Not much leverage on tyre profits
Page 17
If you've noticed an error in this article please click here to report it so we can fix it.
PROFIT margins on tyres in the UK are insufficient to support existing research and development programmes, claims the Imported Tyre Manufacturers Association.
ITMA claims that tyre price levels, largely determined by domestic producers, fell 20 to 25 per cent below those in the rest of Europe.
Over the past decade an improved product, giving greater mileage, has failed to maintain prices equal to inflation.
A decline in vehicle sales has also hit tyre manufacturers which have continued to offer price incentives in attempts to maintain production volumes. This has not prevented the closure of six tyrc plants in the UK over the past 10 years.
ITMA members, which include such names as Trelleborg, Viking-Askim, Vredestein, Modi Rubber, Gislaved, Semperit, Toyo, Kleber, Bridgestone, Firestone, Yokohamina, Mohawk, Alliance, Pricurnant and Taurus, account for about 30 per cent of the UK after-market worth in excess of £80 million. Worldwide their parent companies claim sales of over B, 000m.
The total UK commercial vehicle replacement market will amount to 2.6m new units for 1985, plus a large quantity of remould tyres.
"The UK's indigenous manufacturers are weak because of their original equipment prices", says ITMA, "and their exports are too heavily linked to the yo-yo value of the pound".
ITMA, which plans to encompass 95 per cent of all. non-British Rubber Manufacturers Association imports, has no wish to destroy tyre manufacturing in Britain, hut says that all would benefit from more stable market conditions.
The industry claims the right to a return commensurate with its investment, but is at a loss as to how to implement it.