A NEW APPROACH TO BRAVING THE CRISIS
AN INTERVIEW WITH ANDY DAVIES, MANAGING DIRECTOR BRIDGESTONE EUROPE SOUTH REGION
Reorganization within Bridgestone to cope with the challenges of the future and a difficult economic situation. We talked about it with Andy Davies, the new managing director of Bridgestone Europe South Region
SIXTEEN YEARS with Bridgestone, vast international experience with important roles in the United Kingdom, Belgium and Austria. What are the characteristics of the main European and Italian markets?
In the course of my career I have had the opportunity to work in different countries, each one with its own characteristics: from Britain which, for example, does not have a winter tyre sector, to Austria, which is devoted purely to winter products. As far as Italy is concerned, less severe winters and the regulatory environment have delayed the development of the winter tyre market. So I think that this segment has good opportunities for development by adapting the strategies used in other markets.
The development of the seasonal changeover concept is also an opportunity to increase customer loyalty by offering a range of services that go well beyond simply buying tyres. With the winter changeover, relationships with the outlet are more regular, with visits at least twice a year instead of once every three years. Tyre retailers therefore have more opportunities for maintenance in addition to being purchase or repair points. In a sector in which margins are being constantly reduced, this diversification is a good opportunity for increasing revenues, provided that employees are adequately trained.
However, there is no doubt that the entire sector is being forced into reorganization because of the current economic scenario. In Italy, the current state of the economy is a more important challenge than in other European countries.
How is the European market reacting to the crisis? Can you give us some figures about the trend in the vehicle segment and what the year has in store?
Market figures clearly indicate that this is a difficult time for the economy and for the entire automobile industry. Anfia data have also shown that compared with last year the demand for cars has dropped by 15% in Europe and by 28% in Italy. The same applies to the number of registrations, which fell by 11.2% in the last 12 months in the European Union, and by 37.7% in Italy.
It is obvious that the economic crisis is having a strong influence on consumer readiness to buy and the car sector is being particularly affected. In times of uncertainty, families are not prepared to think about changing their car unless they are forced to do so. For the same reason, they tend to delay replacing worn tyres, even though this is a key factor in driving safety. What I have noticed is that there is no longer only one reaction to the crisis, but a continual series of initiatives for improvement that allow the country, industries and firms to successfully cope with the future by adapting and becoming stronger. This is why I believe that we can expect a gradual improvement in the second half of the year, and Bridgestone’s decision to adopt at regional level a new structure and organization by lines of products was taken precisely to enable to company to best cope with the challenges of the coming years.
There has been a boom in winter tyres in Italy in recent years. Do you believe there is still room for increasing market share? And in Europe?
Italy is one of the least developed markets with regard to winter tyres. If we look at the percentages, we have 65% for summer tyres and 35% for winter, but in other European markets the latter can be as high as 70%. Over the past 5 years, the market has grown thanks to greater awareness about safety, the need for goods vehicles that are capable of travelling in all weather conditions, and the introduction of local regulations that enforce the use of winter tyres or snow chains.
The winter tyre segment is strategic for Bridgestone. The Italian winter tyre market certainly has room for growth and we are excellently positioned because of the technologically-advanced range of Blizzak tyres that meet all drivers’ needs. So we are committed to fully supporting retailers during the sell out stage so that drivers will choose Bridgestone, not only because of the quality of its products but also because it offers tangible advantages.
What are the company’s short-term strategies for the Italian market?
In Italy we can count on three fundamental assets: the factory at Bari where we make over 20,000 tyres a day, the research and development centre near Rome, and a highly motivated new team.
In line with the values shared by the company, we will continue our work without losing sight of our most important role as tyre manufacturers, namely our continued focus on safety and the environment. With regard to safety, Run-Flat Tyres (RFT) are the maximum expression: thanks to the special casing construction, even when punctured they can continue to be driven for another 80 km, thereby allowing you to reach the nearest lay-by.
Last but not least, we believe that working in close contact with car manufacturers is the key to developing new tyres as well as being essential in terms of safety, because car manufacturers have very strict homologation procedures.
Bridgestone is putting a lot of leverage on eco-friendly products and is also investing in new concepts like airless tyres. Can you tell us more?
Bridgestone’s mission is to “serve society with superior quality”. In fact we aim at offering the market the best products and guarantee the highest level of safety and environmental protection. Consequently, we created a specific line of “green” tyres with the Ecopia label. The latest product in the range is called Ecopia Ep150 and represents the right safety-environment balance by offering reduced rolling resistance, and therefore lower carbon dioxide emissions, together with a high level of safety on the wet, greater resistance to wear and a comfortable drive. For Ecopia products leading-edge NanoProtech technology is applied to the compound, which improves the distribution of the silica particles and reduces energy loss and rolling resistance. This new technology developed by Bridgestone is applied to new products.
As far as latest developments are concerned, Bridgestone recently presented a prototype of a new airless tyre which could be a valid and ecological alternative to conventional tyres in the future. Thanks to its unique spoke structure the tyre doesn’t require air, which means less tyre maintenance and no more punctures. What’s more, the tyres are made from thermoplastic resin and 100% recyclable rubber. These tyres represent a new standard in terms of eco-sustainability, safety and comfort and, even though they cannot yet be mass produced, Bridgestone is strongly committed to developing them in the same way that it is committed to setting up a process that will maximize the recycling of resources by using worn tyres to make new ones and by using recyclable materials.
Tyre labelling is soon to come into force (November 2012), what do you think about this important legislative development and the changes it might make to the market?
First and foremost, we believe that tyre labelling is an excellent idea because it allows consumers to make a more informed choice by comparing tyre performance and price. This will certainly convince manufacturers to invest more in research and development in order to improve the parameters shown on the label and gain a competitive advantage. Given that the regulation is the same for all products sold in Europe, I don’t think that the number of players on the market will be changed by this development.
Having said that, Bridgestone aims to provide consumers with even more detailed information that will help them decide. The information given on the tyre label is important, but it doesn’t give a complete view of performance. In fact it is important to understand, for example, that fuel consumption and performance on the wet depend considerably on maintaining correct tyre pressures and on the style of driving.
Moving on to trucks, in Italy there has been a considerable downturn in the segment. Road transport is having serious problems, what is your company’s view and what is it doing to support the needs of road transport?
Bridgestone works for a sustainable society and considers the environment, health and safety to be an integral and fundamental part of its business. This is why we always seek innovative solutions that will help our customers.
In recent years the fleet sector has been paying particular attention to cutting costs. So we decided to focus on the overall costs of ownership.
As far as the truck segment is concerned, Bridgestone supplies it with tyres with low rolling resistance for steering and drive axles and for trailers and we have developed the so-called Total Tyre Life Concept. The ingenious combination of durable casings and superior quality new tyres ensures the overall life of the tyre with less cost per kilometre. After thousands of kilometres, the casing only requires retreading with the Bandag process, the most reliable on today’s market, which will prolong the life of the tyre. In this way we help fleets to lower overall tyre maintenance costs.
And to offer fleets the best service, Bridgestone has also developed a network of specialized retailers called “Truck Points”, of which there are 115 in Italy and over 2,000 in Europe.
What role does the tyre specialist play, or should play, in the company’s policies?
The tyre retailer plays a role of primary importance in Bridgestone’s strategies. In Italy we do not have direct control of the channel so it is up to our commercial partners to communicate with the end-customer. Bridgestone has specific networks of specialized retailers for each product type: “First Stop” for cars, “Truck Point” for trucks and buses, “Agri Point” for agricultural vehicles, and “Bikers Club” for motorbikes. The appearance of every outlet clearly identifies it as a Bridgestone partner.
Working in close contact with retailers gives us better knowledge of consumer needs and market trends. Organizing retailers into networks specialized by market segment also means that we can offer them specific training projects.
The First Stop outlets, for example, are identified by dedicated layouts, Bridgestone colours and a specific sign that makes them easier to recognize as a partner. Moreover, retailers in the First Stop network enjoy specific advantages such as tyre insurance. Or they can take advantage of a partnership with Bridgestone and become exclusive retailers for some of our products (Potenza Adrenalin RE002 and Firestone SZ90 RFT). The First Stop network in Italy has launched an e-commerce platform, www.firststop.it, through which end-customers can buy tyres online and then go to the nearest First Stop retailer to collect the tyres and have them mounted on their vehicle.
To conclude, are any new products due to be launched in the near future?
The real new development for Bridgestone in Italy is the creation of a completely new organization: in January, Bridgestone Europe announced the appointment of a managing director for the new Bridgestone Europe South Region. With over 200 employees, Bridgestone Europe South Region will coordinate from Italy the branches in Albania, Bosnia, Bulgaria, Croatia, Kosovo, Macedonia, Malta, Montenegro, Romania, Serbia and Slovenia. The reorganization aims to increase efficiency, strengthen product line management and improve customer service.
From the point of view of products, in the first quarter of 2012 we launched on the Italian market the new Turanza T001 which will gradually replace the Turanza ER300 and offer greater safety, comfort, resistance to wear and fuel efficiency. In 2012, the Turanza T001 will be available throughout Europe in 40 sizes (for 15” and 18” rims), while the production of a further 37 sizes is envisaged for January 2013.
For motorbike products, 2012 is the year of the Battlax S20, a road tyre derived from our experience in MotoGP.