ERJ quizzed Gerry Pol, VMI sales director, Tire Europe on the current state of the EU tire sector, for an article in the Sept/Oct issue of ERJ
Viewpoint: VMI director on European tire market
GP: Satisfactory activity as the automotive market continues to recover in most major European countries. The picture is uneven, however, with Greenfield developments in some East European markets, while elsewhere the focus is on upgrading existing facilities. VMI has secured significant new sales, for customers from outside Europe moving in; from clients expanding in lower cost European countries and for clients upgrading their plants to include greater automation.
ERJ: How do you expect the European tire market to develop over the next 24 months?
GP: The industry is being shaped by major trends that include the need for smaller batch sizes; drive for higher productivity to deliver the lowest price per tire; consequent growth in use of automation technology to improve agility and quality by cutting down on human intervention. These trends will probably accelerate, and this will keep demand for MAXX automation technology strong.
ERJ: What do you see as the main barriers to growth in the market?
GP: The most important factor is the health of the European economy, which remains fragile in most countries. Growth rates predicted are weak and can be slowed by any of the major forces now causing anxiety (China slowdown, Eurozone governance, sovereign and private debt…). The demand for automation means that the tire market may grow faster than the total economy but this is no time to be complacent.
ERJ: What are the main factors driving growth in the European tire market?
GP: The tire market is closely linked to growth in the main automotive market. Here the news is promising. Over the past year most major markets have posted good growth, in some cases extremely good, and there seems reason to believe that growth will continue. In addition, new regulations and a move to the need for different types of tire on high-end cars is also driving demand.
ERJ: Any other comments on the current business, regulatory or technology trends in the European tire sector?
We also see growing demand for both low weight and run flat tires, leading to higher levels of complexity in manufacturing processes and consequent demand for the most advanced equipment.
We see the probability of continued demand to upgrade existing equipment to handle these new requirements, while the trend to return at least some manufacturing to Europe from low cost countries will drive further demand for automation technology. This leaves us feeling optimistic about the future for our own line of business.
ERJ: Thank you