Gaining Traction. Return of Russia's Tyre Industry

The former Bridgestone plant, one of the most modern tyre manufacturing plants in Russia, has been relaunched in the Ulyanovsk Region. It has become part of the Russian tyre holding Cordiant. The facility will produce both mass-market tires under the Cordiant brand and the premium Gislaved range. So what are the new plant's prospects and what are the trends in the Russian tyre market.

The Bridgestone plant, launched in 2016 near Ulyanovsk, was the last foreign tyre manufacturing facility to appear in Russian. Investments into the development of the plant amounted to approximately 12.5 billion rubles.( around $200 million) However, following the imposition of sanctions against Russia, the Japanese owners  decided to leave and the plant was closed in March 2022. Until the end of 2023, it remained under the ownership of the Japanese company, and subsequently acquired by the Cordiant holding, and being renamed Gislaved.

As the Governor of the Ulyanovsk Region, Aleksey Russkikh, noted at the plant's opening ceremony, after the departure of the foreign manufacturer, the enterprise was idle for more than two years.
"We were successful in retaining the vast majority of the plant's personnel, and social payments were consistently maintained throughout this period. Now the enterprise is being restarted by a domestic investor, who has done a lot of work. This is the last plant in the region to have been restarted following the departure of foreign investors," the head of the Ulyanovsk region emphasised.
According to Alexey Mordashov, CEO of ZAO Severgroup (which owns the Cordiant holding), the Ulyanovsk plant was launched in test mode at the end of last year. This allowed for the preliminary testing of production processes before the commencement of full operations.
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"The products of the plant will undergo a number of changes , as we are working on expanding the range of tyres produced. This is one of the most modern plants in the World. The enterprise is capable of making premium quality tyres: we will occupy the premium tyre segment, which is in short supply on the market," said Alexey Mordashov.

The head of Severgroup also shared the production plans of the Ulyanovsk Gislaved plant. By the end of this year, the enterprise plans to produce about 1.2 million tyres. The following year, the plant is expected to reach full capacity of 2.4 million tyres per year.
The Gislaved plant in Ulyanovsk is already producing the Cordiant Run Tour summer tyre, as well as the Cordiant Snow Max 7000 a winter studded tyre, according to Vadim Volodin, CEO of JSC Cordiant.
I would like to explain that in Russia you have two different sets of wheels not just tyres, one set is used from late spring at the end of the snows and frosts to the early autumn.Then you change to the winter tyres that are studded and ideal from driving in snow and ice. You change the whole set of wheels with the tyres on and then put the others into storage until the autumn of spring.  

He also announced that the enterprise will begin production of a third tyre model, the Gislaved Spike Control, in the very near future. In addition, plans are in place to launch production of two more models of summer tires under the Gislaved brand during the year.
Vadim Volodin also highlighted that approximately 50% of the compounds used by Cordiant to produce tyres are domestically produced. He emphasised that the process of  theimport substitution of raw materials and compounds of future tires is actively underway.
The approval process for a particular compounds in the rubber compound or tyre body is a time-consuming procedure. It takes up to one and a half years from the initial assessment of the quality of a new type of raw material to the manufacturing and testing of prototypes of the finished products. At the same time, not all compounds can be replaced. For instance, Russia does not produce natural rubber, a key component in tyre manufacturing, due to the fact that it does not naturally occur in the country.
A similar situation exists with certain types of "chemicals" that are part of the rubber mixture. He added that only a few companies worldwide are engaged in the production of these additives.
At present, the production of tiyes ranging from 13 to 18 inches in diameter is focused on in Ulyanovsk. At the same time, Vadim Volodin has noted that demand for tyres of larger diameters is also growing proportionally, following the increase in the number of crossovers in the vehicle fleet.

In response to this trend, we are committed to meeting the evolving market demands. Over the year, the share of tuires of 17 inches in diameter and above in the total production volumes increased from 9 to 11%. We intend to increase the production of such tires," said the general director of JSC Cordiant.
By the end of the year, the company plans to expand the range of sizes of passenger car tyres offered up to 22-inch tyres, he added.

The head of Cordiant also revealed that the company has developed tires for the domestic luxury car brand Aurus. These tyres are currently undergoing testing.

The Gislaved brand tyres for Aurus cars are already undergoing rigorous testing. This represents a significant challenge for us. The car manufacturer is interested in a second supplier, as emphasised by Vadim Volodin.
Last year, sales of new passenger car tyires in Russia increased by 23%. Cordiant holds a 13% market share and expects to increase it to 14-15% this year. At the same time, he believes that existing passenger car tyre production capacities in Russia are excessive. Initially, most tye companies were export-oriented — in some cases, more than half of the products of some plants were supplied abroad. However, the changed geopolitical situation has made supplies to Europe and the USA problematic. As a result, the company is exploring new sales markets, said the general director of JSC Cordiant. He mentioned South Africa, Algeria, Egypt and some other countries as potential markets.
 There are literally thousands of Chinese manufacturers. Often, these brands are not well-known. This poses a challenge in terms of replacement, as it can be difficult, if not impossible, to source the correct tyre.
Consequently, domestic tire buyers enjoy a distinct advantage. Russian brands have a strong presence in all regions of the country, making it easy to find replacements, according to the head of Cordiant.
Maxim Kadakov, editor-in-chief of the magazine "Za Rulem", shares this view, noting the challenges involved in identifying the correct model of Chinese tire, particularly from less renowned brands or those not readily available in popular sizes. However, he notes that this challenge is not exclusive to Chinese tires, but is also relevant to other brands.

He cited examples of similar issues affecting renowned European and Japanese tyre brands. Following the termination of official deliveries to our country, replacing one or two wheels can often be challenging. Furthermore, the larger and less common the wheel size, the more challenging it becomes to source the required tyre. In some cases, the cost of replacing a single wheel can equal the price of a full set of wheels from a Russian brand. Maxim Kadakov informed Izvestia of these issues.