Management of product safety and product liability

As a tyre manufacturer, we are responsible for the safety of our products. Product liability, therefore, comprises a significant part of our corporate social responsibility. We are committed to continuous improvement, with the aim of developing and manufacturing the safest, highest-quality and most eco-friendly tyres in the world. Our product development is guided by the principle of sustainability: the safe characteristics of a tyre must remain virtually unchanged throughout the life cycle of the product.

As a tyre manufacturer, we must ensure that the tyres that we develop, produce and market are verifiably safe to use and that they meet the quality requirements and the expectations of our customers and end users. It is also important to educate people on how to correctly use and store our products.

Product liability is connected with everything that we do. The responsibility for the safety, quality and compliance of a product extends to research and development, testing, production, procurement and purchasing, all the stages of the supply chain and the marketing and communication activities.

Our product liability management and product development are guided by our quality and sustainability principles and test policy as well as our ethical guidelines. We also comply with several requirements concerning noise, studs, chemicals, testing and tyre markings, for example. Learn more about this topic under Sustainability management.

Procedure in case of a fault

We employ a quality management system for tracking our products over their entire life cycle and ensuring that all lots that are cleared for sale comply with the applicable decrees and regulations. We systematically track product quality and swiftly take any necessary actions for ensuring safety.

We immediately take off the market any tyres that do not meet the quality requirements and might pose a risk in the traffic or cause severe harm to end consumers. Depending on the severity of the case, we may recall the products from the wholesale or retail level or, additionally, from end consumers. We immediately report all such events to the authorities in all countries where the affected tyres are being sold. 

Our systems enable us to initiate a tyre recall process and communicate quickly and accurately. The procedure for taking tyres off the market is specified in our quality instructions and internal instructions, which cover both customer complaints and dangers caused to customers. The essential instructions apply to handling customer complaints, limitation of sale and recalling a sales batch. They also cover country-specific instructions, such as the reporting required by the NHTSA in the United States. Our group’s personnel should report any quality deviations that they become aware of. 

Our group has not had any major product recalls in more than 16 years. Furthermore, our company has not been involved in any legal proceedings regarding product liability.

Key measures in 2016

Our pioneering role and desire to make a difference are reflected in our product range. Every product that we launched in 2016 has some innovation that improves safety. We set the targets for safety features, such as wet and ice grip, already at the concept stage.

In 2016, we expanded our product range with new sizes and products, such as the Nokian zLine A/S, Nokian Rockproof, Nokian WR A4 and Nokian Hakka Blue 2, so that even more of the modern car models can have premium winter tyres in the Nordic countries, Central Europe, North America and Russia.

More transparent testing practices

We carefully design and test all of our products in order to ensure their high quality and compliance with regulations. We use up to 300 different tyre tests in our product development stage. Before a finished product enters the market, it has to comply with several national and international standards and pass tests by independent parties. Comprehensive testing amounted to roughly half of our product development costs in 2016.

In 2015, our internal auditing discovered issues with some of our magazine testing practices. Even though we had already supplied tyres for many tests directly from our stock and the largest magazine testers had purchased the tyres that they test from retailers, we wanted to rectify our practices. For consumers in the market for new tyres, the comparison tests in motoring magazines are a visible part of tyre testing. We, therefore, wanted to focus public attention to the transparency and reliability of magazine testing throughout the industry.

Transparency and responsibility lay the best foundation for developing our company further. We have changed our practices and will not supply tyres that are not intended for commercial use for magazine tests.

Our announcement stirred up public discussion. We can only rebuild our reputation by doing the right things in a transparent way and by making the safest tyres in the world.

In order to improve transparency throughout the industry, we proposed consistent rules for testing practices to the ETRMA, the European Tyre and Rubber Manufacturers’ Association. Even though our proposal was not accepted at this time, we decided to apply these rules to our own business. Through our own example, we want to improve the reliability of testing and the entire industry. Read more about our product testing under Innovation improves safety and product liability. Read also our test tyre policy!

Goal-oriented work

We improve the safety of our products through continuous product development and testing. We invest in our innovation process because we not only want to improve road safety but also maintain our position as a manufacturer of premium tyres and technical pioneer.

We also work continuously for better eco-friendliness through lowering our tyres’ rolling resistance. Our objective is that each new product generation will have a lower rolling resistance compared to the previous one.

We have a continuous strategic goal that product models launched no earlier than two years ago account for some 30% of our tyre sales over a year. By refreshing our product ranges each year, we ensure that we offer tyres that match the special needs of each market.

Product liability organisation

The responsibility for product safety and quality covers our entire supply chain and process. As a pioneer, we want to ensure that the products that we market are safe to use and of high quality.

Product development and testing form a very significant part of Nokian Tyres’ business. The Vice President of Research and Development is a member of the company’s management team and reports directly to the President and CEO. The organisation comprises three key functions and their support departments:

  • Materials development focuses on tyres and retreading materials. New raw materials and innovations are created through research projects, often in collaboration with raw material suppliers.
  • Structural design focuses on the different tyre components that affect, among others, handling, tyre noise and rolling resistance. Reducing rolling resistance is one of the key goals in our product development.
  • Tread model design creates the tread models for new tyres. The tread model affects the tyre’s aquaplaning properties, grip and handling, for example.

These three functions are supported by the Testing department and Tyre technology department, among others.

  • Testing department first tests the speed durability, wear durability and rolling resistance of tyres in laboratory conditions. Only the best tyres pass through to track testing under actual conditions. Our test drivers test the selected tyres several times over in order to obtain as much information as possible about their performance. Tyre technology department tests new ideas for tyres, provides feedback to the product development departments and takes new products to production.

The work related to product liability is carried out by cross-organisational workgroups, which enable us to ensure extensive competence at the development stage and during commercial production.   

From raw materials to premium tyres

Raw materials’ long and complex journey to becoming finished premium tyres involves the effort and quality assurance by thousands of professionals. It is, therefore, justified to say that all of our personnel are linked to product liability.

The basis for the quality of tyres is built during research and product development. At the product development stages, we specify the manufacturing methods and equipment as well as the requirements for the raw materials and the finished product. An essential part of product development is designing the industrial production. It involves ensuring that the manufacturing methods function in a repeatable manner on an industrial scale and that each production batch complies with the product specification. Product development ensures the continuum of innovative, safe and eco-friendly product generations.

All raw materials that we use in production go through our approval process. In order to ensure the high quality of our tyres, we carry out process control operations during production. Each tyre passes through the production quality control. It includes the tyre’s force variation, ETP and run-out measurement and visual inspection. When we release a new product for dispatch, we use our internal quality requirements that are in some ways stricter than the authorities’ requirements, for ensuring compliance.

The following graph briefly describes the process for ensuring product liability at all stages, from raw materials to a finished tyre fitted on a car.

Tracking product liability

The basic principles of quality in our supply chain are compliance with the best practices by UNECE and EU, process efficiency and functionality, safety and consistency of products and delivery reliability. Our research and development functions follow the legislation that guides our industry, the regulations and instructions by the authorities and the principles described in our ethical guidelines.

We are responsible for the quality and safety of the tyres that we produce. Our operations are supervised by the authorities in various countries. Everything that we do is guided by the legal and regulatory requirements whose primary purpose is to ensure road safety.

Safety is connected to understanding and managing the risks related to tyres. We track the safety of our tyres throughout the product life cycle, from the first development to discontinuing the product. The assessments and functions are carried out by qualified and trained experts. Our business is based on our procedures in line with our quality management system and the requirements by the authorities. We agree with the authorities on any measures that we take.

We use the following indicators for tracking product safety:

  • G4-DMA Disclosure of the Management approach
  • G4-EN27 Extent of impact mitigation of environmental impacts of products and services
  • G4-PR1 Product and service categories for which health and safety impacts are assessed for improvement

Our product development is also guided by the following policies, procedures and regulations:

Tyre/vehicle safety (e.g. Uniform, Stud Decree and noise)

  • UN/ECE E regulations 30, 54, 106, 109 and 117
  • EC/661/2009; General Safety Regulation
  • ƒ TP TC 018/2011; Technical regulation on the safety of wheeled vehicles
  • Decree 408/2003 as amended by Decree 466/2009; Stud Decree
  • U.S. DOT NHTSA Standards 571.119, 571.139, 575.104
  • CC Chinese Compulsory Certification
  • GSO Standards 50, 51, 52, 1783, 1784

Tyre labels

  • EC/1222/2009; European Tyre Labelling Regulation
  • GSO Tyre Labelling Regulation
  • SASO 2857-2015; Tyre Labelling

Chemicals Decree

  • EC/1907/2006; REACH Directive

Product testing

  • ISO 17025 accreditation
  • Agreement on production consistency with EU Directive 2007/46/EC and the UN/ECE 1958 Agreement

Customer satisfaction drives our development efforts

We track customer satisfaction through customer surveys, market knowledge and sales statistics. Their trends provide us with information on customer satisfaction in relation to the competitive situation. We also utilise industry reports by independent research organisations. Our customer and market segment surveys provide guidelines for setting strategic goals and developing our operations.

Audits ensure the quality of operations

In connection with the permit procedure, regulatory authorities have verified that our company has the necessary prerequisites for conducting business and that the tyres we put on the market meet the applicable requirements. The regulatory authorities on tyres (in Finland, the Finnish Transport Safety Agency (Trafi)) and the regulatory authorities on methods and equipment (in Finland, FINAS and MIKES) carry out periodic inspections in order to supervise and evaluate our quality and safety assurance activities. Furthermore, we use internal control for ensuring the high quality and compliance of our operations. We systematically conduct internal audits and management reviews and continuously improve our operations.

Our ability to comply with the regulations and take care of our contractual obligations is also evaluated each year by our customers and partners. Their own audits verify whether our tyre manufacturing processes and R&D functions are appropriate.

Similarly, we supervise our subcontractors’, suppliers’ and partners’ quality and compliance. In addition to assessments based on written surveys, we carry out our own audit visits in order to ensure that the other parties involved in the production and development of the tyre components also meet the prerequisites and obligations set in partner agreements. We follow up on and supervise the implementation of any necessary corrective actions.

This page is included in KPMG’s assurance scope. Assurance report can be found here.