Uniqueness drives growth
As winter creeps across Europe with early snowfall in parts of the northern region, weathermen are predicting that the continent is set to witness the severest cold of this century. This will certainly come as a whiff of good cheer to Kim Gran, the 59-year old President and CEO of Nokian Tyres.
Since 2000, he is heading the company that has become under his visionary leadership the undisputed leader in winter tyres. Powered by cutting-edge technology, Nokian is producing a range of tyres that have outsmarted its competition because of the reliability, strength and safety of its range of over 40 products with rim sizes from 13 inches to 22 inches.
Take the case of Nokian’s WR sUv 3, its new range of tough and rugged high-performance winter tyre. its claws through heavy snow with a grip that will assure the sUv driver total safety with excellent grip, smooth handling, better manoeuvrability and good driving response. The tyre eliminates slush planning and aquaplaning as it rolls effortlessly Nokian winter and summer tyres represent the continuing flowering of intense research that the company’s tyre engineers regularly deliver. Their chartbusters of award-winning tyres have been voted by German automobile club ADAC and various consumer and auto magazines as the best. This achievement reflects the vision of Gran to lead the company to produce more such world beating tyres.
The accolades for Nokian products prove that these tyres are on top in all departments of motoring from shortest braking distance to fuel-efficiency. When Nokian won various kudos for its products, including 17 very good and good test results in the 2013 summer tyre tests in Germany, Austria, and Switzerland, the company was living up to the CEO’s vision.
Says Gran in an interview to Polymers & Tyre Asia: “in our vision we continue to understand the needs and expectations of our customers in challenging driving conditions, especially winter. We understand the market requirement better than anybody else.”
It is this in-depth understanding of the customers’ requirements that have helped Nokian edge out competition from key markets where it is present. “We operate in growing markets and focus on tyre products and services that offer sustainable added value to our customers,” he said in the interview.
Gran’s objective is not only to take care of the interest of Nokian customers and grow the mark share but also
assure shareholders good returns on their investment. “We will continue our profitable growth and aim to be the most
profitable tyre manufacturer also in the future.” It’s this grand ambition that is driving the CEO to scale greater heights as the company’s growth clearly shows.
In spite of slowing down of the economies of the continent, Nokian has ensured that the company’s growth remains consistently good. Gran says that its business strategy has helped it remain the undisputable leader in its core markets in Russia and Nordic countries where it consistently manages to increase the market share.
Today, he is expecting this good growth performance to continue, particularly on the back of Nokian’s new winter tyres spearheaded by the innovative Hakkapeliitta 8 launched in the second half of this year.
Hakkapeliitta 8, which is a studded premium tyre that offers extreme winter safety and low road wear, has extraordinary winter grip that is seen never before. Its groundbreaking Nokian Eco stud 8 concept comes with a new-generation anchor stud, a flange design that reduces stud impact. its cushion has improved the operation of the stud and has further softened the road contact.
The result of the revolutionary design is that the road wear effect is on an average 12 per cent lower than the limit defined in the Nordic stud legislation. This technology contributes to longer lifetime, lower heat generation and reduced rolling resistance thereby boosting the tyre’s fuel economy.
These features make Nokian stand out in the crowded competitive market. Explaining his market strategy, Gran says that the company markets its products mainly in areas with northern conditions where there are snow, forests and demanding driving conditions caused by changing seasons.
“We utilise our special competence in narrow product segments like passenger car winter tyres, truck winter tyres and forestry tyres,” he explained. “We make our sales in replacement markets through speciality tyre outlets, car dealers and other companies engaged with direct end users and the tyre trade.”
Gran also explained that the Nokian’s philosophy is to put emphasis on efficient distribution. “We want the users of our products and services to be the most satisfied customers in the world. Therefore, we are building controlled distribution networks in our main markets, spearheaded by vianor, a growing vehicle and tyre service chain comprising over 1,100 tyre stores across 26 countries.
Commenting on the uncertainties facing natural rubber supplies, he said that the Nokian strategy is to build long-term relationships with suppliers. “We believe in long-term relationships with the natural rubber suppliers. We do not see a major risk of a big turbulence during the next few years.” While the company has tied up uninterrupted supply chains, Gran is also closely observing various market trends that could impact the company.
He is keenly looking at major consumer perceptions that will have a defining impact on the tyre industry. “We see that in our core markets, safety remains the main driver for consumer tyre purchases. Easy processes for purchasing and mounting as well as environmental issues are also important factors for consumers,” he explains.
Although tyre-labelling, which has become mandatory in Europe, has resulted in a level playing-field, But that has not deterred Nokian from building on its reputation as a quality brand of immense value. “We have been building our brand for about 80 years now, and we have seen the power of a strong brand when talking about pricing power in the market,” Gran points out.
The Nokian brand is the cornerstone in his business model and as a house-brand in Nokian’s core markets. it’s a guarantee for its high quality that is accepted by the consumers.” A powerful brand has a strong place in consumers’ hearts, measured by key performance indicators (KPis) like top of the mind, loyalty, appreciation and recommendation,” he asserts.
“To become a strong brand, you need to have something unique to offer to customers and to execute your vision and plants with a healthy will to win!” says Gran as he drives the stupendous market growth of Nokian tyres with his visionary zeal.