ANNUAL REPORT 2016

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ANNUAL REPORT 2016 Autonrengasliitto ry (Tyre Specialists of Finland) was founded in 1944 as a business and labour market policy organization to further the interests of tyre vendors and retread firms. Members of the association are engaged in wholesale and retail selling of tyres, rims and accessories, tyre retread, maintenance, repair and fitting, as well as exporting and importing. 1. MEMBERSHIP By the end of the fiscal year, which is on December 31st 2016, the Association counted with 67 corporate members operating at 258 locations. Members of the Tyre Specialists of Finland represent more than 70 % of the Finnish tyre market and altogether they employ about 1,600 workers. The number of supporting members on December 31st 2016 mounted to 27. 2. TYRE MARKETS There were 2.629,432 passenger cars in the country on December 31st 2016, compared with 2.612,922 in the previous year. There were 311.376 light commercial vehicles (LCV) at the end of 2016, 94.780 heavy commercial vehicles (HCV) and 12.471 buses. On December 31st 2016 there were 3.048,059 vehicles altogether, which meant 19.726 more than on the corresponding date the year before. Car stock 2014-2016 (in traffic) There were 118.991 new passenger car registrations in 2016, which was about 9 % more than the year before. First registrations of LCVs were 13.523 compared with 11.431 in the previous year. First registrations of HCVs numbered 3.330 and buses 586. First registrations of cars 2014 – 2016 The Association’s sales statistics of 2016 indicate that the aftermarket of summer tyres has decreased by 2 % and the sales of winter tyres by 5 %. The statistics also indicate a decrease by 1 % in the sales of summer tyres for light commercial vehicles and a decrease by 6 % in the sales of winter tyres. The sales of retread heavy

commercial vehicle tyres have decreased by 7 % and new HCV tyres have increased by 14 %. Statistics, based on information provided by importers and manufacturers of retreading materials, indicate that the number of car tyres retread decreased from 70 372 to 53 054 in 2016. The number of HCV tyres given retreads in the same period in 2016 was 147.777. Retreading 2014 - 2016 3. TYRE-RELATED RISKS During the period 2000–2015 there was in Finland a total of 3.325 fatal motor vehicle accidents caused by passenger cars and vans; of these 466 were incidents relating to the tyres of the party responsible for the accident. A total of 552 people died in tyre-related accidents and 171 were severely injured. Tyres are the most significant risk factor affecting driving properties in fatal car and van accidents. A tyre-related risk of some kind or another has been involved in approximately 14 per cent of accidents investigated in the 2000s. During the period 2000 - 2015 there have been, on average, 29 tyre-related accidents annually. Tyre-related risks observed in accident investigations are associated in over 90 per cent of incidents with poor tyres, unsuitable tyres or incorrect tyre pressure. The significance of tyres is emphasized in difficult road conditions, which shows in the risk assessments conducted by the investigation teams. Three out of four tyre-related accidents occur in snowy, icy or wet road conditions. Studded tyres in poor condition or worn tyres are the commonest tyre-related risks found in cars and vans. They represent 46.1 % of all tyre related risks. 4. TYRE PRESSURE Throughout the year 2016 Autonrengasliitto (The Tyre Specialists of Finland) increasingly emphasized the significance of adequate tyre pressure in terms of safety, economy and environment. In the Tyre Check Campaign 2016 tyre pressures were measured for the tenth time. In the Tyre Check 2016 tyre pressures were checked in 5 different locations from altogether 2.373 cars. The checking personnel paid special attention to the pressure disparity in the tyres on the same axle. In 2.7 per cent of the cars checked a pressure disparity of at least 0.5 bars was found, while the share of noted disparity in 2015 was 5.4. per cent in a sample of 2.224 cars.

2014 2015 2016

Passenger Car 77 939 70 372 53 054

Light Commercial Vehicle (pre-vulcanised)

1 468 1 546 1 648

Heavy Commercial Vehicle (pre-vulcanised)

169 064 159 969 147 777

2014 2015 2016

Passenger Car 106 237 108 812 118 991

Light Commercial Vehicle 10 625 11 431 13 523

Heavy Commercial Vehicle 2 560 2 707 3 330

Buses 691 526 586

Together 120 113 123 476 136 430

Passenger Car LCV HCV Buses Together

2014 2 595 867 304 255 95 176 12 446 3 007 744

2015 2 612 922 307 706 95 250 12 455 3 028 333

2016 2 629 432 311 376 94 780 12 471 3 048 059

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Excessively low or disparate tyre pressures are risk Factors in 6-7 fatal road accidents per annum representing about 13 %. According to former surveys, one of five Finns drives on tyres with a pressure deficiency of at least 0.5 bars. Driving on under-pressurized tyres makes the car harder to control in extreme conditions, vehicle pull increases and the tyres can get a blow-out. Tyre pressures carry considerable significance not only in terms of safety but also in terms of economy and environment. Low tyre pressure increases fuel consumption by 3–6 per cent and shortens the tyre’s service life by 25–50 per cent. By using the correct tyre pressures the average motorist can save at least EUR 10 per month in tyre and fuel costs. Applying the same formula, Finnish motorists would save as much as EUR 100 million annually by using correct tyre pressures. 5. WINTER TYRES IN THE TYRE CHECK In connection with the tyre pressure checking campaign (Tyre Check 2016) the signatories also wanted to get an idea of the frequency of winter tyres used in the early autumn. In September 2016, the checking personnel noted that winter tyres were used by 4.6 per cent of the drivers, the sample being 2.373 cars. Related to the whole car stock this meant, that winter tyres were in use in about 200.000 cars in autumn 2016. In 2015 the share of cars with winter tyres was 4.4 per cent, in a sample of 2.224 cars. 6. WET CONDITIONS TEST 2016 The wet conditions tests arranged in 2005 & 2006 by the Tekniikan Maailma car magazine were renewed in May 2016 to get reference material for the annual safety campaign. The test was carried out by Test World Oy in the Nokia test center. The subjects of comparison were high quality summer tyres and non-dubbed winter tyres designed for Nordic circumstances. In the winter tyre test the testing company used both a brand-new set of tyres and a worn-out set. The test results were published on 7.9.2016 in the Tekniikan Maailma issue 16/2016 and in the Safety Campaign 2016 Information Letter on the same day, 7.9.2016. The results were also dealt with in the Safety Campaign’s Press Conference on the 12th of September 2016. In rainy weather the area of contact can be lost almost to nothing. The tyre’s area of contact should be as big as the palm of your hand but in wet conditions it can shrink into the size of your little finger even at normal driving speeds. Besides the amount of water, driving speed and the tyres´ tread depth, the tyre profile and pattern also are factors contributing to aquaplaning.

The tyre´s proneness to aquaplaning was measured in an acceleration test on a 6-mm layer of water. A new summer tyre resisted aquaplaning at a speed up to about 80 km/h. Half worn-out tyres, 4 mm, started to aquaplane at 75 km/h. With poor tyres worn down to 2 mm, the car started to aquaplane at 70 km/h.

The braking tests on wet asphalt were carried out at a speed of 80 km/h. With new summer tyres the car’s braking distance was about 25 meters. With half-worn summer tyres, it was some meters longer but with poor tyres the braking distance was prolonged by as much as 12 meters. At a point, where a car with new tyres had stopped completely, the speed of a car with poor tyres, was continuing at a speed of 45 km/h. As anticipated the wet conditions test showed that the tyres´ performance deteriorated the more they were worn. However, unexpectedly the winter tyres took the testers by surprise with their poor results. It has always been known that soft, non-studded tyres are no good in the summer but in the test, they did not keep up with worn-out summer tyres even as brand new. It has always been known that soft, non-studded tyres are useless in the summer but in the test, they did not even keep up with totally worn-out summer tyres as brand new. This was repeated in the aquaplaning test as well as in the braking test on wet surface. 7. THE “TYRE CHECK 2016” The “Tyre Check 2016” safety campaign was carried out 12.9.-16.9. on the same basis, as in the previous years. The Police, Liikenneturva (the Central Organisation for Traffic Safety in Finland) and Autonrengasliitto (The Tyre Specialists of Finland) were once again, for the 20th time, gathered for a common cause to promote use of appropriate tyres against aquaplaning. In the campaign drivers were recommended to keep an eye on the tread depth of their tyres in compliance to the theme “Check your tyres in time”. The theme emphasizes the driver’s own responsibility in a positive way. The core of the “Tyre Check 2016” safety campaign consisted of handing out the results of the summer tyre check 2014, the results of the wet conditions tests arranged by the Tekniikan Maailma magazine in 2016, a comparison of the area of contact between tyre and road, as shown in the poster “Can you trust your paws?”, a poster with the big question : “Are your tyres appropriate for the road conditions?” and the results of an analyse of tyre-related risks in the 2000’s in passenger cars and vans, and finally a campaign folder titled “Check your tyres in time”. The main objective of the campaign was to remind drivers of the importance of safety in wet autumn conditions, to activate drivers to pay

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attention to the condition of their tyres and to encourage them to use safer tyres appropriate for the prevailing road conditions.

The main messages of the safety campaign: observe the recommendation for tyre thread

depths: at least 4 mm in wet conditions use appropriate tyres for the prevailing road

conditions check the air pressure of your car tyres at

least once a month remember that not even the best of tyres are

of any help if the driver takes too many risks hand over your discarded tyres for recycling

at no cost

The “Tyre Check 2016" safety campaign consisted of a series of top level operations with a centralised administration as well as several local activities administered by the member companies in different locations. The top-level operations consisted of contacts with national key media and the most significant co-operation quarters, a national press conference in Helsinki on September 12, and an extensive production and distribution of a large campaign material.

The local activities covered contacts with the local Police and the local offices of the Central Organisation for Traffic Safety. Recruiting and training of staff, arranging the raids, the contacts with the local press and radio, the local press conferences and applying for local support from the Central Organisation for Traffic Safety also were carried out at local level.

The most spectacular part of the campaign was the "Tyre Check" with informative tyre inspections carried out on the Finnish roads in 12.9. – 16.9. The raids were supervised by the Police and Autonrengasliitto (The Tyre Specialists of Finland). For the twentieth time Autonrengasliitto's “tyre doctors in white” were dispensing information on tyre safety to the motorists.

The local activities were administered by a local organisation temporarily set up for this purpose. The country was divided into 12 regions, which each had a campaign manager.

Each regional campaign manager appointed a "Raid Chief" and a "Media Chief" responsible of the local arrangements. Often the Raid Chief and the Media Chief was one and the same person. Altogether 53 Raid Chiefs and Media Chiefs participated in the events.

Representatives of the member companies who took part in the checks were uniformly dressed in white disposable overalls and "Tyre Check" caps. Member company representatives acted as representatives of the association.

The inspection consisted of checking the condition of tyres, logging the information into a research form, dispensing information on tyres to motorists and handing out campaign material.

The media results of the “Tyre Check 2016” Once again the campaign was a great success. There was an enormous media publicity surrounding the campaign with spots on national TV and radio networks as well as the local press and radio stations nationwide.

The follow up of media indicates that the safety campaign and the summer tyre inspections were noted by the main TV channels 43 times, appearance time altogether 29 minutes and 15 seconds, by the bigger newspapers and regional papers in altogether 94 articles followed by a considerable number of photos of tyres and snapshots of different tyre checking situations. The distribution of printed media was 3 283 769 copies. The overall distribution numbers for the newspapers that has treated the campaign in the period 1997-2016 was over 156 Million, the total number of articles mounting to 4 321. In the corresponding period the total time of television transmission was about 7.5 hours.

8. SUMMER TYRE SURVEY 2016 In their work around the Tyre Check Safety Campaign 2016 media focused on the results of the Summer Tyre Survey 1997 - 2014 published on 7.9.2015.

In connection with the Tyre Check Safety Campaign 2016 a Summer Tyre Survey was organised in the same way as before. An extensive research material was collected with focus on the condition of summer tyres and the drivers’ knowledge of their tyre condition.

The advisory tyre inspections, where experts from member companies assisted the police, reaped much positive publicity. Inspections were arranged at 50 localities around Finland, attended by approximately 200 tyre experts from companies belonging to the association. During these "checks" summer tyres were inspected on as many as about 8.500 passenger cars and LCVs. In the period 1997-2016 over 186.000 cars tyres have been checked

The main objectives of the Summer Tyre Survey: to collect information on the condition of summer

tyres and the motorists' tyre awareness to collect research material as basis for

communication programs to promote tyre safety to follow up the development of summer tyre

condition

In the survey summer tyres are divided into three categories of condition depending on the depth of tread: good (5 mm or more), satisfactory (3-4 mm) and poor (2 mm or less). Cars were rated according to the condition of their worst worn out tyre. Motorists’ tyre awareness was measured by asking them to estimate the condition of their most badly worn tyre.

The results of the Survey 2016 were not available at the time when this annual report was in print.

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Therefore, we now only quote the most significant results of the 2014 Summer Tyre Survey here.

The Summer Tyre Survey 2014

Decrease in the number of cars with poor tyres The results are analysed on basis of the worst worn tyre in the car. A summer tyre with a tread depth of 0-2 mm is classified as poor.

In the autumn 2014 the share of cars with poor tyres was 15.3 per cent in comparison with the beginning of the follow-up period, when every fourth (24.4 %) motorist was driving on poor summer tyres. Compared to the whole automobile park in Finland the number of cars with poor tyres was about 547.000.

Cars in accordance with the safety regulations The law requires a tread depth of at least 1.6 mm but o of safety reasons a 4-mm tread depth is recommended. In the autumn 2014 64.9 per cent of the motorists drove with tyres according to the recommendation, while the corresponding share in the beginning of the follow-up was 54.5 per cent.

The development of tread depths The tread depths of summer tyres have clearly grown 1997. In the autumn 2014 the average tread depth of all checked tyres was 4.81 mm that is about 10 % more than in the beginning of the follow-up. The improvement of the most worn tyre is as good as 0.37 mm. In the autumn 2014 the tread depth of the most worn tyre was on average 4.27 mm.

Drivers’ estimations of their tyre condition Drivers were asked to give an estimation of the condition of their tyres using a scale from poor (0-2 mm), satisfactory (3-4 mm) to good (at least 5 mm). In the autumn 2014 58.4 per cent of the drivers gave a correct estimation of the tyre condition category. Awareness of tyre condition has slightly improved since the first checks because in 1997 only 56.4 per cent of the drivers could give correct estimations.

9. TYRE RECYCLING The systematic recycling of used vehicle tyres in Finland started in 1996. The main actors of the tyre branch set up the Finnish Tyre Recycling Ltd on October 31st 1995 to take responsibility for used tyres. The company’s main task is to bring discarded tyres into reuse. Owners of the company are 31.12.2016 ARL-palvelu Oy (owner: The Association of Tyres Specialists of Finland), Bridgestone Finland Oy, Continental Rengas Oy, Goodyear Dunlop Tires Finland Oy, Nokian Tyres Plc and Oy Suomen Michelin Ab.

Within the recycling program of the Finnish Tyre Recycling Ltd. 53.534 tons of discarded tyres were collected in 2016. 485 tons were sent for retreading, 30.631 tons were used in civil engineering works and 7.364 tons were delivered to energy production in 2016. By the end of 2016 Finnish Tyre Recycling Ltd had received 833.655 (1996-2016) tonnes of used tyres in total.

10. SALES STATISTICS

The association’s sales statistics have been published once a month. The statistics are compiled on information from 13 member companies, which are representing 184 of 257 member outlets. The number of product groups is 8. The coverage of the sales statistics is statistically quite remarkable. The association publishes each month's statistics in its own circular series.

11. TYRE SAFETY CARD The system of licensing safety cards for tyre mechanics is the first branch specific safety card system in Finland.

The main objectives of the tyre card training are: to increase awareness of risks and

responsibilities within the branch, to give guidelines for analysing your own work

or working methods, to show safe working methods when handling

tyres and rims and to teach safe methods when working with tyre

pressure and to instruct workers to take appropriate safety

measures at the working site.

After having passed the tyre safety exam the tyre worker will be licensed with a personal tyre safety card. By the end of December 31st 2016, 1.448 persons have taken the exam and are thus Tyre Safety Card holders.

SALES STATISTICS 2015 - 2016 The product groups Change in %

31.12.2015- 31.12.2016 1. Passenger Car Summertyres - 2 % 2. Passenger Car Wintertyres - 5 % 3. Light Commercial Car Summertyres - 1 % 4. Light Commercial Car Wintertyres - 6 % 5. New Heavy Commercial Vehicle Tyres 14 % 6. Retreaded Heavy Commercial Vehicle

Tyres (client retreading and retreading on own - 7 %

7. Agricultural machinery Tyres -6 % 8. Special rims - 5 %