Nokian Tyres plc () is a Finnish tyre manufacturer headquartered in Nokia, Finland, which produces tyres for cars, trucks, buses, and heavy-duty equipment. Known for its winter tyres, Nokian is the only tyre manufacturer in the world with its own permanent winter tyre testing facility. The company's Hakkapeliitta brand name is recognised in Finland as a trademark.
Nokian Tyres concentrates on the consumer car and vehicle tyre replacement and premium snow tyre markets. The company also produces retreading materials and tyre pressure monitors. It once manufactured bicycle tyres but now licenses the Nokian name on bicycle tyres to another Finnish company. The Vianor retail tyre store chain, which services cars in addition to selling tyres, is owned by Nokian Tyres PLC.
The company traces its history to a groundwood pulp mill established in 1865. Car tyre production began in 1932 by Suomen Gummitehdas Oy (Finnish Rubber Works Ltd). A three-company merger formed the Nokia Corporation in 1967; the current Nokian Tyres plc was established in 1988 as Nokia Tyres Limited, a joint venture company with Sumitomo Rubber Industries split from the conglomerate as Nokia Corporation started focusing entirely on the mobile communications business, and was renamed Nokian seven years later with its IPO. Nokian is "Nokia" in the genitive, thus Nokian renkaat meaning "Tyres of Nokia". The European subsidiary of Japanese tyre company Bridgestone is currently the largest minority shareholder. As of 12 December 2019, Bridgestone direct holding was reduced to 3%. (Rubber News 6 January 2020)
History
Early corporate predecessors of Nokian Tyres are the Nokia Aktiebolag (Nokia Company) and Suomen Kumitehdas Oy (Finnish Rubber Works Ltd.). In 1865, mining engineer Fredrik Idestam established a groundwood pulp mill on the banks of the Tammerkoski rapids in the town of Tampere, in southwestern Finland. In 1868, Idestam built a second mill near the town of Nokia, west of Tampere by the Nokianvirta River, which had better resources for hydroelectric production. In 1871, with the help of his close friend, the statesman Leo Mechelin, Idestam renamed and transformed his mills into a share company, founding the Nokia Company.
Suomen Gummitehdas Oy was founded in 1898 and began manufacturing bicycle tyres in 1925 and car tyres in 1932. The Hakkapeliitta tyre name was introduced in 1936, and some tyres sold under the Nokian tyre name still use the Hakkapeliitta brand name. Hakkapeliitta is a (Finnish) historical term used for a Finnish light cavalryman in the service of King Gustavus Adolphus of Sweden during the Thirty Years' War (1618–48). In 1967, Suomen Kumitehdas Oy (originally called Suomen Gummitehdas Oy, Finnish Rubber Works in English) merged with Kaapelitehdas (The Cable Company) and the forest and power industry company Nokia Aktiebolag to create Nokia Corporation.
Nokia Corporation's tyre division (which had manufactured tyres under the Nokia brand; Nokian is the genitive) was split from the Nokia Corporation when Nokia Tyres Limited was created in 1988 as a joint venture company with SP Tyres UK Limited/Dunlop, the British subsidiary of Japanese tyre company Sumitomo Rubber Industries. Nokian Tyres PLC shares were floated on the Helsinki Stock Exchange (OMX Helsinki) in 1995, and was renamed Nokian as a result. Nokia, which became the largest mobile telephone manufacturer in 1998, ended its ownership interest in Nokian Tyres in 2003, selling its holding of 2 million shares to Bridgestone Europe NV/SA, a subsidiary of the Japanese tyre manufacturer Bridgestone, for U.S. $73.2 million. This made Bridgestone the largest shareholder, with an 18.9% stake, later diluted to 16.8%. Bridgestone announced that Nokian Tyres would be operated independently, but it would consider complementing the company's product development, testing, and distribution.
In 1974 the production of bicycle tyres and inner tubes was centered in a new factory in Lieksa, Finland. In 2004, Nokian Tyres sold its bicycle tyre business to Suomen Rengastehdas Oy for €3.6 million. This successor company remained one of the few manufacturers of tungsten carbide-studded snow tyres for bicycles. Suomen Rengastehdas continued to produce bicycle tyres until the bankruptcy of the company on 20 May 2019.Newspaper Lieksan Lehti, Finnish Tyre Factory in Bankruptcy (in finnish), 29 May 2019, https://www.lieksanlehti.fi/uutiset/1597 In September 2019 LieksaTyres OyDun & Bradstreet, 29 November. 2022, https://www.dnb.com/business-directory/company-profiles.lieksatyres_oy.cc1eb91d2205c92dcb1c148018e35b48.html acquired the bankruptcy estates including model rights, immaterial rights and production lines of Suomen Rengastehdas and continued the production of promising product categories including bicycle summer tyres.Yle News, September of 2019, The production of bicycle winter tyres starting again (in finnish) https://yle.fi/a/3-10985847
Nokian Tyres set up a joint venture, Ordabasy – Nokian Tyres JSC, with Ordabasy Corporation JSC, a multi-industry Kazakh company, to manufacture passenger car tyres at a planned new factory in Kazakhstan. The venture started in 2007, but the manufacturing project was put on hold in early 2009.Company statement on occasion of publication of 2008 Annual Report. Nokian Tyres was to provide technical expertise in tyre manufacturing, and the products were to be sold in Kazakhstan, Central Asia, Russia, and Eastern Europe. In 2009, the Nokian Hakkapeliitta tyre model line received the "List of trademarks with a reputation" status by the National Board of Patents and Registration of Finland.
The 2022 Russian invasion of Ukraine had a severe impact on Nokian Tyres as the company had manufactured 80 percent of its car tyres in Russia. Nokian initially continued its operations in Russia, expressing that it wished to retain control over its factories and ensure they were not used for military purposes. It also said it would boost production in Finland and the United States. During the summer, Nokian began to withdraw from Russia. In October, Nokian sold its Russian operations to Tatneft for €400 million and announced a €650 million investment for a new factory in Romania.
Financial information
Nokian Tyres' three principal activities are the manufacture of passenger car tyres, heavy commercial tyres, and retail tyre sales. As of 2008, Nokian is the most profitable tyre manufacturer in the world, at up to 18% earnings (before taxes and interest) relative to sales, compared to 14% at Bridgestone, 8% at Michelin, and 9.6% at Continental.
In 2010, Nokian Tyres profits were €167.9 million on sales of €1.058 billion, an increase in revenues of 32.5% on the previous year. The company had revenue growth of 18% annually in the 2003–2007 period. Nokian Tyres is also publicly traded on the Berlin Stock Exchange. Kim Gran has been the President and chief executive officer since 1 September 2000, having previously served as a vice president for five years.
Products
Passenger car tyres Nokian Tyres produces tyres for passenger cars, SUVs, and vans.Products , Nokian Tyres. Retrieved 27 November 2009. Nokian branded tyres are sold in over 60 countries. Nokian Tyres designed the first winter tyres in 1934 and has more winter tyre patents than any other manufacturer.Nokian to Expand Via Russian Operations, St. Petersburg Times, 3 June 2005. Retrieved 22 December 2009.World's Leader in Winter Tires, Nokian Tires. Retrieved 26 November 2009. Nokian Tyres is known for its winter tyres,LIVE AT SEMA: Nokian Debuts First N.A. All-Season Line , Tire Review: The Tire Industry's #1 Source for News and Analysis, 5 November 2009. Retrieved 15 December 2009. not to be confused with all-season tyres.Winter tires and caution can help keep cars on the road, Burlington Free Press, 4 January 2010. Retrieved 4 January 2010. Nokian winter tyres have been described as a favourite of criticsBest for Harsh Winters, Consumer Search. Retrieved 26 November 2009. and have been well received in winter test results by several publications.Vinterdackstest (Winter Tire Tests) , Teknikenvarld. Retrieved 26 November 2009.Tire Test: Nokian WR "All-Weather Plus" , Canadian Driver, 15 July 2003. Retrieved 26 November 2009.Nokian Studded Tyre Tops European Magazine Test , TirePress, 23 November 2009. Retrieved 12 December 2009. Nokian also has designed some winter tyre models with low rolling resistance, offering lower fuel consumption. Nokian was the first company to produce a tyre that allowed for year-round use by having different tread patterns on the lateral and medial aspect of the tread. One pattern is optimised for winter and another pattern is designed as an all-season pattern.Pat Foran on whether winter tires are right for you, CTV Canada. Retrieved 11 December 2009.
Nokian Tyres was the first tyre manufacturer in the world to eliminate high-aromatic oils from its production process. Used as plasticising agents in tread production and to facilitate the compounding of rubber, they contain polycyclic aromatic hydrocarbons (PAHs), a carcinogen, and have been replaced by low-aromatic oils.Purified Oils , Nokian Tires. Retrieved 26 November 2009. In 2006, Nokian Tyres received a commendation in the Finnish round of the European Business Awards for the Environment.Nokian Tyres Against Climate Change , Nokian Tires. Retrieved 26 November 2009.
The demand for Nokian tyres is seasonal, as a high percentage of the company's sales are of winter tyres, but it has reduced seasonal fluctuations by its development of summer and all weather tyres., Reuters India, 7 May 2008. Retrieved 11 December 2009. According to the company, more than 80% of its passenger car and van tyre sales are winter tyres. Winter tyre sales have a strong seasonal characteristic with 30% of retail sales occurring in the ten days after the first snowfall, thus presenting challenges in production and delivery.
Nokian Tyres does not sell to automobile manufacturers, but instead concentrates on the more profitable consumer tyre replacement and premium snow tyre markets.Nokian Analysts Prove Wrong as Pirelli Targets Russia, Bloomberg, 12 September 2006. Retrieved 6 January 2010. Nokian Tyres has the highest market share of the Finnish passenger car tyre market. The Finnish, Swedish, and Norwegian markets contributed over 40% of Nokian Tyres' corporate net sales in 2008.
The Russian market, Nokian Tyres' largest, contributed 34% of the net sales and captured 26% of the Russian winter tyre market. CEO Kim Gran describes the Russian consumer as having a "love affair" with the Nokian brand citing that it stems from tyres which suit the local weather conditions and a genuine need in the market. The use of winter tyres, which have softer rubber compounds than all-season tyres, results in improved starting, stopping, and steering performance.Smith, Bruce, SNOW TREADS Winter driving expert lauds purpose-built winter tires , Truck Test Digest. Retrieved 16 February 2010. The Hakkapeliitta brand was, at one time, the only Western tyre brand in Russia having entered the market during the Soviet era in 1964. In contrast to having a Russian tyre factory to benefit from lower tariffs, another tyre company, Continental AG, abandoned Russian tyre production and hopes for Russian membership in the World Trade Organisation will result in lower import tariffs.
In 2009, the North American market accounted for over 10% of the company's net sales. Nokian Tyres has a tyre subsidiary based in LaVergne, Tennessee (USA). In that market, Nokian Tyres sell only to independent dealers, some of whom use the tyre products to fill in gaps in their product lines instead of an exclusive or majority share. This results in some dealers being knowledgeable about specific tyres but not Nokian Tyre's full tyre product range.Nokian broadens reach of tires, Tire Business, 1 August 2005. Retrieved 7 February 2010.