Mr. Richard J. Kramer, Chairman and Chief Executive Officer of Goodyear Tire & Rubber Company, has called the tire industry “a great industry to be in, both now and in the future”.
In his keynote speech at the World Rubber Week, he said he is optimistic about the future of the global tire industry and its indispensable role in people’s lives and commerce around the world. “Many of the high-profile tech companies that got the headlines have come and gone, but the world still moves on rubber. Our industry is still here, and I’m confident we’ll be here for the long term.”
Mr. Kramer discussed the factors that are shaping the global tire industry in the near future and Goodyear’s strategic response to those trends. “We believe our strategy is creating competitive advantage for Goodyear and providing opportunities for everyone along the rubber and tire supply chain.” .
At the same time, he reminded the stake-holders that “value for all of us is ultimately created in the marketplace, by consumers and end-users of our products. We can never forget that.”
According to him, the growth of the middle class, especially in developing markets, will be a key driver for industry growth, according to Kramer. “The continuing emergence of the middle class around the world and the love of mobility ingrained in the human spirit will lead to increased vehicle sales in emerging markets. That translates into tire volume growth for decades to come.”
Mr. Kramer also sees growth opportunities in mature markets. “In mature markets such as North America and Western Europe, the growth is being driven by the changing mix to high-value-added tires with increasing technology. Profitable segments such as winter tires, SUV tires and light truck tires offer higher margins as informed consumers are willing to pay for high value-added tires.” Tire companies, however, will need to change to capture this growth. He discussed how the newest generation of consumers, the Millennials, is changing the retail landscape for the industry.
“They have the leverage, and are buying what they want, when they want, and how they want,” he said. “Millennial consumers are not going to adapt to us and the way we’ve sold tires for the past 100 years. We have to become a fast-moving, consumer-driven, technology-savvy industry. We have to do more than sell tires. We have to sell a convenient and frictionless experience with our product and make the tire buying process easier.”
While the industry should celebrate its century-old heritage it should not be bound by it. “The world continues to move forward, as it always has. The new challenges and new opportunities that come with new technologies and new consumers demand that we keep our eyes on the future.”
Goodyear is one of the world’s largest tire companies, employing approximately 73,000 people and manufacturing its products in 54 facilities in 22 countries around the world. Its two Innovation Centers in Akron, Ohio, and Colmar-Berg, Luxembourg, strive to develop state-of-the-art products and services that set the technology and performance standard for the industry.