Plastics & Rubber World - November/December 2019 - 51

interview

links in with trying to improve sustainability and reduce any environmental impact. So we should minimise unnecessary
transport.
A tyre is not a great product to be
shipped, you're moving around a lot of air.
The quantity of material being moved in
comparison to other products is significantly less.
The European car market is a little
soft, has that impacted business?
You say 'soft', that's a kind description!
We're forecasting that the European car
market will be down 5% over 2019. Being
a major OE supplier, with Continental supplying maybe one third of all new car producers [in the region], that affects us. Yes,
it's concerning for the business.
As I said, we're in a capital-intensive
business. That means you have to have
high capacity utilisation. If something hits
your utilisation targets, that's immediately
a problem. You have to use your assets
and if you don't, that will hit your bottom
line.
The replacement side is a very diverse
picture. In Europe, for the first time in
many years, we have a slightly reduced
market over last year. Normally, when OE
volumes are down, replacement volumes
go up as people keep their cars. But now
OE is significantly down and replacement
also slightly down.
Do you think that's due to people
being more environmentally
conscious, driving fewer miles?
I don't think there's any indicator which
suggests that's already a reality. We think
that is a future trend. All the statistics I'm
aware of say that miles driven are not going down.
I think issues with replacement are
more an issue of margins deteriorating
between wholesale and retail. There's
some considerable consolidation occurring and that creates financial stress.
The total distribution chain is not keen
on holding stock, they're cash conscious.
We run our own business and looking
at how many tyres are sold to the end
consumer. Based on that we believe the
market is actually running positive. So it's

more of a temporary imbalance between
wholesale and retail.
Are you concerned with online
retailers, their discounting?
It has been a major discussion point for
many years, but it's difficult to differentiate
what is online and what is offline. So we
talk about on/offline synchronisation. As
online retailers invest in offline to deliver
a full service, I believe it's more of a single market. But it has created more price
transparency, which is good for the end
consumer.
Are raw material prices affecting
business?
This year we experienced some headwind
with raw material costs. With OE declines
and replacement market trends I think it
will lead to a reducing of raw material prices - at least that's what we believe. But the
peak [material prices] of the last few years
have evened out, we're in a relatively stable environment.

Continental launched the CARE
auto-inflation system at the recent
Frankfurt motor show

Raw materials are still made up of a
significant portion of natural material?
Well, synthetics are already playing a
much bigger role in the truck tyre market. But there is no material yet, and we
don't see it changing at any point in the
near future, where there will be a synthetic material to completely replace natural
rubber. The material has properties which
are impossible to copy.
So we're working on natural rubber
sources. We have the first series of tyres
out now for two-wheelers using taraxagum material [TKS, from dandelion
plants], which has replaced traditional
sources.
We're also recycling natural rubber, developing technologies to support sustainable reuse of natural rubber. That's more
of a focus over simply trying to replace
natural rubber with synthetic materials.
How is that managed, do you have
specialist partners which collect and
deliver the reclaimed material?
There are different legal requirements,
globally. In Germany, there is a free market. Tyres are collected from dealerships

›› Continued on page 52

All manufacturers will achieve
optimum tread patterns, so
material recipe is a key
differentiator

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