Thinking of getting rid of your Nokian Tyres shares? Think again.


In the recent news Nokian Tires has been largely criticized after being found manipulating car tire test results.1 Not only is this an unfair and unethical practice against other competing businesses, but they have also knowingly endangered people commuting in traffic.

Nokian Tires sent specifically manufactured tires to the reviewers and tests in order to gain an unfair advantage, reveal internal emails. These emails reveal that Nokian Tires has sent “test grade” and “modified” tires to notable international tire testers in hopes of raising the stock price with the interest of gaining personal bonuses.2 As a result, the stock price did indeed rise, and the management earned massive bonuses.

However, this post is not your common article that points a finger at the company and says “what a bad boy you’ve been.” The world’s largest tire manufacturers, Pirelli and Continental, have been caught before as well.3 Their operations continue as if nothing happened. Keep your shares.

The annual report indicates a decrease in sales, however profits have increased. A 9,5% decrease in net sales from 2013 to 2014 and a decrease of 2,1% in net sales from 2014 to 2015 indicates that other strong competitors have emerged on the markets. Profits for Nokian Tires indicate a strong growth on the other hand. Earnings per share (EPS) have continuously increased since 2013. EPS in 2013 was 1,39 € and the latest annual report reveals that EPS have increased to a very strong 2,42 €.

If we now compare the share price to 3 years back, February 4th of 2013, the share price was 31,46€. This year, on February 4th of 2016, the share price was 30,49€. This alone indicates that the test manipulation results were not recent enough to be able to impact the share price and reliability of the company. The management has since changed, and modern test tires are bought from stores instead of requesting them from manufacturers. This alone makes it almost impossible to manipulate test results with “test grade tires”.

Historically speaking, being exposed to test result manipulation has had a minor impact on tire manufacturing business, such as Pirelli or Continental. A possible explanation for this might be that consumers are interested in the latest test results, and have little interest in the past tests. Tires, like other commodities have a best before date, which guarantees that old tires cannot be sold in stores. The current events are more harming for the image of Nokian Tires rather than its operations.

This does not however mean that there is no risk of a lawsuit. American lawyers are keen and motivated to find casualties of test manipulation. There are no clear facts on who is to blame, what part the management played in the test manipulation scheme as well as the part board of members played. Kim and Tom Lindström from Nordnet investment bank asses the risk of a lawsuit very low on these grounds.4

Now if we take a look at the latest test comparing Triangle IceLink (a budget winter tire that performs above the average in winter conditions) and Nokian Hakkapelita tires. Triangle IceLink performs almost identically on snow as Nokian Hakkapelita 7 and 8 – their latest winter tires, while on ice Nokian Hakkapelita performs clearly for the better. 5 This test from Test World, published on 7th of March 2016, proves that Nokian Tires are premium grade tires despite the news reporting test manipulation.


Nokian Tires is notorious for using test results in their marketing. This could be yet another reason for the interest in manipulation result. Out of curiosity, I went to compare various Nokian Tires on their website. To my little surprise, multiple tires were “test winners” or they were guaranteed a satisfaction guarantee.


As mentioned earlier, the share price dipped immediately after the discovery of test manipulation. The share prices plunged by 9,3 % on the 26th of February 2016, from 32,18 € to 29,79 €. The change is marginal. We can clearly see that the test manipulation has had little to no effect on the stock prices. With a safe mind, you can keep your Nokian Tires shares.




Herrala, Olli 2016. Nokian Renkaat manipuloinut testituloksia vuosia. Kauppalehti. Päivitetty 26.2.2016. Luettu 27.2.2016.

Heikki Haapavaara 2016. Nokian Renkaiden Lehtoranta myöntää: “Meidänkään jauhot eivät olleet puhtaat”. Kauppalehti. Päivitetty 25.2.2016. Luettu 27.2.2016.

Tom, Lindström. Kim, Lindström 2016. Testitulosten manipulointia Nokian Renkaissa. Päivitetty 29.2.2016. Luettu 11.3.2016.

A-lehdet Testiraportti. 2016. Test World. Päivitetty 7.3.2016. Luettu 11.3.2016.

Nokian Renkaat -osake. 2016. Nordnet. Päivitetty 11.3.2016. Luettu 11.3.2016.

Mustonen, Antti 2016. ”Myy Nokian Renkaat” – suosituksia tarkistettin tuloksen jälkeen. Kauppalehti. Päivitetty 8.2.2016.—suosituksia-tarkistettin-tuloksen-jalkeen/sk3PdAKX. Luettu 27.2.2016.

Talous Sanomat 2016. Nokian Renkaat ei näe perusteita asiakkaille maksettaville korvauksille. Talous Sanomat. Päivitetty 29.2.2016. Luettu 11.3.2016.

Talous Sanomat 2016. Nokian Renkaat laskee alavireisessä pörssissä. Talous Sanomat. Päivitetty 29.2.2016. Luettu 11.3.2016.

Petri, Sajari 2016. Rengasyrityksen epäillään varastaneen Nokian Renkaiden yrityssalaisuuksia – taustalla joukko suomalaisia huippujohtajia. Helsingin Sanomat. Päivitetty 2.3.2016. Luettu 11.3.2016.

Talous Sanomat 2016. Testihuijauksen myöntänyt Nokian Renkaat syöksyy pörssissä. Talous Sanomat. Päivitetty 26.2.2016. Luettu 27.2.2016.

Jyri, Hänninen 2016. Gazpromin johtaja ja islantilaisia sijoittajia – näillä rahoilla Nokian Renkaiden vakoilusta epäilty yhtiö toimii. Yle Uutiset. Päivitetty 9.3.2016. Luettu 11.3.2016.

Hanna, Hoikkala. Christian, Wienberg 2016. Nokian Renkaat Apologizes for Past Tire-Testing Mistakes. Bloomberg. Päivitetty 26.2.2016. Luettu 27.2.2016.


This entry was posted in Uncategorized. Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s