As I am sure all MTD readers can appreciate, Europe is currently in the grip of a number of significant business trading changes including a fluctuating economy and the very real prospect of the UK market eventually leaving the European Union.
Obviously in such an unpredictable playing field, the tire industry throughout Europe has to be affected. But the question is: Just how much is this uncertainty interfering with tire sales performance? To find out, I recently accepted an invitation to meet with Jake Rønsholt, managing director of Bridgestone Europe’s Consumer Business Unit (BSEU), in Zaventem, just outside Brussels, Belgium.
I arrived for an intensive and very open discussion with Rønsholt, armed with a number of specific searching questions which would help us understand how one of the major tire manufacturers in Europe views the current market situation and the company’s plans for the future.
First of all, I asked Rønsholt to give me a brief account of how Bridgestone Europe had performed in terms of sales in 2016 and if the company had considered it to be a positive period.
He pointed out that in total the European tire market had grown by 2% (despite some turmoil) and the OEM market had also increased by 3%. Jake added, “So overall it was a positive growth trend for the future, and at BSEU we shared in this success and also gained some market share.
“Our aim, as usual, was to produce packages that satisfy the end consumer and several projects we had been working on since 2015 were successfully accomplished.”
So what would you consider to have been your top performing tire sales range last year?
Rønsholt said, “Without a doubt the launch of our revolutionary new run-flat tire DriveGuard, which basically can be fitted to almost any vehicle with a tire pressure monitoring system (TPMS) and is not ‘vehicle specific’ as they used to be. This product, which we regard as offering a new level of safety, is an important first in the market and by the end of 2017 we confidently expect one million DriveGuard tires to be on the road throughout Europe. DriveGuard can go 50 miles at speeds up to 50 miles an hour to travel somewhere to get a damaged tire changed. They also handle much better than conventional run-flats and have been a tremendous success for Bridgestone with slightly different concepts being available in Europe and North America.”Rønsholt also pointed out that there had been several other significant successes including the popularity of the Dueler range plus the new “multi-season” range from Firestone. He added, “We also launched the new tire in the popular Firestone Roadhawk range which has significantly increased in overall standard but remained at the same competitive price level.”
You have mentioned Firestone, which as we know made an extensive comeback in Europe last year. So what are your plans for the brand this year, not just in Europe but on a global basis and in particular in the U.S.?
“Although viewed as our second brand in the group, I want to make it quite clear that Firestone is an extremely important part of Bridgestone’s product portfolio and we will continue to heavily promote the range in the coming year. With sales of the brand increasing, Firestone will now become an essential part of our presentation at tire and automotive shows around Europe.
“On a worldwide basis, which includes North America, we will be looking to incorporate a very competitive marketing package. In Europe this will be centered around our dynamic and entertaining ‘Firestone Music Tour.’ The brand is also building a strong presence in social media. This supports our belief that this new communication channel is beginning to have an impact on Bridgestone tire sales.”
What technological advances has BSEU made in the past 12 months on tire building and design development?
“Well, obviously, DriveGuard can be considered one of our greatest advancements in what is a constant project that we are always exploring for improvement in safety and performance — particularly in compound mixing and every aspect of the tire building process. Is there a revolution growing with regards to tire-building? No, not yet, but as they say ‘watch this space’ as our Global Research and Development teams are constantly working on new directions and ideas. So who knows what will emerge in the future?
“For RFT (run-flat technology), we believe we are at least on par or possibly ahead in this market and I would say that our objective is to always continue to increase our knowledge of the tire industry and react to emerging requirements and expectations.”
What percentage of consumer tire sales is currently generated online and how big do you think this buying avenue will become in the future and over what time line?
“Our online activity keeps growing and online is a welcome source of information for future sales with the help and enthusiasm of our tire dealer network in Europe. It is good that drivers can pre-inform themselves about what tires are available before going to a dealer. After all, it has been stated that up to 80% of potential customers will look online before buying tires. Of course e-commerce is yet another important issue. This is centered around being able to actually shop online which in Europe in some markets is currently running at up to 15% of tire business and the prediction is that this could possibly reach as much as 25% in the early 2020s.”In your opinion, what role will tires play in the future concerning the growing emergence of hybrid, electric and other alternative energy sourced vehicles? Also, do you feel there will be a need to eventually make a change in the overall design of tires for autonomous vehicles?
“Most definitely there will eventually be a need to adjust tire design in order to accommodate autonomous vehicles, and at the moment it is interesting to see where this new concept will go. The biggest challenge on autonomy is the range — just how far can they go? Fuel- and hybrid-driven cars have to be topped-up, but with self-drive cars it is an unknown direction when it comes to distance and performance.
“The one issue that immediately comes to mind is rolling resistance as tires generate friction for safety and to remain on the road so the higher the friction the less the range will be. In my opinion, it feels as though the car industry is expecting us (the tire industry) to significantly contribute toward designing tires that will be safe and also reach the highest level of autonomy possible. So without doubt future tire design will be extremely important and Bridgestone fully intends to be at the forefront of any innovative development.”
Can you explain just how important tire shows in Europe, such as the Reifen Show (Germany), Autopromotec (Italy) and the Geneva Motor Show (Switzerland), are to Bridgestone’s marketing and sales strategy?
Rønsholt stated, “They are extremely important and we are (and will continue to be) a regular exhibitor at all these shows and other relevant events as they are still one of the most crucial ways of professionally presenting our products and services throughout Europe. They also allow us to meet up with our customers and listen to their opinions and needs for the future.”
Does Bridgestone Europe have any company-owned tire sales outlets (chains) in Europe?
“Yes, we do, and our First Stop business has been firmly established throughout Europe for a number of years now. At the same time, our two most recent acquisitions were in France. However, it is not just about ownership as we also concentrate on continually building solid business partnerships such as our current joint retail venture in Germany.”
Does Bridgestone Europe work in close harmony with its team in North America?
Rønsholt said, “Absolutely, and we pride ourselves in having a successful working partnership with our American headquarters and, in fact, the degree of direct collaboration has increased significantly during the past few years. Ideally Bridgestone wants to be known as a truly global corporation and although we are not yet present in all countries, we work together with partners to provide a high level of tire service in every country and continent.
“We also have established Global Brand Committees that work together to determine the way forward together as we fully appreciate that in different parts of the world there are different people and capabilities, so we run a series of projects concentrating on individual schemes and initiatives.”
With Bridgestone having a strong brand reputation in the UK, what is your opinion on Brexit and so far has there been any significant rise or fall in tire sales in the UK?
“At the moment nobody really knows what is going to happen, but so far we have not experienced any significant change. Obviously the monetary exchange rate is very important for our pricing, but overall it remains business as usual. Who knows what will happen if the UK does leave Europe, but I feel that it will work out OK. It is another market and we have a great team in the UK, so I am confident Bridgestone will not be affected.”
Finally, can you give an overview of your sales and marketing strategy for 2017?
“Quite simply we are now concentrating very hard in our role as a Worldwide Olympic Partner which obviously is our main marketing objective at the moment. In the past we may have had many ‘scattered initiatives,’ but now are focused on just two — the Olympic Partnership and the Firestone Music Tour.”
Quite a few searching questions that were met with honest, informative answers, and when it comes to Europe, Bridgestone certainly appears to have its “finger on the pulse.” ■
John Stone has been working within the global tire industry for the past 26 years. In 2004 he launched his own consulting company, Sapphire Media Services, which caters to business media clients around the globe. Stone also writes for tire and automotive-related publications in Europe, South Africa and Asia.
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