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The Smithers Report Editor: Janine Young
ISSN 2165-4379
A News Digest of Activities in the Tire Industry Do not copy, fax or email
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April 2, 2020 - Vol. 33, No. 14d

FINANCE
Brembo acquires an interest in Pirelli
Brembo, an Italian firm that designs, develops and produces braking systems, announced March 31 that it
purchased a small interest in Pirelli.
The company said in an announcement: “By adopting a long-term non-speculative approach, Brembo has
autonomously decided to invest in Pirelli, whose history, brand, leading position and innovation-oriented
approach makes it, just like Brembo, an excellent and particularly significant company in its industry.”
As of March 31, Brembo, both directly and through its parent company Nuova Fourb, holds a 2.43% stake
in Pirelli.
Pirelli, which provides tires for Formula One racing, also supplies luxury and performance automakers such
as BMW and Audi. The company positions itself as a premium brand for on and off of the track use.
Brembo’s focus is also the premium market, including providing brakes for Formula 1 racing.
In a separate announcement, Pirelli said April 1 that it had secured a new five-year, €800 million financing,
which it will use mainly to repay existing debt.
(Brembo – Curno, Italy)

WHAT'S NEW IN TIRES

Giti Tire announces production shutdown in South Carolina
Giti Tire will temporarily suspend production at its US manufacturing facility in Chester County, South
Carolina from April 5 to April 19. The plant is closing to adjust for current market conditions due to the
impact of COVID-19, a local news report said.
As an essential business, Giti Tire will continue its sales and distribution operations to serve its dealers and
customers. The tire maker said it continues to monitor and follow CDC, FEMA, and federal, state and local
government guidelines and protocols to ensure the health and safety of our employees, customers,
suppliers, and the surrounding community. It is also monitoring market conditions and will adjust product
levels as necessary.
Giti Tire is headquartered in Singapore and operates seven manufacturing plants. It produces tires for
original equipment vehicle manufacturers, motorsports teams, and consumers in more than 130 countries.
It began initial production at the $560 million plant in Richburg, South Carolina in October 2017.
(Staff and wire reports)

Goodyear suspending Americas tire production until further notice

Goodyear Tire & Rubber announced Wednesday, April 1, that it is extending the temporary suspension of
operations at all manufacturing plants in the Americas until further notice. Two weeks ago, the company
said it was shutting down until at least April 3.
The Akron, Ohio-based tire maker said in a news release that the extended closings are in response to the
sudden decline in market demand resulting from the rapid spread of the COVID-19 pandemic.
"We are closely monitoring market demand signals, inventory and supply levels and warehouse and
distribution operations to continue delivery of Goodyear products," the company said in a statement.
(Staff and wire reports)
The Smithers Report - April 02, 2020 Page 2 of 3

WHAT'S NEW IN TIRES

Dunlop builds its first drag-racing bike tire
Sumitomo Rubber’s Dunlop motorcycle tire brand is now supporting two-wheel drag racing with a new tire
that meets the demands of the Pro Street Bike class. The class has gained a lot in horsepower and speed
in recent years, and the new tire is suited to meet those demands.
To expand the DOT motorcycle tire choices for professional and amateur drag racers, Dunlop created the
new Dragmax in 190/50ZR17 size. The size is the most popular for serious drag racers on metric and V-
Twin motorcycles.
The radial tire utilizes Dunlop’s N-TEC construction, which is similar to technology used in the tire maker’s
rear road racing slicks. N-TEC offers increased stiffness, while a continuously-wound aramid jointless tread
construction creates maximum feel and stability. The tire design allows racers to run very low pressures,
increasing the footprint for maximum traction, Dunlop said.
The tire also has a wider and flatter profile than the typical hypersport tire with an increased footprint. Its
construction minimizes centrifugal growth to keep that footprint as consistent as possible, which also
reduces the risk of de-beading, the company said.
(Dunlop Tire – Buffalo, NY)

Galaxy solid tires now backed by five-year warranty

Alliance Tire Americas (ATA) has extended its warranty for Galaxy Severe Duty Solid (SDS) tires from two
years to five years. The new warranty applies to purchases of Galaxy SDS solid tires after January 1, 2020.
The new warranty reflects the company’s confidence in the performance and quality of Galaxy SDS solid
tires, which it says have been used in some of the toughest environments in the world.
Brian Sheehey, vice president of marketing for ATA, commented: "From the aggressive block tread of the
Galaxy Hulk SDS to the abrasion-resistant, deep compound of the Galaxy Super Smooth SDS, we've seen
our solid tires deliver long service and outstanding performance. We want our warranty to reflect that.”
The new warranty can be administered through ATA's Warranty Wizard app, which allows tire dealers to
file claims quickly by answering a few questions and snapping photos with their smartphones.
The new five-year solid tire warranty joins other ATA warranty upgrades, including 10-year coverage on
steel-belted Alliance, Galaxy and Primex farm radials.
(Alliance Tire Americas – Wakefield, MA)

FINANCE
Share buy-back, property sale and product innovation to strengthen Hankook Tire
Hankook Tire’s board of director has decided to buy back its stock shares to enhance shareholder value,
the company announced. It has plans to purchase about KRW 50 billion ($40.6 million) worth of Hankook
Tire shares over the next six months. The company will also “sharply expand the size of dividends,” it said.
To strengthen its financial solvency and streamline assets to secure investments, the company plans to sell
idle properties, including the site for the Busan Yeongdo Island logistics center and use the funds from the
sale to fuel new growth.
To boost its competitiveness, the South Korean tire maker plans to focus on innovation in product
development, supply chain management, marketing and sales. In particular, it will expand investments in
the development of tires for next generation vehicles. It will also work to secure additional distribution
channels in the domestic and global markets such as the US and Europe.
(Hankook Tire – Seoul, Korea)
The Smithers Report - April 02, 2020 Page 3 of 3

VEHICLE INDUSTRY NEWS

Mazda participating in carbon-neutral biofuel research
Mazda is promoting its involvement in an industry-academia-government research collaboration to promote
the adoption of biofuels developed from microalgae. As part of its Sustainable Zoom-Zoom 2030
technology development program, the company is committed to reducing its average ‘Well-to-Wheel’ CO2
emissions to 50% of 2010 levels by 2030, and to 90% by 2050.
Expecting internal combustion engines combined with electrification will still account for some 95% of the
vehicles it produces in 2030, and that liquid fuel will remain dominant in the automotive industry until at
least 2040, Mazda sees a renewable liquid fuel essential to drastic CO2 reduction.
Because, when burnt, algae biofuel only releases CO2 recently removed from the atmosphere via
photosynthesis as the algae grew, Mazda says its development is critical to achieving the carbon-neutrality
of ICE powered cars.
Microalgae biofuel has numerous positive attributes as a renewable liquid fuel, according to the company.
Algae fuels can be farmed on land unsuitable for agriculture, can be grown with minimal impact on
freshwater resources, can be produced using saline and wastewater. They also have a high flash point,
and are biodegradable and relatively harmless to the environment if spilled.
Improving productivity and reducing costs of algae biofuels is critical to their growth, Mazda said. To that
end, the car company is lending technical support to research into genome editing by Hiroshima University
and plant physiology by the Tokyo Institute of Technology, which is intended to lead to a breakthrough for
the bio-based fuel.
(Mazda Motors – Dartford, UK)

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