SINGAPORE—Richard Kramer, CEO of Goodyear, described the tire industry as “a great industry to be in, both now and in the future,” during his keynote address on March 24 at the World Rubber Summit 2015.
“Many of the high-profile tech companies that got the headlines have come and gone, but the world still moves on rubber,” he said.
“Our industry is still here, and I'm confident we'll be here for the long term,” said Kramer expressing optimism over the future of the global tire industry.
The growth of the middle class, especially in developing markets, will be a key driver for industry growth, according to Kramer.
“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,” Kramer said, adding that the development translated to tire volume growth for decades to come.
Kramer said that in mature markets such as North America and Western Europe, growth was possible and driven by the changing mix to high-value-added tires.
According to the Goodyear boss, profitable segments – such as winter tires, SUV tires and light truck tires—could offer higher margins as informed consumers are willing to pay for high-value-added tires.
Stressing the need for “change” in the industry, Kramer said the newest generation of consumers, the 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,” he added.
Kramer pointed out that the sale of tires will have to be a convenient and frictionless experience for the new consumers.