Javier Mendoza
Director General
Continental Tire Mexico, Central America & the Caribbean
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View from the Top

Intriguing Discoveries in Sustainable Materials for Tires

Tue, 09/15/2015 - 13:58

Q: How has Continental Tire progressed with its goals for the light and heavy vehicle segments?

A: The four brands we manage within Continental are Euzkadi, General Tire, Continental, and Barum, which are divided among the four main market segments of premium, quality, budget, and ultra-cheap. Continental is our premium brand, Euzkadi and General Tire attack the quality segment, while Barum targets customers with cars older than 10 or 12 years. Our tires must have the same level of quality as Original Equipment (OE) and we will not compromise on this for lower prices. Among the new manufacturers, we are already working with KIA Motors and Audi to have our tires approved, and we will most likely get a contract for the new Audi Q5. Additionally, we have a longstanding contract with Volkswagen and are involved in all its projects. Continental Tire will certainly be collaborating in the production of the new Tiguan.

We grew 26% in our premium segment by increasing the Continental brand’s market share from 14% to 20%. We will not compete against low price articles, since we want to attack the premium and quality markets with our premium mix. In the heavy vehicle segment, currently 55% of the market belongs to other brands with lower quality. Nevertheless, we currently produce the best tires in our segment in terms of rolling resistance, and we perform 6m to 7m better than some of our competitors in braking conditions. For 2015, we currently expect an approximate growth of 6%, but given the national economic circumstances and the evolution of Mexico’s GDP, we might lower that to 4%.

Q: Considering the benefits of Continental Tire’s products in terms of fuel efficiency and consumption, how open has the market been to embracing these advantages?

A: The market is becoming increasingly intelligent when it comes to tires. Gasoline prices in Mexico are skyrocketing compared with the US, leading clients to choose Continental’s EcoPlus tires. In the past, fleet owners performed their own maintenance service, but now they are delegating these activities to specialists. For that reason, we have installed small shops in several fleet companies, responsible for the service, alignment, and balancing of every unit. That way, companies do not have to worry about their maintenance, allowing them to focus their efforts on their core business.

Our national accounts are represented by big fleet clients like Pepsi, Coca-Cola, Corona, Bimbo, ADO, and Flecha Amarilla, who are all looking for a single supplier for their operations. These companies want one price, one invoice, and the same service throughout the country. Therefore, we are offering a national price for these customers and we are training the people in every fleet.

Q: In terms of R&D, what new products is Continental Tire releasing, and what will be their impact on the Mexican market?

A: One of our main projects is the V.ply tire, which is German technology that combines the benefits of radial tires with conventional technology for port applications. In Rich Sacker equipment, the tire needs to be robust and with extremely rigid sides to avoid lateral movements. Similarly, the material needs to be hard enough to resist sharp objects that may endanger the tire. We needed a product that offered the strongest braking grip at the lowest cost. V.ply tires were developed with the highest resistance, with a longer useful lifetime, and with enough grip to prevent slipping even with enormous loads in the truck. The basis of this technology and the source for its name is the V design of its multiple layers of high strain polymer fibers. These fibers are aligned in a V angle, and they are fixed to the tire by three independent steel cores.

Q: What new technologies and processes is Continental Tire applying within these new products?

A: Our Taraxagum technology enables us to obtain rubber from dandelions. While we have natural rubber in the south of Mexico, Taraxagum can be obtained from Mexico City, San Luis Potosi, or the US. The advantage of this technology is that you can plant its source in any country, offering price stability and a much higher availability for production. Taraxagum offers quite similar performance to conventional rubber, but does not depend as much on price fluctuation. Additionally, given the high demand for natural rubber, we are rapidly consuming all rubber trees, so this new material offers a much more sustainable alternative for the environment.