There are regulations in Europe in terms of tire labeling, which has also influenced Chinese tire makers. Developers are working on what they call “green” tires that are fuel-efficient. For example, three or four years ago, Chinese tires could not be retreaded, but now they are more environmentally friendly. The change in the quality of the tires is measurable, which is important for us. The tire market has changed dramatically over the last few years, as the four big tire companies in Colombia—Goodyear, Michelin, Bridgestone, and Pirelli—are assuming different roles and taking on different market shares. The introduction of Chinese tires in the market has changed the picture. Companies are beginning to rethink their business and how to address the challenges. In Colombia and in Latin America, the big tire companies are going through a very tough period. If they do not change their way of thinking, they will have even more problems in the near future. These companies have to choose whether they are going to fight the low-price tires or focus on the high-end premium market. Previously, companies were accustomed to fighting across the whole chain, but now they have to adapt and specialize in high-quality premium tires. The market has shrunk significantly for the bigger brands in the face of Chinese competition.
José Miguel Carreira López
General Manager, AutoMundial
Managing Director, Bridgestone
From 1999 to 2003, Bridgestone followed a traditional strategy. In 2003, it decided that operations in Colombia needed to report to another operation, because at that time there were many security problems in the country. Bridgestone decided that the local operations would report directly to Venezuela. After 2010, when the violence declined, we had very good business in Colombia that was starting to grow. At that time, Venezuela had issues, and we removed Bridgestone Colombia from Venezuela's oversight, and now Ecuador reports to the Colombia office. My challenge was to disconnect Bridgestone Colombia from Venezuela and make it into a new subsidiary of Bridgestone America. Today, Colombia is the youngest subsidiary in the world. When people buy tires, they don't make an investment. Nobody buys tires for their value; they buy them for price. However, car performance rests on tires. It is a very important product and people should care about it. We are working on brand building and brand value, which is very important because we are Bridgestone, the number one company in the world for tires. We are not number one in Colombia, and there is a long way to go to gain a bigger market share. We will not be at number one in the short term, but we aim to be the best in Colombia. This is our focus.
Eduardo Ocione Nogueira
Administrative & Financial Director, Pirelli
Asian imports have established a strong presence in Colombia. Five years ago, premium brands, such as Pirelli, Goodyear, Michelin, and Bridgestone, represented 60% to 70% of the market. Today, this has been inverted. Asian brands hold the majority market share, and the remaining 30% is premium brands. Premium brands differ in several aspects including warranty, technology, cost structure, and development, which make the products distinctive. We have effectively implemented our global strategy to develop sales in high-performance tires with greater value-added and performance. These range from tires of 15 and 17 inches all the way up to SUV tires (18, 20, and 22 inches). The market is not very established yet, but it has been growing a lot and it is where Pirelli wants to be. However, truck and radial tires, which have been very successful in Colombia, are the main focuses.