While the major players are still doing well, Xu said their investments are being “allocated more in Asia, America and Russia, and in east Europe sometimes, very little in west Europe. This includes some Asian companies such as Nexen [and] Apollo.”
“The major players will continue dominating the market by leading in technology. We expect some big changes in tire production technology,” Xu further commented.
Mesnac also expects that the tire market in Europe will continue to see slow growth, with investments continuing to be moved to regions, such as eastern Europe, Russia and Turkey.
Xu went on to note that “there are more and more tires imports from China, making it possible [that there will be] new technical regulation or even anti-dumping policy from EU authorities.”
In his assessment, Gerry Pol, sales director Europe at VMI reported “satisfactory activity” as the automotive market continues to recover in most major European countries. He added, however, that the picture is uneven, with greenfield developments in some east European markets, while elsewhere the focus is on upgrading existing facilities.
“VMI has secured significant new sales [with] customers from outside Europe moving in; from clients expanding in lower cost European countries and [with] clients upgrading their plants to include greater automation,” the European sales director added.
Looking forward, Pol said the industry is being shaped, in part, by a need for smaller batch sizes and a drive for higher productivity to deliver the lowest price per tire. These trends are, in turn, leading to “growth in the use of automation technology to improve agility and quality by cutting down on human intervention.”
While cautious about the general state of the European economy, the VMI executive noted: “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.”
Pol concurs that the use of labelling has affected the market considerably and “we expect increasingly strict application of regulations to have an even greater impact.
“If extra parameters, such as tire wear, are introduced this will influence consumer choice and may help higher value manufacturers.”