The Gas & Rubber War

WESTERN EUROPE

What with Europeans' mounting urge to take to the road, U.S. manufacturers have long been successful in the Continental auto market. Along the way, the Western European gasoline and tire market has become increasingly important. It is now second in size only to that in the U.S., and it is growing about three times as fast. Charging in for their share, American oil and rubber companies are faring reasonably well against entrenched competition:

WEST GERMANY. In the wildest gasoline competition anywhere, Jersey Standard's Esso, the country's second biggest marketer after Germany's Aral, has been fighting for the top spot since last spring in a price-cutting war that may cost the companies $125 million in lost revenues this year. On the tire front, Goodyear will start building a $14 million factory this month near Heidelberg to boost its 7% share of the market and keep up with B.F. Goodrich, which is already working on a new $25 million plant. The two, along with Uniroyal and Firestone, are still far behind German-owned Continental, which accounts for well over 30% of all tire sales.

FRANCE. In De Gaulle's price-controlled and prideful camp, foreign firms are on subtle notice not to jostle too hard the state-owned gasoline company, Total, and the state-favored tiremaker, Michelin. As in Germany, Esso is the top foreign company. In France for only the last five years, Goodyear and Firestone now supply 10% of French tires (as against 50% by Michelin), export 20-30% of their output to other European countries. Last week Goodyear joined Michelin in a $25 million project to produce an advanced type of synthetic rubber at a $25 million factory to be located near Le Havre.

ITALY. Pirelli and Ceat, who account for about 75% of the country's tires, have as yet barely noticed the arrival of Goodyear and Firestone, whose plants have reached full production only within the past 18 months. But Goodyear officials believe that the Italians underestimated the extent of their economic boom and are not geared up to cope with the market. Having been in Italy far longer, Esso is now second only to the state-owned gas distributor A.G.I.P., and has increased its sales nearly 20% over the past twelve months --thanks in part to its popular "tiger-in-your-tank" promotion campaign.

GREAT BRITAIN. The costly gasoline price-cutting war has given way to a battle of giveaways, with Shell using such U.S.-style gimmicks as "make money" matching coupons (top value: $280) to hold its commanding 45% of the market against Esso and Mobil. In tires, the home team (Dunlop) has about half of the market. Trying to catch up, Goodyear has announced plans to expand its plants in England and Scotland, and Firestone will build a second plant in Wales. Even now, says Firestone's British division chairman, William A. Adam, the company is working "at 110% of capacity."

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