Rich Kramer, Goodyear Tire & Rubber Co. chairman and CEO, delivered the keynote speech Tuesday at the World Rubber Summit 2015 in Singapore, calling the tire industry “a great industry to be in, both now and in the future.”
Kramer told attendees 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.”
Kramer discussed 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,” he said, adding, “Value for all of us is ultimately created in the marketplace, by consumers and end-users of our products. We can never forget that.”
The growth of the middle class, especially in developing markets, will be a key driver for industry growth, according to Kramer, who said, “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 to tire volume growth for decades to come.”
Kramer added he also sees growth opportunities in mature markets, such as North America and Western Europe, where “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.”
He also discussed how the newest generation of consumers – 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.
“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,” Kramer added.
