Last year, Japanese manufacturer Falken released five new tyres, developed three new OEM partnerships and continued its involvement in motorsport with the Nürburgring 24 Hours. Continuing just-auto’s series of interviews with major tyre makers, Matthew Beecham talked with Falken’s UK and Ireland Director, Matt Smith to take stock on the company’s business.
Could you summarise your new position and the reason for its creation?
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I joined Falken from Kumho tyres in late 2012. I am responsible for developing Falken in the UK and Ireland. This involves consolidating our relationship with existing distributors as well looking for new channels. Most recently this has included Kwik-Fit. I will also be the first contact for OEMs in UK and Ireland looking for factory fit or dealer fit tyres. It’s the first time Falken has had its own person looking after the market and is the latest stage in the growth of the European subsidiary based just outside Frankfurt.
What have been Falken’s major achievements during the past 12 months?
Falken launched a range of five new tyres into the European market. That was unprecedented for the brand and demonstrated the benefit of being part of Sumitomo Rubber Industries.
In the UHP [ultra high performance] sector, Falken added two new tyres to our AZENIS range, the FK5453 and FK453CC, the latter a high performance tyre for Sports SUVs.
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By GlobalDataWe also released three other tyre models; the ZIEX ZE914, the Eurowinter HS449 winter tyre and the WildPeak A/T AT01 all-terrain tyre.
Our partnership with Micheldever saw new independent dealers taking on the latest Falken tyres and now as I just mentioned Kwik-Fit will be stocking our tyre range to sell directly to the consumer.
We also extended our co-operation with the VW Group to provide tyres for the Polo, Seat Mii, Skoda Citigo and the VW Up city cars.
So Falken’s business with VW has grown, too?
Yes, Falken’s relationship with the VW Group is going from strength to strength. Last year we provided the Volkswagen Polo with a specific derivative of our Eurowinter HS449, which Falken created and validated in less than nine months.
After the success of using Falken tyres for the Volkswagen Up, we have seen the specific Sincera SN831A Ecorun fitted to the SEAT Mii and Skoda Citigo.
In addition Falken is supplying a number of Japanese OEMs. This OEM growth is positive as it feeds the ‘first time’ replacement market. With a new deal to supply Kwik-Fit, we have more channels to satisfy this demand.
Many of these city cars have ‘green’ features. Was this key to securing the contract?
The Sincera is a great all round tyre. It is both durable, comfortable and quiet making it a good choice for premium city cars so green wasn’t the only aspect but it is fair to say we are creating compounds that deliver higher fuel efficiency. The Falken ZIEX ZE914 Ecorun has much higher silica content and only last month won a recommended accolade from Germany’s GTÜ and Autoclub Europe for providing excellent fuel economy alongside strong road handling.
Are there any particular tyre trends that have been driven by OEMs in recent times?
Yes, one particular trend is size and stance of modern vehicles. OEM styling and design have driven the fitment of larger rimmed tyres with a lower profile for vehicles in all sectors. This means that the once most common tyre size of 195/65/15 was replaced by 205/55/16 which is now being chased by 225/45/17. The result is cars that once had very standard tyre sizes now have tyre sizes that were once the domain of UHP specifications. Look at the creep of sizes on a Mondeo or Golf in the past five years to demonstrate that. This means that tyre replacement costs are much higher than consumers had to deal with on previous generations of cars.
We are also seeing the effect of tyre labelling. Patterns that scored poorly in wet weather grip, rolling resistance and noise are being discontinued. New tyre development is really focussing on getting good scores in those areas. But there is an important point to note that a tyre that scores well in those tests is a good tyre and in some ways the tests are not telling the whole picture. The tests reflect performance of a new tyre and don’t identify how a tyre performs say, six months later. They simply provide a snapshot of performance of a tyre on a given date. For consumers, it is useful but there is more that could be done for sure.
What is the effect for consumers and retailers with that introduction of tyre labelling?
It has been four months since the introduction of tyre labelling and impact of the legislation is more apparent at retailer level. A survey by Tyre Trade News found that 49 per cent of tyre retailers declared tyre labelling to be a necessary and beneficial addition to the tyre market. As I said it does give consumers some more insight. Whereas consumers may have simply purchased tyres by brand familiarity and reputation, often opting for premium well-known brands, tyre labelling now gives them the opportunity to directly compare tyre specifications and opt for the tyre most suitable for their requirements regardless of brand. This helps smaller non-premium tyre brands compete in an already highly-contested market. However, I reiterate that we should do more to provide insight into performance over the life of the tyre.
Personally, I can foresee that tyre design will converge as each tyre OEMs focus on these attributes. We are already starting to see some features appear on numerous brands as they are the best ways to achieve these attributes.
How is the UK tyre market shaping-up this year?
There are plenty of challenges for tyre manufacturers and dealers to address if they wish to succeed in 2013. While data from the SMMT indicated a growth in 2012 for new car registrations, it was still 14.9 per cent below 2007. This makes competition in the tyre trade much tougher, as manufacturers and dealers fight over a smaller market share. We are reacting through providing more support for the dealers with novel incentive campaigns. Look out for a campaign later in the year along these lines.
It is very tough at the moment. Tyres tend to be a distress purchase and this is particularly true in this economic climate. Research by our distributor Micheldever has shown a worrying trend of UK consumers using their tyres beyond the legal limit to avoid the cost of purchasing replacements. According to their research, Over 53 per cent of vehicles checked had at least one tyre below the legal minimum of 1.6mm and 95.8 per cent of vehicles had a tyre below 2mm. They also reported that consumers are now typically buying only one tyre per dealership visit rather than the previous average of two.
You mentioned earlier that Kwik-Fit is now stocking Falken tyres?
Yes, this has been an exciting development for Falken as Kwik-Fit will be providing our tyres directly to consumers from their service centres across the UK. Kwik-Fit offers unprecedented scale for a brand such as Falken. We also have a distributor for all-Ireland, Philip White Tyres. They are pushing our whole product range – including truck tyres and will also be selling these into the mainland UK.
The remainder of this interview is available on just-auto’s QUBE research service
