By T Murrali
Bridgestone, based in Japan, is the world’s largest tyre manufacturing company. As the global growth centre of automotive production and use, the Asia Pacific region is its primary market. In an interview to Autoparts Asia, Hanashi Shinichi, CEO and Member of the Board of Bridgestone Asia Pacific Pte. Ltd, explained how the company is committed to its principles and how it will continue to launch innovative products and implement management reforms to attain its goal of becoming the undisputed leader in the region’s tyre industry.
Shinichi: The major trends in passenger car tyres are mainly driven by consumer-demand, car manufacturers (OEMs), and regulators/ government.
For consumers, we have noticed an increase in the uptake of eco-tyres. This can be due to an increase in eco-consciousness, or the desire to improve their vehicle’s mileage per litre of petrol. For OEMs, they are demanding low rolling resistance tyres, to help improve the fuel-efficiency of their vehicles. This is to meet stringent CO2 emission regulations that govern the export and import of vehicles that are sold in various markets.
To address the needs of both consumers and OEMs, Bridgestone has been expanding and improving our ECOPIA range of products. ECOPIA is a combination of the words `ecology’ and `utopia’, and provides eco-friendly performance through higher fuel efficiency. Bridgestone tyres with the ECOPIA mark are specially designed to offer low rolling resistance for excellent fuel economy, resulting in less CO2 emissions, while maintaining its wet braking performance.
Another trend is that consumers are increasingly demanding tyres for different applications, such as touring, sports and off-road driving. Bridgestone has a large portfolio of tyre products that address these diverse needs, which include TURANZA for touring, POTENZA for sports driving and DUELER for off-roading.
Q: What are the trends driven by regulations?
Shinichi: The last major trend is driven by regulators/ government, such as the related environmental regulation in each country. This regulation certifies tyres by assigning grades/ values for their rolling resistance, wet grip, and pass-by noise. In countries that have adopted this regulation, tyres which do not meet the minimum grade/ value for these attributes cannot be sold.
In the Asia Pacific region, each country has set its own environmental regulation, by defining which attributes are to be regulated and of their minimum grades. For example, Malaysia has introduced an environmental regulation that includes all three attributes based on a limit value for OE tyres only, while Korea’s regulation does not include pass-by noise and uses a grading system.
To address this trend, Bridgestone needs to understand the related regulations in each market and develop products that meet the grading/ value for each market, so as to maximize the opportunities in this region.
Q: Can you tell us about the evolution of ECOPIA passenger car tyres. How did you make the quantum jump in Bridgestone’s passenger car tyre sales in Asia Pacific region from just two percent in 2009 to 20 percent in 2014?
Shinichi: When ECOPIA was first launched in Asia Pacific in 2009, it was a new brand consisting of a single product, and made up two percent of the region’s passenger car tyre sales. From 2012 to 2013 new ECOPIA products targeting a wider range of vehicles were introduced, leading to ECOPIA making up more than 20 percent of the region’s replacement passenger tyre sales. Five years following its launch, ECOPIA passenger car tyres achieved sales of more than 10 million in the Asia Pacific region.
The success of ECOPIA can be attributed to drivers seeking new ways of stretching their petrol dollar. Bridgestone’s ECOPIA range of tyres utilise unique compounds and cutting-edge technology in tread design to strike a balance between fuel efficiency, safety and durability. Apart from reducing the production of CO2 emissions that contribute to global warming, ECOPIA products feature low rolling resistance, bringing fuel savings of up to 12.3 percent (Based on laboratory tests by Bridgestone technical centre in Japan using ECOPIA EP200, size 195/65/R15. Comparison based on Bridgestone ECOPIA EP200 and AR10 tyres).
In addition, Bridgestone has been actively promoting ECOPIA in the region through activities such as our `Tyre Check Service’ (TCS) activity, where we offer free tyre checks by our technical experts, to help ensure that vehicles are running with tyres with the correct inflation pressure and that they are in good condition. Correct air pressure will help prevent uneven wear, improve fuel efficiency, and safety performance of the tyre. With proper tyre maintenance, coupled with ECOPIA tyres, drivers can enjoy improved fuel-efficiency and savings.
Another such activity is the `ECOPIA Go Indonesia’ project where ECOPIA was pitted against competitors’ tyres to demonstrate its superior fuel-saving characteristics under real-world road and traffic conditions. Conducted by professional drivers using several same-condition vehicles, with every element of the journey from the amount of fuel used, vehicle speed, tyre pressure and distance measured and shown to the attending media in real-time, `ECOPIA Go Indonesia’ showcased and strengthened its image as a fuel-saving tyre.
Q: How did the OEMs respond to this new range of tyres?
Shinichi: OEMs have responded to Bridgestone’s introduction of the ECOPIA tyres favourably. We have seen an increasing number of these tyres being fitted onto newly manufactured vehicles in the region. This is as car manufacturers have increased their focus on fuel consumption and efficiency, in line with vehicle, tyre and emission standards and regulations.
Of course, the ECOPIA tyres have to meet the stringent requirements of the OEMs. The tyres are evaluated not only on rolling resistance coefficient (RRC), but also on the balance among the other attributes such as wet braking performance, durability and tread life.
In Indonesia, the ECOPIA tyres have been well received by both the market and car manufacturers. They are fitted onto new cars and they have been available as replacement tyres since March 2013. As Low Cost Green Cars (LCGC) are becoming popular due to their fuel economy, coupled with factors such as the Indonesian government’s change in fuel policy, we have observed that fuel-efficient performance has become a mainstream concern. Under these circumstances, coupled with the launch of ECOPIA, Bridgestone has received good feedback from car manufacturers. This positive feedback, coupled with Bridgestone’s goal of contributing to a sustainable society and green environment, drives us to enhance our ECOPIA offerings.
In India, the government is considering the installation of restrictions related to rolling resistance coefficient (RRC), and car manufacturers have requested tyre companies to reduce rolling resistance, improve fuel efficiency and lower CO2 emissions. Hence, Bridgestone has plans to expand the presence of ECOPIA for both replacement and OE fitment in India.
Shinichi: In the passenger car aftermarket tyre segment, Bridgestone is focused on developing the sales network, to ensure that our products are easily available to end-users. By last December we had 300 franchise and license stores operating under the Bridgestone name in Australia. In India, we are opening and inaugurating new stores every month.
One of the key pillars of our retail strategy is the `Bridgestone Select’, or `B-Select’ stores. B-Select is an entirely new approach to tyre retailing which aims to provide premium service through a customer-friendly environment. Contrary to traditional tyre retail stores, B-Select sets itself apart by offering a pleasant and inviting store environment where customers are presented with more user-friendly information and greater transparency in the purchase process. We introduced the B-Select concept store in Malaysia in January this year. It can also be found in Australia, New Zealand, India, Vietnam, Singapore and South Korea.
With regards to products, we have a wide selection of aftermarket tyres to suit different types of drivers and vehicles. Our offerings include TURANZA for luxury sedans, POTENZA for sports cars and sport-driving enthusiasts, ECOPIA for fuel-savings, and DUELER all-terrain tyres for pickups, SUV and CUVs.
One of our latest products, the POTENZA Adrenalin RE003, is available only as an aftermarket tyre. Based on the many positive reviews RE003 has received following its launch in March, we are confident that it will catalyse the aftermarket further.
Our regional technical centre in Thailand, which has just moved into a new and larger laboratory facility, is another key component of our aftermarket strategy. We anticipate that this technical centre will further improve the quality of our aftermarket tyres that are sold in Asia Pacific, to drive and increase customer satisfaction.
Q: What are the challenges you face in maintaining the market leadership?
Shinichi: With the Asia Pacific region leading the global tyre industry in terms of demand growth, regional competition is intensifying. This competition comes from both established and emerging international and regional brands.
To address these challenges, Bridgestone is actively developing its presence in the Asia Pacific region. To date, the regional headquarters Bridgestone Asia Pacific Pte. Ltd. has 13 new tyre plants located in the region, and will continue to expand based on the market situation. In addition, we have proving grounds in China, Indonesia and Thailand, training centres in China and Thailand, a research & development facility in China, and a regional technical centre in Thailand.
Bridgestone has been actively expanding its sales channel network. In this region, as of 2014, our consumer channel network has more than 7,600 stores, while our commercial channel network has over 1,100 stores. We aim to steadily expand our retail network and increase the number of stores in the near to mid-term, while constantly improving service levels.
From a product point-of-view, Bridgestone has a full product line catering to all types of roads, vehicles and weather. We invest significantly in our products to provide our customers the best possible quality and safety.
As per our corporate mission of ‘Serving Society with Superior Quality’, Bridgestone companies in the region work together across the value chain to ensure that quality products reach our end-users. We believe that the high quality and safety of our products will enable Bridgestone to face the competition and maintain market leadership.
Shinichi: The recent products created from collaborative product development with vehicle manufacturers include our ‘ologic’ technology and Run-Flat Technology Tyres.
ologic Technology: Bridgestone developed its ologic technology for the revolutionary BMW i3 electric vehicle. It is a futuristic technology for sustainable mobility. ‘ologic’ refers to the next generation-size tyre technology, which pushes the boundaries of conventional tyre design.
By capitalising on the synergies of a large diameter coupled with a narrow tread design, ologic technology improves aerodynamics (through reduced drag), achieves ultra-low rolling resistance and reduces tyre deformation. These factors help ologic conserve energy, that is lost through internal tyre friction, and extend battery autonomy, leading to reduced CO2 emissions.
The height of the tyre in relation to the width also increases the contact patch, which allows the vehicle to retain the dynamic driving characteristics of a much wider tyre. In short, ologic is an efficient tyre that offers optimum performance.
The most spectacular achievement for ologic technology, however, is that these improvements do not involve a trade-off in terms of safety. The tyre’s long contact patch (relative to its narrow width), and revolutionary tread design ensure outstanding grip in both wet and dry conditions.
Bridgestone’s ologic technology has received two major awards:-
- The Tyre Technology of the Year Award, presented at the 2014 Tyre Technology International Awards for Innovation and Excellence in Geneva.
- The BMW Supplier Innovation Award 2014 in the Efficient Dynamics category of BMW’s prestigious annual awards.
Going forward, the Bridgestone Group will leverage ologic technology and work to enhance and expand the line-up, advance global deployment, and broaden the number of vehicles equipped with ologic technology.
Q: What about Run-Flat Technology?
Shinichi: Run-Flat Technology (RFT) was first pioneered by Bridgestone with the aim of keeping the vehicle mobile even after complete air-loss. It was applied as original equipment on the Porsche 959 in 1988. In this early application, the RFT tyres’ ride quality was not as smooth and comfortable when compared to conventional tyres.
Striving to solve this problem, Bridgestone developed the second-generation RFT tyre in 2005, which offered improved riding comfort. In 2009, the third generation RFT tyre offered ride comfort which is equal to that of conventional tyres. Today, RFT tyres are increasingly being fitted to cars, and are being held as the next step forward in car safety.
The RFT capability is immediately effective at the moment of pressure loss, keeping the vehicle under control, even at speed, and avoiding potentially fatal situations. RFT enables the driver to continue driving in comfort and safety for 80km at a speed of 80 km/ hour to the destination, vehicle workshop or Bridgestone dealer after air pressure loss. It also eliminates the need for dangerous roadside tyre changes.
RFT increases the rigidity of the tyre and its heat resistance, so that the tyre can carry the weight of the vehicle for a limited distance, even with low or zero air pressure. Bridgestone’s RFT incorporates state-of-the-art technology including:-
- Bridgestone’s new Nano ProTech™ compound, which optimises the distribution of carbon molecules to minimise friction and significantly reduce heat generated, to prevent rubber deformation
- Addition of cooling fins on the outside of the tyre, to suppress heat generation by directing cool air downwards towards the tyre’s surface
- Sidewall-reinforced rubber – allowing the tyre to carry weight at zero pressure
- Wide beads to prevent a tyre from separating from the wheel when tyre pressure is lost
- Bead fillers that combat heat built-up during run-flat driving
Shinichi: In Asia Pacific, we anticipate rapid demand growth for tyres due to high domestic demand for vehicles, increasing affluence and improved road infrastructure in the region. This is especially in high growth developing countries such as China, India, Vietnam, and Myanmar. This is one of the major opportunities for our industry. In the first quarter of 2015, the Asia Pacific region’s unit sales of tyres for passenger cars and light trucks increased firmly, while the unit sales of tyres for trucks and buses increased substantially compared to the first quarter of 2014.
For Off-The-Road (OTR) tyres, we might see an increase in growth in specific markets. An example is the allocation of coal blocks in India, which will revive and grow the distressed energy sector in India, and is expected to lead to an increase in the demand for mining trucks and OTR tyres.
We have seen that our partners and consumers appreciate the efforts that we put into tailoring our products to suit the nuances of each market. In March this year, we were honoured with the `2014 Regional Supplier Overall Outstanding Performance Award’ from Toyota Motor Asia Pacific Engineering & Manufacturing, and the award for `The Best Supplier of the Year 2014’ from PT. Toyota Motor Manufacturing Indonesia. These awards reflect our focus on this dynamic region and motivate us to achieve new heights of customer excellence.
For commercial tyres, Bridgestone has been aggressively expanding its Bandag Franchisee Retread shops in the region. Retreading is the process that replaces the tread on worn tyres by re-using the tyre casing. It uses 68 percent less petroleum resources and has smaller environmental footprint. Its operating cost is less than that of purchasing a new tyre.
This is in line with Bridgestone Group’s direction to further increase its presence in the commercial segment, through the Solution Business model – a total-solution service for truck and bus fleet owners, by providing an all-in-one service from buying, maintenance, roadside servicing, recycling to retreading of tyres, to help fleet owners reduce operating costs and downtime.
Last year in October, our Malaysia subsidiary celebrated the opening of its first Bridgestone Bandag Franchisee Retread Shop. Equipped with the state-of-the-art machinery, such as the advanced Shearography machine, the new facility will carry out production of retread tyres using Bridgestone Bandag manufacturing process. The facility promises to bring top standard high quality products to meet the growing demands of Malaysian fleet operators, while helping them reduce operating costs.
Lastly, as part of the Bridgestone Group’s plan to embrace the opportunities in this diverse and growing region, its operations in China and Asia Pacific were integrated in July 2014. The restructured business unit will enable Bridgestone to utilise more effectively the management resources, enhance governance in emerging countries, and respond swiftly to the rapid changes in the Asia Pacific market.
Q: What are the impetus for and impediments to further growth in this region?
Shinichi: The impetus would be the diversity of the region, availability of natural resources, and availability of human resources, along with the region’s commitment to support innovation.
Through our unique vertical expansion which spans the entire supply chain from upstream – that includes the development and production of raw materials utilising our own natural rubber farms – to downstream – inclusive of the establishment of sales channel network – we intend to generate even more value for our consumers through both technological and business model innovation.
The impediments are the fast-changing market conditions and consumer demands. It can be quite challenging to balance between managing the changes while maintaining our regular production flow. Social structures and consumer attitudes are expected to change even more significantly in the next decade, but we intend to take that in our stride and evolve rapidly.
In this setting, based on our corporate philosophy, Bridgestone intends to pursue its ultimate goal of becoming a ‘truly global company’ and achieving ‘Dan-Totsu (being the clear and absolute leader) in all aspects of our business’ in each industry which we compete in. We remain firmly committed to our principles and will continue implementing management reforms to attain our goal of becoming the undisputed leader in the region’s tyre industry.
Q: Tell us about your technical centre and how it supports OEMs.
Shinichi: Bridgestone Asia Pacific Technical Center Co. Ltd was officially opened in 2013 in the north of Bangkok. As business needs grew, and to strengthen its functions and better develop products that are suited to regional customers’ needs and requirements, the Asia Pacific Technical Center moved to a new and larger laboratory facility in the Pathum Thani Province in Thailand in March 2015. The larger facility is able to accommodate the installation of new machinery, such as the newly installed tyre and material testing machine.
Main functions of the Asia Pacific Technical Centre include quality management, tyre development, material development & procurement and production technology.
The centre develops tyres for the replacement market and OEMs that have development functions located within Asia Pacific. It also cooperates with the Asia Pacific region’s OE sales and technical liaisons.
In addition, it is physically closer to our customers, markets, proving grounds, and plants. This proximity will enable the Asia Pacific Technical Center to strengthen its R&D support for customer/ market-related processes and activities.
The centre currently has 90 employees from various nationalities (Indian, Indonesian, Italian, Japanese, and Thai). Based on its headcount forecast, it is expected to have approximately 100 employees by end 2015.
Q: How does Bridgestone strike a balance between sustainable production and cost competitiveness?
Shinichi: The Bridgestone Group has more than 190 production and development locations in 25 countries, business presence in more than 150 countries, and a combined workforce of around 140,000 globally. As part of our environmental philosophy of ‘To help ensure a healthy environment for current and future generations,’ Bridgestone views sustainable production and our goal of realising a sustainable society as part of our corporate DNA.
Hence, the challenge of eco-friendly production is not so much a cost concern, but is a key challenge for Bridgestone’s long-term business success.
In our Environmental Mission Statement, we have indicated three areas of environmental progress that covers all aspects of our business, from operations, products and services, to community activities. They are: In harmony with nature; Value natural resources and Reduce CO2 emissions.
For ‘In harmony with nature,’ Bridgestone needs to maintain a constant understanding of the relationship between business and biodiversity, by taking into account the impact of our business operations on the ecosystem as a whole. Initiatives include the reduction of water intake in our procurement and production processes.
For example, in China, where water shortages are a concern, we have implemented a closed (recovery) system for processing wastewater, and have enhanced the efficiency of water usage through the cyclic use of cooling water and recycling of industrial wastewater.
As a group, manuals for the design of new factories proactively address water conservation. Worldwide, we have reduced water intake by 28.3 percent per unit in 2014, as compared to 2005. Bridgestone is aiming for a 35 percent reduction of water intake by 2020.
For ‘Value natural resources,’ the Bridgestone Group aims to achieve a smaller environmental footprint in the usage of volatile organic compounds (VOC), by replacing them with alternate materials. Between 2010 and 2013, Bridgestone Corporation achieved significant reduction of approximately 63 percent in VOC from its chemical and industrial manufacturing operations.
In line with the expected increase in the global number of automobiles that will boost demand for our products, Bridgestone aims to eventually utilise 100 percent sustainable materials in our production process. To achieve this, we are reducing raw material consumption through half-weight technology (Technology used to halve the amount of raw materials used in manufacturing a tyre, while maintaining a conventional tyre’s durability and safety), Run-Flat Technology tyres, recycling resources through retreading technology and services, the development of non-pneumatic tyres, expanding the usage of renewable resources such as guayule and Russian dandelion in place of natural rubber, and to replace fossil resources with renewable resources. We also aim to achieve zero waste to landfills by 2050. As of June 2010, four of our plants in China have already attained this goal.
For ‘Reduce CO2 emissions,’ Bridgestone is actively working to reduce the rolling resistance in our products, as nearly 90 percent of a tyre’s CO2 emissions occur during the usage/ driving phase of its lifecycle. The Group’s mid-term target is to reduce tyre rolling resistance to a degree that CO2 emissions reduction exceeds the amount of CO2 emitted in all other lifecycle stages. This vision is based on our goal of reducing global greenhouse gas emissions by at least 50% by 2050.
All of Bridgestone’s production sites are certified ISO14001. In 2014, Bridgestone has successfully lowered emissions by 31.8 percent compared to 2005. This is a result of our efforts in switching fuels and recovering heat energy at plants. Going forward, Bridgestone is working to introduce more energy-efficient equipment, and to implement stringent energy management measures to realise further reductions in CO2 emissions.