Q&A with Stefano Sanchini, Sales Director, Bridgestone Middle East & Africa

How has the tire industry grown and evolved during the last decade? What developments have emerged and dominated?

Due to a heightened consumer awareness of the negative environmental impacts of fossil fuel, vehicle manufacturers have had to find ways to increase fuel efficiency which has directly impacted the efforts to lower the rolling resistance in tires.

As technology today has shaped a new customer-centric approach to marketing, the manufacturer-local partner relationship has become very vital. Product know-how and value creation needs to be clearly communicated to the customer.

In the consumer market there has also been an increasing preference for a wider range of tire sizes. Because of this, inventory management of tire operations has become more complex in order to keep operations efficient and sustain margins.

What challenges did the tire market face in 2017? How did these challenges affect Bridgestone Middle East?

2017 presented a particular set of challenges to tire manufacturers and other related segments. Growth in Middle East and Africa remained subdued due to which a slowdown in the demand of tires was witnessed. Political unrest and conflicts in the region made it difficult to conduct business and logistical operations, which had a direct impact on our business. A global increase in raw material prices also hampered the profitability of all stakeholders in 2017.

How is the raw material scenario? How is it impacting your margins?

An increase in raw material prices has hampered the profitability of brands in 2017. While overall raw material price level was still high compared to 2016, normalization in prices was witnessed in the 2nd half of last year.

Competition in the African continent has always been high and the increase in the number of budget brands launched has made it even fiercer. Hence, market prices remain stable and in some markets there is even a decreasing price trend, initiated by important market players to recover their volume losses.

An optimized product portfolio and increase in sales volume has helped Bridgestone manage profit margins. We recorded double-digit growth in overall sales volume in the Middle East and Africa, while Firestone, a Bridgestone family brand, saw a strong increase in demand across the region.

We expanded our reach to Iran, which is a huge and growing market. Our sales volume also doubled in East Africa following a restructure, while double-digit growth was recorded in the Gulf, Levant and Egypt.

Raw material prices are expected to remain relatively stable in 2018; a slow increasing movement is foreseen in the medium term. Bridgestone will continue growing in the markets in all segments, and as a global leader we will continue providing best suited products and services for our consumer’s needs.

What is Bridgestone’s direction for 2018 and how do you visualize global tire market behaving in 2018? What changes to industry and consumer behavior do you see impacting the tire industry in the next decade? What are the major trends that will impact the tire market in 2018 both globally and regionally?

As one of the world’s leading tire and rubber companies, the Bridgestone Group supports the movement of people and goods around the world. Mobility is essential to everyday life today, and making it convenient and comfortable contributes to a better society.

At the same time, the social problems arising from mobility, such as traffic accidents and congestion, and regional inequality due to a lack of means of transportation, have become increasingly serious. The further aging of societies and forecasted population growth have raised concerns that conventional mobility is unsustainable.

The Bridgestone Group is working to address these issues, utilizing its core competencies to resolve individual problems through its solutions business and realize safer and more comfortable transportation. We also seek to play a key role in building new mobilities society that people around the world can enjoy.

2017 presented a particular set of challenges to tire manufacturers and other related segments. Political unrest and conflicts in certain parts of MEA has made it difficult to conduct business and logistical operations in these areas, which as a result has directly impacted the commercial vehicles sales in these areas. In 2018 however, a resolution in the conflicts that have plagued the Middle East region is expected to be seen which will have a positive effect on the tire market.

Increasing population in emerging markets such as Asia and Africa and resultant increase in demand for vehicles are expected to further drive the tire markets in these regions.

The influence of changes in Europe will also be felt in this region, especially those concerning sustainability, recycling and fuel efficiency. We expect regional governments to take the initiative and increase regulations in these areas, particularly as a global trend for tires that are both more efficient and manufactured in a sustainable way grows.

Technology, IoT and higher levels of consumer demand for safety is a major trend emerging in 2018 as the topic of autonomous driving is being addressed by almost every car manufacturer today. Bridgestone is aware of these demands to make motorists lives easier in a high tech-competitive market.

What are new products in car and truck segment that you plan to introduce?

We saw once again in 2017 just how diverse the needs of the MEA market is, which is reflected in our current product line-up. Today we offer the Alenza, Dueler, Potenza, Ecopia and Turanza which are all targeted at different segments of consumers ranging from sport enthusiast, avid off roaders to those seeking a luxurious, comfortable ride.

Commercial product requirements in various applications are demanding as always. Our products are developed and improvised based on changing market needs. Bridgestone products exceed customer expectations of more than one life as its casings are more durable & popular among retreaders. Our most popular pattern G582 is successfully competing in MEA market.

What about commercial tires? How has the industry changed during recent years and where do you think it is going in the coming decade?

Commercial truck tires market is very diverse; it runs from minivans, pickup trucks to heavy-duty construction and long haul tractor trailers. In past few years economic growth for truck tires in major markets has been uneven.

Looking forward in 2018 we believe the scenario will change for the better due to the increasing spending power of the middle class and population growth.

The Organization for Economic Co-operation & Development (OECD) predicts global vehicle demand to double by 2030. Increasing demand will drive growth of the tire industry however it will be challenged by environmental policies, political & regulatory controls from markets & industries. As mentioned above the influence of environmental regulation changes in Europe will also be felt in this region for commercial tires, especially those concerning sustainability, recycling and fuel efficiency. Regional governments are already taking initiative and trying to match regulations with Europe.

Tire manufacturers are currently exploring new materials, technologies and compounds to minimize dependency on natural resources like oil and rubber. Low RRC, cost competitive & better performing tire requirements from OEM also pressurizing manufacturers for further exploration.

How is the arrival of more environmentally friendly vehicles affecting the tire market? Will there be a higher demand for environmentally friendly tires? How is the tire industry preparing for this change?

The transportation sector (automobiles, tires, etc.) has a significant impact on the environment, particularly in terms of resource consumption and CO2 emissions. As the world’s largest tyre and rubber manufacturer, the Bridgestone Group is working to contribute to the realization of a sustainable society while providing a constant and reliable supply of advanced and high-quality products to meet the needs of our customers around the world.

To fulfill its mission, the Bridgestone Group has established long-term environmental vision. The Group has established the usage of “100% sustainable materials” as an initiative to make full use of its technological and product development capabilities.

The importance to reduce the impact on the environment and global warming is expected to only increase the demand for such tires in the future. Sustainability is the way forward and tyre manufacturers across the globe. As a result we have developed our ECOPIA range that caters to provides eco-friendly performance through higher fuel efficiency and safety. It allows for reduced rolling resistance, which in turn enhances fuel efficiency. ECOPIA also reduces the production of harmful carbon dioxide emissions that contribute to global warming.

With automation and self-driving cars coming up in the future, will they be equipped with ‘smarter’ tires? What kind of technology will those tires have? What developments do you see to connected cars/IoT integration during 2018? How will Bridgestone react to these developments? And in what ways will it shape the motoring experience?

The trend of connected cars has significantly increased over the last year thanks to IoT.
Bridgestone DriveGuard is at the forefront of innovation deploying the latest technology to bring mobility to the next level by notifying drivers through the indicator on the dashboard that the tire has been punctured and allowing the driver safe driving for the next 50 miles at up to 50 mph.

It is designed to be fitted on to all passenger cars to remove concerns relating to tire damage (including in sidewall and tread areas) and to deliver the highest standards of safety, wet performance, comfort, and fuel efficiency; giving drivers additional peace of mind, safety and convenience. This innovative product has already hit the European market.

Bridgestone has also partnered with Xee earlier in 2017. Xee is the budding start-up from FrenchTech reinventing how people use cars with its platform of connected services. In the fast growing connected car market, expected to have more than 400 connected vehicles by 2020 and be worth an estimated $350 billion, 84% of sales will be generated by aftermarket players.

Smart Mobility is another example of innovating for modern mobility challenges. At night, when you have poor visibility, getting detailed information on road conditions would be helpful for your safe driving. The Bridgestone Group’s “CAIS™ (Contact Area Information Sensing *)” is a technology to classify road conditions in real time into seven different types, dry, semi-dry, wet, slush, fresh snow, compacted snow, and ice, by using sensors attached to tires.

At Bridgestone we highly value innovation, it is in our DNA, and it is why we believe that changes in motoring are inevitable. As the market for IoT grows, so will the experience of motorists change as they continuously become more well informed and equipped through new technologies.