Goodyear’s Kramer: ‘The world still moves on rubber’
Goodyear Tire & Rubber Co. Chairman and CEO Richard Kramer discussed the factors shaping the global tire industry in the near future in a keynote speech that opened the 2015 World Rubber Summit in Singapore on March 24.
Kramer told attendees he is optimistic about the future of the global tire industry and its role in people’s lives and commerce around the world. “Many of the high-profile tech companies that got the headlines have come and gone, but the world still moves on rubber. Our industry is still here and I’m confident we’ll be here for the long term.”
In his address, Kramer discussed Goodyear’s strategic response to trends in the global tire industry. Highlights of his speech follow:
“We believe our strategy is creating competitive advantage for Goodyear and providing opportunities for everyone along the rubber and tire supply chain,” he said. At the same time, he reminded attendees that “Value for all of us is ultimately created in the marketplace, by consumers and end-users of our products. We can never forget that.”
The growth of the middle class, especially in developing markets, will be a key driver for industry growth, according to Kramer. “The continuing emergence of the middle class around the world and the love of mobility ingrained in the human spirit will lead to increased vehicle sales in emerging markets. That translates to tire volume growth for decades to come.”
Kramer also sees growth opportunities in mature markets. “In mature markets such as North America and Western Europe, the growth is being driven by the changing mix to high-value-added tires with increasing technology. Profitable segments – such as winter tires, SUV tires and light truck tires – offer higher margins as informed consumers are willing to pay for high-value-added tires.”
Tire companies, however, will need to change to capture this growth. Kramer discussed how the newest generation of consumers, the Millennials, is changing the retail landscape for the industry.
“They have the leverage, and are buying what they want, when they want, and how they want,” he said. “Millennial consumers are not going to adapt to us and the way we’ve sold tires for the past 100 years. We have to become a fast moving, consumer-driven, technology savvy industry. We have to do more than sell tires. We have to sell a convenient and frictionless experience with our product and make the tire buying process easier.”
Kramer said while the industry should celebrate its century-old heritage it should not be bound by it. “The world continues to move forward, as it always has. The new challenges and new opportunities that come with new technologies and new consumers demand that we keep our eyes on the future.”
Goodyear recently announced plans to meet consumers’ demand to buy tires online. To read dealers’ reaction to the plan, and to share your own, see: