With the amount of information available to tire buyers ramping up continuously—especially online—Goodyear aims “to absolutely win the labeling race in Europe,” Goodyear CFO Darren Wells told a Deutsche Bank analyst conference in Chicago.
Mr. Wells' comments reference a trend toward standardized tire labeling around the world, which is being led by Europe—where standards take effect November 2012—but which also includes pending legislation in the U.S.
His comments accompanied a slide titled, “Goodyear accelerating innovation efforts to win tire labeling race.”
Mr. Wells also noted the Internet is affecting how consumers research and buy tires, and Goodyear expects it to change further and faster, as consumers research tire purchases online then buy from another outlet—possibly over the Internet or possibly more traditionally.
The Goodyear CFO also said “customer demand has been higher than what we have been able to supply for much of the last 12 months,” forcing Goodyear to run its inventory levels down further than it likes.
In particular, he said the fuel efficiency is in strong demand from customers at both OE and replacement.
Global tire demand is growing around 50 million units per year, which represents five to 10 large tire factories that need to be built each year, he said.
Goodyear, however, expects to limit volume growth to 3 to 5 percent annually while shifting capacity upmarket, into higher-margin products.
Mr. Wells also said there is strong demand for fuel-efficient tires and the technologies used exclusively in high-end tires are now moving toward the mid-range tires.