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Wheels of Forgery

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Last week Nokian Tyres, the early rubber spinoff of Nokia now stock listed on its own, was abruptly brought to spotlight due to delivering special tyres for consumer tests. The previous and current CEOs explain that this is standard practice in the tyre industry, so they just had to play along. I call this high definition bullshit.

Car tyres are relatively expensive consumables and contribute a lot to the total lifecycle cost of the car. In addition, they have significant impact to human safety, and their environmental footprint is large, oil being a vital manufacturing ingredient.

Delivering totally different tyres to testers than what one can buy from stores is fraud, or at very least bad business practice that will eventually be exposed, by disgruntled employees, competitors or just by accident.

The way to sustainable business is to transform tyres into a continuously evolving service, where customers get the type of wheels they truly need, based on their environment, driving habits, car characteristics and may other data points.

Already now many new cars have pressure sensors at each wheel, notifying the car ECU (on-board computer) if pressures are not correctly balanced. This data collection system could easily be used to collect tyre wear, temperature, stud condition and rubber characteristics, and be utilized all the way by the manufacturer in order to mass customize the best wheels to each customer and the environment.

This would be a sea change for the current tyre industry, but at this dawn of digitalization it will be the only sustainable way forward. The transformation will be painful, as there are many outdated value chain actors there who stand to lose and try to slow down the inevitable.

When Nokian management found out about the fraud, they would have been in a pole position to turn the PR disaster into a catalyst for rubber industry revolution. But they chose otherwise. But it is not too late for spimewheels.

//Pasi

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