The newly-launched Hakkapeliitta 01 is both a special and specialist tyre. Special because it is something new and even pioneering. Specialist because it represents the most severe winter-facing subset of the passenger car tyre market. And yet, Nokian’s emphasis on pioneering and specialism is emblematic of the company’s wider strategic philosophy. With that in mind, Tyres & Accessories took time out with Nokian Tyres CEO Paolo Pompei on the sidelines of the Hakkapeliitta 01 launch event at the Finnish tyre manufacturer’s “White Hell” winter tyre testing centre in Ivalo. While it began with the latest technology launch, our conversation also considered the changing face of tyre retail, the business’s recent return to historic performance levels and more broadly and – since we were a relative stone’s throw from the Russian border – raised the question: how is Nokian Tyres performing in its post-Russian chapter?
First off, special tyres and Nokian’s specialisation strategy. The Hakkapeliitta 01 is pioneering tyre within a specialist studded tyre sub-segment of the winter tyre sector. How much does specialism reflect the broader Nokian Tyres strategy?
“I think it’s well reflected in the strategy of Nokian. We had recently our capital markets day [and] made it clear that the company is progressing on the basis of what made the company strong in the last 100 years. We are a winter tyre company. More than 50 per cent of our revenues are made with winter tyres. It was really important for us to carry on this innovation journey…In fact, we’re…delivering innovation that didn’t exist before…We spend more than 3 per cent of revenues in R&D and of course the majority of these investments are really in the segment where we can make the difference”, Pompei explained, clarifying that – as well as all kinds of winter tyres, Nokian specialises in all-season and all-weather tyres on-road; and key agricultural and OTR products off-road.
We don’t have to play every game
Nokian Tyres has publicly referred to a goal of 1.5 billion euros more revenue over the next few years. So, the question is: where is that coming from?
“If you look at our development plan, we are releasing a lot of new products. Of course, it’s not only the Hakkapeliitta 01, last year we released a new product for the Central European market for the all-season segment, also for North America. You will see that out of these 1.5 billion euros of cumulative sales that we are going to generate with new products, in the passenger car tyre sector, 90 per cent is really coming from winter tyres, all-season and all-weather tyres. And it’s really reflecting our focus in those segments where we want [to be].
“In the winter tyre business, we want to maintain our leadership globally. And in the all-season and all weather, of course, we want to reinforce our leadership, making sure that we are growing above the market level. It’s part of our strategy. We don’t want to play everywhere. We don’t have the ambition and the capabilities to play everywhere. But of course, we have the strong ambition to be market leader in the segment where we have specific know-how and expertise.”
Nokian Tyres executives have stated that the new Hakkapeliitta 01 dynamic studded winter tyres will be produced in Finland. Is the new Romania plant now at the capacity you want it to be at and is it providing the share of overall production that you want?
“The Romania factory today is providing 6 million tyres [a year] which can be extended by up to three times….at this stage we are working on phase one which is a… saturating 6 million tyres capacity and it’s helping obviously in particular in the all-season segment and also a bit of summer but in the all-season segment, it is helping a lot to reinforce our position there. Winter tyres, studded winter tyres, will be produced in Finland while winter tyres for the central European market are being produced in Romania already. Obviously we have dedicated factories for dedicated markets, so Romania will perfectly fit with the Central South European market with all the products, winter, all season, as well as summer tyres.”
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