stock holding and cash flow, due to the volatility of our<br />
local currency. These challenges aside, as a group, we are determined and<br />
committed to increase our product range and visibility in South Africa over<br />
the next 12 to 18 months.”
38 • ProFleet<br />
ProFleet promises tyre<br />
management excellence<br />
B550501 - AFROX<br />
Graph Details<br />
Remove 30 days<br />
10<br />
1<br />
ON Vehicle Inventory Avg Qty<br />
77 17<br />
9 Qty New Tires 171 114 1 10<br />
Description 9 1st Cap 68 4 23 38<br />
2nd Cap 430 Other Totals Filters/Selections<br />
Size: 12R22.5<br />
With 67 well-managed fleets already<br />
utilising the ProFleet software<br />
in Africa, following its official<br />
launch in South Africa in 2000,<br />
this unique tyre management<br />
tool from Bandag, appears to be<br />
gaining swift acceptance with a<br />
growing number of transport<br />
fleets, among them, Parmalat,<br />
Afrox, RTT, BP, Fast ‘n Fresh,<br />
Algoa Bus Company and<br />
Karan Beef.<br />
Research and development<br />
for this software system was first instituted in 1983, by<br />
Budini Inc. Today, ProFleet is used in 33 countries in five continents and is<br />
exclusively available to Bandag <strong>SA</strong> for sub-Saharan Africa.<br />
With scrap tyre analysis data, breakdown information and fleet survey data<br />
now all available in one system, ProFleet ensures complete cradle to grave<br />
tyre management, assisting its users in identifying problems and taking<br />
corrective action before tyre life is compromised.<br />
Close examination of why tyres fail and are scrapped, can ensure<br />
prevention of avoidable failures, while a complete breakdown history will<br />
highlight specific trends that too could be avoided, resulting in an overall<br />
cost reduction for the fleet.<br />
Issued on 19/02/09 - 11:51<br />
Tire Management System 5.x<br />
[Graph type II - Integer Graph]<br />
complete control of tyre stock and can further predict future tyre needs<br />
(by using past trends and product performance history) – a widely popular<br />
feature with many ProFleet users in that it assists with planning and in turn,<br />
results in more accurate budgeting.<br />
What is more, it comes with a set of hand-held tools to ensure fast and<br />
precise data entry, ideal for both the user who, with the device in hand, can<br />
download vehicle and tyre data to the device as well as fitters who can now<br />
easily and accurately capture tread depth and air pressure readings, which<br />
are then uploaded to ProFleet. Using the tools, tyre fitters and supervisors<br />
can now also complete tyre movements and scrap analysis.<br />
Benefits range from time saving, allowing on-site personnel to deal with<br />
maintenance and preventative issues rather than spending time on data<br />
capturing, to ensuring the correct readings are uploaded, giving you the<br />
confidence that the data stored in and extracted from ProFleet is reliable.<br />
The Fast ‘n Fresh depot in Centurion is a typical site of where the tools work<br />
best. With more than 2 000 rolling wheels to manage, the Thomas Tyres<br />
crew does a sterling job of ensuring the pressures are monitored and the<br />
tread depth adheres to the fleet’s tyre policy.<br />
For more information contact<br />
Bandag on (011) 439-6000 or<br />
visit www.bandag.co.za<br />
The report filtering feature of the system allows for performance to be drilled<br />
down to a specific wheel axle and by utilising the fleet’s own data, an analysis<br />
can be drawn up to determine which new or retread make and design is best<br />
suited to the fleet’s application, thereby further ensuring the best product is<br />
consistently selected for best maximisation of the tyre budget.<br />
And not only can ProFleet monitor tyre performance, it also ensures<br />
With the reliability you get from Bandag, your fleet can take on anything.<br />
www.bandag.co.za<br />
8182 Bandag Strip Ad.indd 3 5/15/08 4:39:38 PM
40 • Distribution<br />
Trentyre<br />
celebrates<br />
successful<br />
2008<br />
Michel Rzonzef, President of Goodyear’s<br />
Eastern Europe Middle East & Africa<br />
Countries (EEMEA), and Mike King,<br />
MD of Trentyre.<br />
2008 was a pivotal year for Trentyre. The company exceeded expectations<br />
and delivered positive results by successfully implementing its strategy.<br />
With a strong focus on delivering quality service to customers, Trentyre<br />
was an important role player in the Goodyear group strategy in South<br />
Africa.<br />
Michel Rzonzef, President of Goodyear’s Eastern Europe Middle East &<br />
Africa Countries (EEMEA), spent a day with the Trentyre leadership team in<br />
Johannesburg during his recent visit to the country.<br />
“I am very proud that Trentyre has made the turnaround and delivered the<br />
results,” said Michel. “They did what they said they would. I have seen a very<br />
confident team who is happy to work together and who are very upbeat about<br />
their business prospects.<br />
Trentyre boasts strong leadership, people who are extremely business<br />
minded, focused and close to their customers and the branch teams. They<br />
listen to their own branches to really identify what can and should be done<br />
differently to improve the operations.<br />
Their clear strategy is continuously communicated to the team and draws a<br />
high level of cohesion and alignment across the company. Customers are seen<br />
as the cog of the Trentyre wheel with the branches revolving around them.”<br />
Find Solutions<br />
2008 taught the Trentyre team the value of commitment and was proof of the<br />
resilience of its people.<br />
“It is certainly not said lightly, but Trentyre and its people truly epitomise<br />
a culture of not giving up and always finding a solution for the customer,”<br />
says Mike King, Managing Director. “Each and every employee should feel<br />
particularly proud of the organisation’s achievements. Everyone’s contribution<br />
added to our results.<br />
Although 2009 will be very different given fiscal circumstances, the leadership<br />
team has carefully considered the direction they need for the company.<br />
“We believe that we are well positioned to make significant progress this<br />
year. The people’s resilience, spirit and commitment to the success of the<br />
organisation, will lead us to even more success,” says Mike.<br />
2009 can be a Record Year<br />
Although the turmoil of the world economy is on everyone’s mind, the South<br />
African economy will be less impacted than major global markets. It will be<br />
more important than ever for Trentyre to work closely with its customers and<br />
to support their business in these volatile times.<br />
“I am convinced about the growth opportunity of the local market. The Trentyre<br />
turnaround in 2008 has positioned the company to win in this environment.<br />
I believe we will make the difference compared to our competitors and that<br />
2009 will be a record year for Trentyre,” says Michel.<br />
Trentyre is Goodyear’s main distribution channel of commercial tyres in<br />
South Africa. The strong Goodyear brand, together with Trentyre as the<br />
service provider, will outperform the competition. Through the Trentyre<br />
branch and retread factory network, this partnership has a unique offering<br />
in the market place.”<br />
First with people<br />
In December three Trentyre employees were presented with the “First<br />
with People” awards. The purpose of the award is to provide recognition to<br />
individuals in the various EEMEA countries where Goodyear operates and<br />
was started by the EEMEA President in 2006. The proud South African<br />
recipients are Joey Visser (Warehouse Manager in Spartan), Preggie Naidoo<br />
(Business Manager in Port Shepstone) and André van Niekerk (Area Sales<br />
Manager in the Western Cape).<br />
“We do not give the awards by chance, but it is a recognition of the new<br />
attitude of the people in Trentyre,” explains Michel. “All employees feel part<br />
of the business, and work at identifying opportunities for profit as much as<br />
driving cost out of the operations. The people are delivering results. I have no<br />
doubt that it is a reflection of the new attitude in the whole organisation.”
42 • Conti Corner<br />
Tonway Tyres consolidates,<br />
following its best trading year yet<br />
We first met Wayne Sauvage and Tony Kalis of Tonway Tyres a few years back when we<br />
visited their highly successful retreading factory in Rosslyn, which to this day, continues to<br />
enjoy a sizeable segment of the market in their respective area. On 2 March 2009, we paid<br />
a visit to their second outlet in Silverton, Pretoria (a ContiPartner store), only to discover<br />
that on that very morning, Wayne and Tony had concluded a deal with new owners, Tinus<br />
Bester and Tobie Crause to relinquish total ownership of this, their second store, in a bid<br />
to focus their full attention on their primary concern.<br />
PROMOTION
Conti Corner • 43<br />
Tobie Crause and Tinus Bester.<br />
Says Wayne: “In these challenging economic times, we’ve chosen to<br />
consolidate our operation by focusing exclusively on our primary shop<br />
in Rosslyn.”<br />
Following a boom year in 2008 which culminated in a record-breaking<br />
turnover and good gross profit margins for Tonway, Wayne and Tony are<br />
hoping to boost their performance further during the course of this year, in<br />
spite of the gloomy economic forecasts.<br />
They’ve chosen to do this by consolidating the operation, capitalising on<br />
internal efficiencies, keeping overheads to a bare minimum and continuing<br />
with their hands-on approach to the business.<br />
Says Wayne: “I’m not just a business owner, I’m also a salesman. My<br />
immediate and most important function (aside from running the business),<br />
is to personally service my customers. That’s what I believe has been the<br />
key to our success.<br />
“Only operators who are lean in their infra-structure and who abide by strict<br />
accounting practices are likely to survive the current economic crisis,” he<br />
adds. “In this business, we see so many retail outlets running on bank<br />
balances as opposed to accurate management accounts,” says Wayne,<br />
something he personally insists on seeing by the 7th of each month.<br />
Plus, the factory produces six days a week, 24 hours a day, while the store is<br />
open Monday to Friday from 07h00-17h00 and Saturdays from 07h00-13h00.<br />
By all indications, their discipline and diligence in this regard coupled with<br />
their willingness to ‘get their hands dirty’, has reaped dividends for this<br />
independent operation which continues to receive high praise from its<br />
most formidable critic – the marketplace.<br />
Adds Tinus Bester: “Tonway Tyres Services Silverton caters to a diversified<br />
market sector. Here, we sell anything from passenger tyres to light<br />
commercial, heavy commercial and OTR tyres.”<br />
And despite the presence of no less than 13 opposition shops in the<br />
immediate area, Tinus further claims that their close association with two<br />
premium brands - Continental and Bandag - as well as their decision to<br />
specialise on the commercial sector, has worked in their favour. Add to<br />
that, their attention to detail and near-exclusive fixation with the smaller<br />
commercial operator who is less likely to incur bad debt and it appears<br />
Tonway Tyres Silverton is equally well poised to weather the storm.<br />
Concludes Wayne: “Our suppliers have played a huge role in the success<br />
of our business. Take Continental for example: Close on 80% of our new<br />
tyre sales are made up of Continental. In fact, Tonway Tyres was built on the<br />
Continental brand. To us, they’re not just our primary tyre suppliers – they<br />
are our business partners.”<br />
Strengthening existing relationships such as these, remaining ever vigilant<br />
and focused on their immediate business and refusing to fall prey to<br />
the current negative energy that is circulating courtesy of the looming<br />
recession, are the all-important elements which Wayne and Tony believe<br />
will carry them forward. We take our hats off to them! In their independent<br />
capacity, they seem to have achieved what many others with considerable<br />
resources cannot.
Have a<br />
question?<br />
Send it to satreads@mweb.co.za<br />
Q<br />
Do I need special tyre changing machines to service run-flat tyres?<br />
A<br />
While most extended mobility tyres appear to be the same as a regular<br />
tyre, the sidewall areas are usually reinforced and much stiffer. Without<br />
the proper equipment to depress the sidewall during the demount and mount<br />
processes, the likelihood of torn beads and damaged rims increases. In order<br />
to properly service most run-flat tyres, the machine must have the hydraulic<br />
arms and/or rollers to keep the bead in the drop center.<br />
Q<br />
Is there still a global shortage of OTR tyres?<br />
A<br />
The only shortage that still remains to some degree is the large<br />
earthmover tyres with 57- and 63-inch rim diameters. Small- and<br />
medium-sized OTR tyres are in good supply, and with the global demand<br />
for new earthmoving equipment continuing to shrink, we expect inventories<br />
to remain at high levels for most OTR tyres.<br />
44 • Ask the tyre experts<br />
Ask the tyre experts<br />
With Marvin Bozarth and Kevin Rohlwing, Tire Industry Association<br />
Q<br />
How many splices are acceptable on a<br />
pre-cure retread?<br />
A<br />
Most retreaders will only allow one splice<br />
per retread, but some companies will allow<br />
two splices with shallow tread depth rubber where<br />
the vehicles do not operate at highway speed or<br />
are fully loaded.<br />
Marvin Bozarth<br />
Q<br />
Can inflation gauges be calibrated?<br />
A<br />
Yes, truck tyre gauges have a small screw on<br />
the bottom of the “stick” that pops out when<br />
Kevin Rohlwing<br />
the air pressure is checked. When the gauge is checked against a master<br />
gauge or at a calibration station, the screw can be tightened or loosened to<br />
read the exact pressure.<br />
Q<br />
How can I improve envelope life in my retread plant?<br />
A<br />
The most important thing you can do is check the sealing rings,<br />
hooks and platforms for any sharp edges or burrs. A small nick or<br />
burr can poke a hole in an envelope or start a small cut that eventually<br />
works it way all the way through rubber. It’s also important to store the<br />
envelopes flat but off the ground on a platform without sharp edges or<br />
protruding nails, which is why we don’t recommend using a wooden pallet.<br />
Another important thing is to let the envelopes cool evenly and make sure<br />
that housekeeping in the plant minimizes the number of staples and other<br />
objects on the floor that may puncture an envelope. Finally, choosing<br />
the correct size and ensuring no foreign material is trapped between the<br />
envelope and the tyre will improve envelope life.<br />
Q<br />
I read that tyres run cooler when inflated with nitrogen. Is that true?<br />
A<br />
None of the tyre manufacturers can produce any data showing that<br />
nitrogen makes a tyre run cooler or last longer. The main factor that<br />
contributes to heat inside a tyre – besides the proper inflation pressure for<br />
the load – is moisture. Moist air retains more heat than dry air, so installing<br />
water separators or air dryers will almost eliminate the moisture and allow<br />
the tyre to run cooler. While nitrogen does bleed out at a slower rate than<br />
regular air (which is already 80% nitrogen), regular inflation pressure<br />
maintenance combined with dry air will yield the same benefits attributed<br />
to nitrogen.<br />
Q<br />
What is the best bead lubricant for truck tyres?<br />
A<br />
We always look for vegetable- or animal-based products that contain<br />
a rust inhibitor with no petrochemical products. Paste lubricants are<br />
typically best for mounting tyres, because they don’t dry as quickly and<br />
typically result in a tyre that is concentrically seated on the rims. One of the<br />
biggest problems we see is technicians who lube the beads with a waterbased<br />
lubricant on a bunch of tyres and then proceed to mount them all<br />
at once. The first few still get the advantages of bead lube, but the last few<br />
are basically dry. Paste lubes don’t evaporate as quickly and also create less<br />
mess in the service area.<br />
To submit a question to be answered in a future edition of Southern<br />
Africa Treads, please send your questions to satreads@mweb.co.za.<br />
Marvin Bozarth is the senior technical consultant for the Tire Industry<br />
Association (TIA) and has more than 40 years of tire and retreading<br />
experience. Kevin Rohlwing is the senior vice president of training for TIA<br />
and has over 26 years of tire experience. TIA offers some of the most<br />
comprehensive tyre service training programs for both commercial<br />
and automotive tyre service professionals in the world. For more<br />
information on these programs, or for more information on TIA, visit<br />
www.tireindustry.org or email training@tireindustry.org.
46 • World news<br />
details actions to<br />
address market, economic challenges<br />
According to Robert J. Keegan, chairman and chief executive officer, of<br />
the Goodyear Tire & Rubber Company, given lower industry demand, the<br />
company is taking aggressive action, reducing tyre production, cutting<br />
costs and adjusting investments to better match market conditions.<br />
Keegan announced actions in three key areas to address the economic<br />
environment in 2009, namely: top line growth via an unprecedented<br />
number of new product launches in 2009 and more than 50 new tyres<br />
being introduced globally; cost reductions by approximately $700 million<br />
which will include reducing personnel levels by nearly 5 000 in addition to<br />
almost 4 000 reductions in the second half of 2008 and freezing salaries;<br />
implementing a number of cash flow actions in 2009 including cutting<br />
capital expenditures to between $700 million and $800 million, reducing<br />
inventory levels by more than $500 million and pursuing the sale of noncore<br />
assets.<br />
“Collectively, these actions address the new economic realities,” says<br />
Keegan. “We will remain flexible and are prepared to take additional actions<br />
if market conditions warrant. Our goal is to ensure Goodyear is positioned<br />
for success when tyre markets recover.”<br />
(www.goodyear.com)<br />
Brembo, Marelli and Pirelli launch<br />
technology collaboration<br />
cuts back in<br />
light of economic environment<br />
November 2008 saw a sharper month-on-month decline in demand<br />
for tyres in all European, North American, Asian and South American<br />
markets.<br />
In response to this situation, Michelin has cut back significantly on<br />
operations in most of its plant worldwide.<br />
This decision, stemming from the current economic environment, will lead<br />
to exceptional costs due to under-utilisation of capacity, which will amount<br />
to nearly 150 million euros in the fourth-quarter accounts.<br />
As such, Michelin is taking the necessary steps to effectively manage<br />
inventories and maintain its flexibility moving into 2009.<br />
(www.michelin.com)<br />
No deal for Pirelli and Continental<br />
In response to comments on possible Pirelli transactions on Continental,<br />
the company declared that no transaction has been defined even along<br />
general outlines.<br />
The company also points out that consistent with the financial rigor<br />
foreseen by the guidelines of the recent 2009-2011 industrial plan, any<br />
possible future transaction of a strategic nature would not comport any<br />
recourse to the market.<br />
(www.pirelli.com)<br />
Brembo, Magneti Marelli and Pirelli have announced the start of<br />
cooperation in technology with the aim of developing leading edge<br />
solutions for the Italian and international automotive industry.<br />
The Cyber Tyre, the intelligent tyre developed by Pirelli, will be integrated<br />
with Magneti Marelli electronic control systems and with Brembo’s evolved<br />
braking systems in order to realise ad hoc technology solutions, at the<br />
service of performance and safety requirements of all types of customers.<br />
The internationally recognised skills and excellence of the three Italian<br />
groups will allow for important synergies and for development of<br />
applications, in particular, in the field of safety systems for automobiles and<br />
reducing environmental impact in line with the evolution of international<br />
regulations and new European Union CO2 emission limits that come into<br />
effect in 2012.<br />
(www.pirelli.com)
48 • Competition / Subscription<br />
CONGRATULATIONS TO OUR PREVIOUS COMPETITION WINNER!<br />
Charles Scharneck of Vector Logistics, East London<br />
whose correct answer wins him a copy of the coveted 2009 Pirelli Calendar<br />
Click onto<br />
www.satreads.co.za<br />
to enter!<br />
quarterly competition<br />
QUESTION: Who distributes the INFINITY<br />
range of tyres in South Afirca?<br />
ANSWER:____________________________________________________________________________________<br />
Name:_________________________________________________________________________________________<br />
Company:___________________________________________________________________________________<br />
Address:_____________________________________________________________________________________<br />
__________________________________________________________________________________________________<br />
_________________________________________________ Code:________________________________________<br />
Telephone:_________________________________ Cellphone:_________________________________ _<br />
Please address your competition entries and subscriptions to:<br />
Sky Publications cc, PO Box 702, Douglasdale, 2165,<br />
or Fax entries to: (011) 658 0010<br />
or enter online at www.satreads.co.za<br />
Enter & win...<br />
a 2009 a set Pirelli of<br />
Calendar courtesy of<br />
INFINITY<br />
Pirelli Tyres <strong>SA</strong><br />
performance tyres<br />
to the value of<br />
R3 500!<br />
subscription<br />
I/we wish to subscribe to <strong>SA</strong> Treads<br />
One year’s subscription (incl. VAT and postage)<br />
Local (<strong>SA</strong>) R 96-00<br />
International R 220-00<br />
(Please address cheques to Sky Publications)<br />
Name:____________________________________________________________________________________ Company:_____________________________________________________________________________<br />
Address:____________________________________________________________________________________________________________________________________________________________________________<br />
_________________________________________________________________________________________________________________________________________________________________________________________<br />
_____________________________________________________________________________________________ Code:___________________________________________________________________________________<br />
Profession:_ ____________________________________________________________________________ Telephone:____________________________________________________________________________<br />
For more information on previous editions and advertising rates, check out our website:<br />
www.satreads.co.za
With the reliability you get from Bandag, your fleet can take on anything.<br />
For more information contact Bandag - Tel: +27 11 439 6000 Fax: +27 11 506 8717 www.bandag.co.za
pirelli.com<br />
P Zero the Hero: unique in technology and perfomance.<br />
It offers sporty driving with high quality comfort levels and greater durability.<br />
No need to warm up the tyre, the new P Zero gives immediate grip from cold.<br />
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