European tyre market: One rule for all
By Sharad Matade:
The tenure of the new president of the European Tyre and Rubber Manufacturers’ Association (ETRMA), Franco Annunziato, probably will witness considerable changes in the global tyre industry, seeing the trends in auto sector, regulations and changing consumers’ behavior. In an interview with Tyre Asia, Annunziato, who is Bridgestone’s EMEA’s Vice President, said: “Today’s automotive industry is at a turning point: it must embrace the upcoming digital revolution, automated and connected driving, environmental challenges (such as climate goals), societal changes and growing globalisation. Tyre producers are looking at this as a way to foster innovation and growth.”
Major Asian tyre manufacturers are shifting their focus to the European market, a highly regulated and quality driven market. How will this change the dynamics of the European tyre market? Will we see the competition on prices in Europe?
European Union is a free market economy and the European tyre industry has promoted historically free trade – which means that all economic factors in the market are playing by the same rules, supported by effective enforcement actions on the market.
The evolution of the social, political, technological and economic environment has prompted an equivalent change in both end users and vehicle industry expectations with a subsequent expansion of the market segmentation.
The tyre industry in Europe invests millions of Euros in innovation every year and results are visible in terms of performances for all products presently available on the market. Performances/price ratio reflects the wide offer of products to mirror such segmentation, while all of them must fulfil the minimum requirements that are required to grant a safe driving.
The tyre performance regulatory labelling being introduced in Europe helps the users to choose the best products for them referring to and trusting the rules behind this system.
It goes without saying that the European tyre producers do not fear low cost imports as long as all the actors on the market play and demonstrate playing by the same rules. Surveillance campaigns run in the recent past have demonstrated that this is not always the case.
Therefore, we do believe that a Legislation, without an effective enforcement and deterring measures, is damaging for all the stakeholders (consumers, industry, community ) a will enhance our efforts to off-set such risk.
Availability of natural rubber is a growing concern and now it has been included in the critical raw material list? How will the inclusion of the NR in the critical raw material list help the industry?
Natural rubber will continue to be a strategic raw material for the tyre industry and as such it demands an accurate long-term supply strategy that involves the entire eco-system.
The listing of Natural Rubber as critical raw material will surely contribute to raise the political attention to the development of a sustainable NR overall supply scheme with the target to achieve a “ multi win-win” scenarios for the benefit of the environment, the NR producers and the tyre manufacturing industry.
There is a growing emphasis on e-mobility in Europe. Many car makers have already announced their plans of complete ban on diesel vehicles. How will this change the European tyre industry, on technology and marketing fronts?
Today’s automotive industry is at a turning point: it must embrace the upcoming digital revolution, automated and connected driving, environmental challenges (such as climate goals), societal changes and growing globalisation.
Tyre producers are looking at this as a way to foster innovation and growth, while contributing to the enhancement of the social impacts of people mobility, including technologies for a safer and greener journey and the development of products and services more tailored on the consumers’ needs.
The tyre is and will continue to be the single contact point between the road and the vehicle, as such crucial to ensuring a safe driving and needed mobility.
The vehicle drivers or owners are responsible for having and maintain the proper and compliant tyre equipment on their vehicles. They are also solely responsible to adapt their driving modes to environment and tyre state. With an ever increasing connectivity and automaticity of Vehicles, these responsibilities will be progressively transferred to the vehicle and its components.
For these reasons, tyre data will be crucial to ensure a safe drive, low emission mobility and improved service to the customer. Information required to provide adequate service to the vehicle user regarding proper tyre equipment shall be based on customer choice, in agreement with data privacy law and shall be made on a non-discriminatory basis, and shall not be restricted by the vehicle manufacturer through B2B agreements.
Restriction to component interchangeability should be based only on a clear set of rules and considerations, like safety. As an example, the data exchange protocols between the intelligent tyre and the vehicle should not limit the interchangeability of tyres.
Europe can really play a leadership role, and represent a benchmark for other markets, in connectivity technology and mobility offers, by guaranteeing a fair market access and clear rules for those actors involved in the data value chain. ETRMA, with the support of its industry members, is engaged with the European regulator to shaping the proper regulatory and competitive landscape.
How do you evaluate the European tyre industry in 2017? Your prediction for 2018…
The European tyre industry has been continuously confronted with increasing challenges in 2017 and it was again a year of big efforts and substantially positive results, within an economy trend continuing towards a full recovery. The 2018 will reasonably continue in the same trend, where the technological and market challenges will be even more stretched and where the regulatory framework and factual enforcement will have again a major role in shaping and supporting a healthy market.
What will the challenges for 2018 for the tyre companies in Europe and being the head of ETRMA what will be major issues on your agenda?
There is a growing demand for high technology tyres worldwide specifically focusing on making mobility safer and sustainable. Manufacturers operating in mature markets must focus on innovation and technology to develop premium products that meet or exceed customers’ expectations by bringing added value in order to differentiate themselves from low cost products. Such kind of challenge very much applies to the European tyre manufacturers that, I am sure, will continue to focus and invest in technology and innovation in order to be able to provide technologically leading products promoted by various legislative activities worldwide – and not only in Europe – specifically focusing on safety and sustainability. In this environment as new President of ETRMA it will be my priority to continue the great work done by ETRMA to address future challenges and to seize new opportunities to ensure the sustainability of the industry as well as to keep the organization engaged with the activities towards building science and strong facts before new initiatives are put forward.