Graeme Brown speaks to George Rietbergen, managing director of Goodyear Dunlop UK and Ireland, about raw material costs, winter tyres and future plans for Midland manufacturing.

Insatiable demand for cars in emerging nations is driving the tyre industry – and Goodyear Dunlop’s top man in the UK hopes it can mean more jobs in the West Midlands.

The company’s Birmingham-based Dunlop Motorsport arm has secured a new contract to supply a major international motorcycling championship series and is operating at full capacity.

And with near neighbours Jaguar Land Rover announcing record £1 billion-plus profits on the back of demand from the Far East the potential for the domestic industry is clear.

The company’s UK operation has returned to the black after a loss-making period. It employs more than 1,000 people in the area – 250 at its TyreFort headquarters, 400 at Dunlop Motorsport and 400 in Wolverhampton – and Mr Rietbergen said ongoing success was key to local investment and job creation.

He said: “The demand in the tyre world is very strong. Look at Jaguar next door – it is showing double-digit growth and every one of the vehicles goes out with four tyres.

“We are looking to have a factory operating at full capacity and maximising the full factory capabilities. We would love to invest more. Recently we have invested to expand a retreading plant in Germany. I would love to invest more here, and obviously that would mean taking on more people.

“From a labour or people point of view I think that the next few years we foresee that the demand will be strong and we would like to expand – but that depends on a lot of things.”

Goodyear has already benefited from demand for Birmingham-made Jaguars, as the firm supplies for the XK, XKR, XF, XFR and the new XJ models, as well as Nissan, Audi and Mercedes.

The strength of the market was highlighted recently when Goodyear Tyres reported a 27 per cent rise in first quarter sales to £3.3 billion. The company doesn’t disclose revenue details solely for the UK but Mr Rietbergen said the company is back in the black.

He said: “We have had a huge turnaround. We are now a decent, successful company.

“That is important. If we want to invest in factories and invest in the organisation then we have to be successful.”

The company’s Dunlop Motorsport, which is headed by Jean-Félix Bazelin, is enjoying a rich run of success and has announced a deal for the exclusive supply of tyres to the Moto3 Championship, which will replace the 125cc grand prix category. The deal will begin on the introduction of the new race category in 2012 and will run until the end of the 2014 season.

The company, which recently invested £1.5 million in the return of the iconic Goodyear blimp, currently supplies 250,000 tyres a year to motorsport customers.

Although the tyre sector is being hampered by rising raw materials prices. For example, natural rubber costs increased by 50 per cent in 2010 according to reports.

Mr Rietbergen said this was in part down to market speculation and the only answer was a lean manufacturing process and careful use of materials – with the weight of some tyres being reduced by up to 10 per cent.

He said: “I can’t influence the raw material costs unfortunately. In the last few months we have seen big increases, and there has been a lot of speculation.

“There have always been ups and downs – if it starts raining in Asia the prices go up – but the ups and downs have got stronger because of people speculating.”

Meanwhile, one opportunity for the company to increase UK sales is the introduction of cold weather tyres, which are widely used in other European countries.

In December last year Midland MPs Gisela Stuart and Jack Dromey called for winter tyres to be made compulsory in the UK.

Mr Rietbergen said: “I am Dutch and the weather is exactly the same as in England and basically we want to show that it saves money.

“The first stage is to see police cars, ambulances and school buses with winter tyres.

“These are straightforward things. Of course I am biased because I am a tyre manufacturer but it is all about how we can create a safer environment.

“It makes sense. You wouldn’t wear your sandals in the winter, would you?”