Bridgestone driving toward larger European presence

BRUSSELS (Nov. 30, 2016) — Bridgestone Corp. may be the largest tire maker globally, but in Europe the company is still a “challenger” that needs to grow in nearly every segment, Bridgestone Europe CEO Paulo Ferrari told European Rubber Journal recently.

“We have an ambitious, but achievable, plan for growth: we want to grow market share in every segment, with a specific focus on higher mix,” Mr. Ferrari said.

The Italian native, who will become a Bridgestone Corp. vice president and senior officer of next year in addition to his European duties, said he appreciates that the European business still has a long way to go to achieve its goals.

“Bridgestone is the leader in the world but a challenger in Europe. We fully accept the challenge this creates as it is what our goal for ‘dan-totsu' is all about,” he said, referring to Bridgestone's stated ambition to be the clear leader in every market in which it competes.

Since joining Bridgestone in September from Pirelli Tyre S.p.A.,  Mr. Ferrari has been practicing the Bridgestone principle of “genbutsu-genba” — decision-making based on verified on-site observations — while visiting all six Bridgestone sales regions across Europe to learn about the business, which includes 10 factories.

The Japanese company, he stated, is gaining market share and “outpacing industry growth” with a 7-percent annual increase in passenger and industrial tire units over the past few years.

Last year Bridgestone generated nearly $3.5 billion in revenue in Europe, or about 11 percent of the firm's global sales. That puts Bridgestone fourth in Europe behind Group Michelin, Continental A.G. and Goodyear but slightly ahead of Pirelli Tyre in terms of revenue.

At the same time, Mr. Ferrari is keen to get the company's newest plant – in Ulyanovsk, Russia – up and running. The firm has just completed construction of the $375 million car and light truck tire plant in Russia's Volga Region east of Moscow.

With the facility expected to ramp up to about 12,000 units a day by 2018 — mainly winter tires for the Russia/CIS market — Mr. Ferrari sees this as “a great opportunity to extend our manufacturing capacity” in Bridgestone's European/Middle East/Africa region.

The Russian plant, he said, will raise Bridgestone's overall competitivenessby increasing its capacity to develop and produce winter tires and to service this market.

The CEO, who led Pirelli Tyre S.p.A.'s Latin America division for 19 months prior to his current job,said the investment underlines Bridgestone's ambitions in Europe.

To achieve the its growth goals, Bridgestone will invest across the board, he said, from research and development resources and offer-development to manufacturing footprint and skills across the EMEA region.

In the passenger tire market, Mr. Ferrari said he believes Bridgestone is “relatively underrepresented compared to the value of our brand, our technology and our portfolio.” Likewise, he said, “We have a solid [truck tire] market-share position, but again, I think we have room to grow further.”

Progress, Mr. Ferrari expects, will be driven by Bridgestone's development work in areas such as extended mobility and integrated tire systems.

This year, for instance, Bridgestone launched its DriveGuard run-flat for the summer and winter replacement tire markets in Europe.

Described by Bridgestone a “game-changer” for the replacement market, DriveGuard is billed as a premium touring tire with the added bonus of extended mobility and, hence, safety — rather than a “run-flat.”

According to the executive, DriveGuard volumes are now “ahead of the plan” in both winter and summer tire markets, and Bridgestone expects more than 1 million DriveGuard tires on European roads by year-end 2017.

To meet the increasing demand, Bridgestone expanded production of the tires from one plant to two, adding capacity at its Tatabanya, Hungary, factory to that already in place in Poznan, Poland.

This is an example of Bridgestone's “upside-potential and our ability to create a new replacement segment,” said Ferrari, pointing to Bridgestone's focus on linking R&D work to the needs of the end user.

Another innovation was unveiled at the recent IAA Commercial Vehicles 2016 show, where Bridgestone showcased its Tirematics “connected tire” system that is designed to provide total tire care for fleet managers.

Such developments is now being guided by a Bridgestone concept called “The Boss,” through which the tire maker aims to become more highly focused on delivering value to its customers.

With the development of DriveGuard, for example, this has meant carrying out research to understand more fully what the driver wants, Mr. Ferrari said.

“So, everything around the new product, from the features to the messaging and execution, was based on that input and was then validated with the Boss,” he explained.

The concept, he added, extends to increasing support to Bridgestone's distribution partners and giving them more reasons to grow the Japanese tire maker's brands in the market.

Asked about the impact of the increasing flow of inexpensive tire imports into the European market, the Bridgestone executive said investment in innovation and technology was the best defense.

“We believe that we can respond [to cheap imports] by continuing to develop a compelling overall offering for the end-users… including digitally based solutions,” he added.

But the Bridgestone leader also wants “relevant institutions” to play a more effective role in increasing awareness on the importance of tires in vehicle performance and safety.

This includes the EU tire-labeling scheme, which was introduced in 2012: while appreciating its contribution to consumer's understanding of performance criteria, Ferrari called for further action on implementing the law.

“The current weak point is the limited surveillance being applied by the authorities,” he said. “Consequently, we welcome the recent European initiative for a joint-financed action in tire-label market surveillance.”

Mr. Ferrari went on to note that there was an “opportunity” in the area of retreads, where he said “labeling would highlight the benefits to society through improved sustainability.”

“Ultimately, the more the regulation and the labeling is to the benefit of the consumer and pushes the technology, the better, as then we are happy to bring the right technological solutions to play,” he added

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Shahrzad Pourriahi is a reporter with European Rubber Journal, a United Kingdom-based sister publication of Tire Business.