First-rate products for

demanding conditions

Nokian Tyres’ key products for passenger cars are studded and non-studded winter tyres, SUV tyres and high-performance summer tyres, which are also the fastest growing product segments in the tyre business.  The company’s main market areas are Russia, the CIS countries and the Nordic countries. Other important markets are Eastern Europe, the Alpine region and North America. Winter tyres generate more than 80% of the company’s net sales.

The company manufactures its key products at its plants in Nokia, Finland, and Vsevolozhsk, Russia. It has also set up off-take contract manufacturing in Indonesia, China and in the USA. Approximately 20% of product sales in the Nordic countries and Russia takes place through the company’s own Vianor chain.

The product range is renewed frequently. The guiding concepts in product development are the principle of sustainable safety and product innovations that promote safety and environmental friendliness. The Nokian brand has achieved wide recognition and market leadership in its main markets.

Focus on seasonal management 

The passenger car tyre business is clearly seasonal in the Nordic countries, Russia and the CIS countries. This sets major challenges on production and delivery capacity, underlining the key part played by an extensive distribution network, own tyre chain and efficient logistics and IT systems. Presales to distributors ensure product availability and enable retailers to successfully manage their business during the busy consumer season. Stocking up for the season means that the stock levels of both Nokian Tyres and tyre dealers, as well as the receivables from distributors, are at their highest just before the peak season and begin to normalise once consumer sales get started.

Increasingly active in Russia

In 2007 Russia’s share of the Group’s net sales rose to 31%. The company wants to further strengthen its market leadership in premium-segment winter tyres and increase its market share in summer tyres. Total sales in the Russian tyre market in 2007 amounted to some 40 million passenger car tyres, roughly half of which were winter tyres. The market is growing at an annual rate of some 10%.

The biggest manufacturer of premium tyres in Russia, Nokian Tyres also wants to strengthen its position as a local tyre manufacturer through its plant in Vsevolozhsk, which came on line in the spring of 2005. The plant
makes Nokian-branded, premium- segment summer and winter tyres, approximately two thirds of which are sold in Russia. The goal is to gradually raise the plant’s capacity through additional investments to some 10 million tyres by 2011.

Growing markets in other CIS countries

To make the most out of the countries’ growth potential, Nokian Tyres set up its own sales companies in Ukraine and Kazakhstan in 2006. In 2007 the Vianor chain also expanded operations in both countries. In 2007 the company signed a cooperation agreement with Ordabasy Corporation JSC, a Kazakhstan company active in various fields. The companies agreed to establish a joint venture called Ordabasy-Nokian Tyres JSC and to construct a plant for the manufacture of passenger car tyres in Kazakhstan. The products will be sold in Kazakhstan, as well as on the Central Asian, Russian and Eastern European markets. The plant is scheduled to come on line in 2009.

Nordic countries form a strong pillar

Roughly 40% of Nokian Tyres’ net sales is still generated in Finland, Sweden and Norway. Taking all products into account, the company is a market leader in Finland, and a top contender in Sweden and Norway. Annual passenger car tyre sales in Finland, Sweden and Norway total some 9 million tyres and roughly 5 million of those are winter tyres. The markets are growing at an average annual rate of 1–3%.

Tailored products for other markets

Outside Russia, the CIS countries and the Nordic countries, Nokian Tyres is focusing on markets in which it can use its special competence in northern conditions. These include Eastern Europe, the Alpine region and North America. The tyre markets are growing strongly, especially in Eastern Europe.

The company’s friction tyres and summer tyres designed for Central and Eastern European winter conditions differ considerably from the products sold in the company’s key markets. The all-weatherplus tyre, developed with the US market in mind, is designed for year-round use with special emphasis on winter tyre properties.

Nokian Tyres estimates that worldwide passenger car sales total some 1,1 billion tyres a year, and the value of tyre markets is around USD 112.5 billion. Original equipment installations account for some 28%. The markets are growing at an annual rate of 2–4%. The strongest growth is registered in winter tyres, high-speed summer tyres and SUV tyres.

Read more from Nokian Tyres' Annual Report 2007