Birthing global technical regulations for tires is a difficult process, but the results will benefit all stakeholders, according to Pirelli Tire North America Inc.´s top executive.
"The harmonization of national and regional standards is the single greatest challenge to the tire industry´s globalization," said Hugh D. Pace, chairman and CEO of Italian tire maker Pirelli & C. S.p.A.´s Rome, Ga.-based operations, in his keynote address Oct. 14 at the ACS Rubber Division meeting in Louisville.
Globalization in the tire industry means making a high-tech consumer product that is in demand throughout the world. Because of the consistency of standardization, a tire could be made anywhere and sold anywhere, and the industry would benefit from large economy of scale, Pace said.
So is the industry making progress in harmonizing tire technical standards? "I would say, ´sort of,´ " Pace said.
It just isn´t easy to make that "world tire" because standards are so varied around the globe, the executive said. The U.S. and European Community have had regulations in place for years, he said, but in many developing areas regulations are country- or region-specific, with individual technical requirements.
"Compliance with this potpourri of additional regulations requires specific design certification," among other difficulties, he said. That´s one reason tire makers that sell their products around the globe have thousands of stock-keeping units.
And it´s not just the emerging nations of the world that have their own standards. The U.S. has had several motor vehicle safety standards since 1966, which covered tires, too. Uniform Tire Quality Grading made specific requirements for all tires sold in this country, Pace said, and the Transportation Recall Enhancement, Accountability and Documentation Act required more-severe tire testing.
"This is a good example of a country-specific regulation-in this case the U.S.-causing some companies to develop a new global product in order to stay in compliance with multiple worldwide regulations."
Pace said the Rubber Manufacturers Association estimates its member companies had to spend as much as $1 billion to comply with the TREAD Act. And if a foreign tire maker wants to import tires to the U.S., it, too, must meet the regulations.
As another example of the problems tire makers face, Pace pointed to the banning of aromatic oils in tires by the EC, a requirement for all tires entering the European nations as of Jan. 1, 2010.
Aromatic oils long have been used to improve processing of compounds and tire performance, and are being outlawed for health reasons. Pace said many regions have no such ban on the oils, but tires are being redeveloped throughout the world to comply with the European standard.
"There always will be some specialized products for certain regions due to certain market conditions and consumer preferences," the executive said. "Take the example of ice tires in Japan, of high-mileage tires in the U.S."
But product changes caused by regional differences in regulations don´t fit in with the goal of making tires for a global market, he said.
However, today there is an "emerging proposal for global harmonization right from the get-go," Pace said. For example, North America and the EC are developing rolling resistance regulations in parallel.
"We are fully supporting harmonization test technology-well developed, easily repeated and affordable for all the players," he said.
Pace listed some of the benefits of the development of global technical regulations for tires: consumers get better availability of standard, certified tires; OE customers enjoy reduced delays in gaining approval for shifting tires from one nation or region to another; legislators are able to promote consistent and globally agreed-upon product safety standards. Additionally, manufacturers improve production and logistic efficiency and reduce costs.
"Today there is no question consumers around the world want the same globally standardized products that are advanced, functional and reliable. This is certainly the case for tires," he said. "A full degree of harmonization will help consumers and industry alike."