Russian manufacturers of premium and mid-range tires have new opportunities for business development after the departure of Western brands from the country and numerous foreign sanctions on import<\/a> of tires.
Andrey Pantyukhov, the head of the largest Russian tire plant Ikon Tyres, talked about his company's future and the market before the start of the fall-winter season in a major interview with Kommersant. The plant, which for many years belonged to the Finnish Nokian Tyres, is now part of Tatneft's assets.
What will happen to the old models of tires
Before the Finnish manufacturer decided to leave Russia, it produced three modifications of tires for the secondary market in Vsevolozhsk. After the plant passed into Russian ownership, they are all still being produced. But lately under a different name, so that the plant can "operate its own brands".
The premium winter tires Hakkapeliitta and summer Hakka are now called Autograph, and the mid-price Nordman have been renamed to Character. All summer tires of the company also now have the name Autograph.
Technologically in the construction, recipe and forms of tires there are no changes, all the necessary data for production were fully passed on to the Russians along with the assets. But under the terms of the agreement, one of the models was modernized: now the winter Characters have studs in the core that are shaped like butterflies.
How the plant is working now
Due to sanctions in 2022, production lost two-thirds of its volume as there was nowhere to export the produced tires, and the domestic Russian market did not need such amount of rubber. And in 2023, the plant faced very large leftover winter tires from the winter season 2022.
This year, we had to adjust the volume of winter tires offered to the market to even out this situation. Therefore, we are operating at a low load - less than half of our production capacity.
By the end of the year, the plant will develop a business strategy for increasing load, including through exports, but in the short term, it is not possible to reach the previous volumes. Analysts are now deciding when, with which products, and in which markets to enter. For now, the Character tires have started to be exported - they are bought both within the Union state in Belarus and in Kazakhstan.
Ikon Tyres is also considering the prospects of creating new products. But it will take several years to develop a new type of tire from recipe and design to final tests and first sales.
Will tire prices increase
Most likely, yes. The fact is, the company has almost finished localizing production systems and applications to Russia, but cannot fully localize in terms of raw materials for production. Natural rubber does not grow in Russia, it is imported from Southeast Asia. There are also other tire components that need to be imported, which is expensive.
There's a long list of components that we use in our manufacture that either are not produced in Russia or are not of the technical level. Localization was not about replacing them with Russian ones - this is practically impossible in the short term. We did not compromise on technical characteristics and product quality. The work was about switching to supplies from already approved raw material suppliers that we have always used in our recipes, who are not limited by sanctions.
Changing suppliers has made deliveries "much longer and much more expensive" due to payment limitations and financial flows and fluctuations in the exchange rate of Russia and foreign countries where purchases are made. Similar problems for other tire manufacturers in Russia.
At the same time, Pantyukhov notes that the current exchange rate is to some extent beneficial to the Russian tire business. It helps to reduce the presence in the market of manufacturers from China.
There are now more than a hundred Chinese tire brands in the Russian market, and over the past few years they have taken leading positions in tire imports to the country in the budget segment. This creates excess production capacity in Russian plants, which cannot be directed to export due to sanctions.
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