Management of product advancements, product safety and product liability

3 - Good health and well-being12 - Responsible consumption and production13 - Climate action

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 as well as the expectations of our customers and end users. Our product development is guided by the principle of sustainable safety: the safe characteristics of a tyre must remain virtually unchanged throughout the tyre’s life cycle.

We are committed to continuous improvement: our goal is to develop and manufacture the safest, highest-quality and most eco-friendly tyres in the world. In practice, this means that the new products that we launch always have better properties than the previous models, and we have developed advanced solutions for our products, for instance in terms of rolling resistance (fuel consumption, CO2 emissions) or soil compaction in agriculture and forestry.

We ensure the technical quality of our products by testing and studying each raw material used in tyre manufacture and by continuously improving our rubber compounds. Moreover, we are actively looking for and testing renewable raw materials.

Product responsibility is connected with everything that we do, including product safety, quality and compliance. Responsibility covers our processes from research and product development to testing, production and procurement & purchasing as well as all the stages and functions of our supply chain. Our product responsibility also includes product marketing and communication to consumers.

Management of product advancements, product safety and product liability covers the following material topics:

  • Product safety
  • Rolling resistance of tyres
  • Developing innovative and eco-friendlier products

For more information about the effects of the topics on the Nokian Tyres value chain and their scope, see the materiality analysis.

Management of product advancements, product safety and product liability is guided by the following principles, operating models and policies:

  • Our leadership and product development are guided by our ethical guidelines, the Environmental, Safety and Quality Policy and testing policies. We also comply with several requirements concerning noise, studs, chemicals, testing and tyre markings, among other things. Learn more about this topic under Sustainability management.
  • The basic principles of quality in our supply chain are following best practices based on the UNECE and EU regulations, efficiency and functionality of processes, safety and consistency of products as well as delivery reliability. Our research and development functions comply with the legislation that guides our industry, regulations and instructions by the authorities and the principles described in our ethical guidelines. Our activities 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.
  • Our activities in various functions are directed by work instructions and operating models, which apply to processes and work stages as well as individual tasks. Individual employees, supervisors, unit managers and top management are all responsible for our activities. We revise our instructions, as necessary.
  • Product responsibility is connected to unit-specific and personal performance targets. Unit-specific targets are tracked in real time, whereas personal targets are discussed annually during People Reviews.

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

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

  • UN/ECE E regulations 30, 54, 106, 109 and 117
  • EC/661/2009; General Safety Regulation
  • 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
  • CCC 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

Product development organisation

As of the beginning of 2018, we moved the product management and product development functions under the new Products and Technologies unit, whose aim is to drive growth by offering competitive products in all of our key markets. The unit facilitates closer collaboration between the functions and brings the innovations and product development closer to consumers. In the future, our tyre product development will be able to respond to specific local requirements even better. Our aim is to ensure our position as an innovation leader in terms of both products and solutions. The head of the unit is a member of the company’s management team and reports directly to the President & CEO.

The product development organisation comprises three key functions and their support departments: 

  • Materials development focuses on tyres and retreading materials. New raw materials and innovations are developed 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 our key goals in 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. 

  • The testing department first tests the high-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 gain as much information as possible about their performance.
  • The 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 responsibility is also carried out by cross-organisational working groups, which enable us to ensure extensive competence at the development of a tyre as well as during commercial production. 

Key measures in 2017

Our product range reflects renewed characteristics and advancements. Every product that we launched in 2017 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 2017, we introduced the Nokian Hakkapeliitta 9 and Nokian Hakkapeliitta 9 SUV winter tyres with new double stud design. According to tests, the tyres’ all ice grip and winter grip properties have improved compared to our previous products. For the summer season, we released the Nokian Hakka Blue 2 and Hakka Black 2 SUV summer tyres, which complement the comprehensive Hakka summer tyre range. The new tyres deliver a balanced and precise road contact thanks to their new generation tread pattern, multi-layered structure and rubber compound that ensures grip under varying conditions.

We also published our plans to support the local university’s pilot project in connection with our upcoming Spanish testing centre. The project is among the first in Europe to study growing guayule, which is intended as a replacement for natural rubber.

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 under all conditions.

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

In 2015, we set a goal for 2020 to reduce the rolling resistance of our product range by 7% compared to the 2013 baseline, thereby creating a decrease of 500 million kg in CO2 emissions from traffic. We reached this goal clearly ahead of schedule. The proportion of tyres that reduce fuel consumption through ultra-low rolling resistance was nearly 90% in 2017 (87% in 2016), which translates to an annual decrease of approximately 100 million kg in CO2 emissions.

We have a continuous strategic goal that product models launched no earlier than two years ago account for approximately 30% of our yearly tyre sales. By refreshing our product ranges regularly, we ensure that we offer tyres that meet the individual needs of each market.

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 tyre lots that are cleared for sale comply with the applicable decrees and regulations. We systematically track product quality and our quality assurance results and swiftly take the necessary measures for ensuring safety.

Our group has not had any major product recalls in more than 17 years. Furthermore, Nokian Tyres has not been involved in any legal proceedings regarding product liability.

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. We have the capability to recall the products from the wholesale and retail level or, in addition, from end consumers and to immediately report all such events to the authorities in all countries where the affected tyres are being sold. Our instructions also cover country-specific guidelines, such as the reporting required by the NHTSA in the United States. All group personnel are instructed to report any quality deviations that they become aware of. 

We follow the EU product safety database, which records recall events in the industry. The data helps us anticipate the likelihood of similar risks in our own processes.

Tracking responsibility – From raw materials to premium tyres

The long and complex journey from raw materials to finished premium tyres involves the effort and quality assurance of thousands of professionals. It is, therefore, justified to say that all of our personnel are linked to product responsibility, which starts from raw material purchasing.

The work of our procurement department is guided by the internal purchasing policy, which provides an overview of sustainable procurement. Based on our ethical guidelines, we have prepared the Supplier Code of Conduct. Among other things, the document addresses working conditions, human rights and environmental protection. Suppliers of natural rubber are a special target group of our procurement. Read more about our procurement.

All raw materials that we use in production go through an approval process. We also use process controls during production for ensuring the quality of tyres. Each finished tyre passes through the production quality control, which includes the tyre’s force variation, out-of-round and run-on measurement as well as 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.

Safety is connected to understanding and managing the risks related to tyres. We track the safety of our tyres throughout the product life cycle. During product development, our tyres go through wear and performance testing, for example. We wear tyres completely out in order to understand their wear and any changes in characteristics.

The assessments and measures are carried out by specialised and trained experts. Our activities are 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.

Our product responsibility continues until the tyres are recycled for material. If tyres are not appropriately recycled, they will end up in the environment or pile up in garages.

In Europe, tyre manufacturers have arranged for tyre recycling as a joint effort. In Finland, nearly 100% of all tyres are recycled, whereas in Europe the figure is approximately 95%. In Russia, the recycling rate of tyres has been quite low. We have actively participated in the discussions for driving recycling. The discussions led to the completion of relevant legislation in 2015: The target for 2016 was to recycle at least 15% of the sales volume in Russia and, in 2017, 20% of the sales volume. Together with other large manufacturers, Nokian Tyres has established a recycling association in Russia for tyre companies. In 2017, a tyre recycling system was put to use for the collection and utilisation of end-of-life tyres. One future challenge is the lack of tyre recycling stations in Russia.

Audits ensure the quality of operations

Our company’s operations are annually audited by our customers, car manufacturers and the parties behind various standards. In connection with the permit procedure, regulatory authorities have verified that we have the necessary prerequisites for conducting business and that the tyres we put on the market meet the applicable requirements.

The national regulatory authorities on tyres and authorities regulating methods and equipment carry out periodic inspections in order to supervise and evaluate Nokian Tyres’ research and work on ensuring the quality and safety of our tyres. Furthermore, we use internal controls for ensuring the high quality and compliance of our operations. We systematically conduct internal audits and management reviews and continuously improve our procedures.

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.

In 2017, FINAS (Finnish Accreditation Service) conducted accreditation audits to Nokian Tyres’ test laboratories. The annual audit ensures that we can conduct part of the regulatory testing based on which the relevant national authority issues type approvals. Part of regulatory testing is ordered from external, accredited laboratories. In the past year, we also carried out audits at our factories, for instance in connection with our quality and environmental management system and the Chinese export permit.

Our internal audits focused on product safety. This was done in preparation for the new version of the automotive industry’s IATF 16 949 quality management system, which includes product safety. The internal audits reviewed the entire manufacturing process and identified the risks and the required measures. The possibility of materials mixing up was identified as the most significant risk to product quality. To address this, we implemented a system that prevents the possibility of human error in choices of materials. We also created a new product safety procedure that covers manufacturing in both of our factories. In the future, our factories will have appointed people responsible for product safety.

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

Customer satisfaction drives our development

We track customer satisfaction through customer surveys, market insight 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. Read more about the development of customer satisfaction.

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