February 09, 2012
Yokohama's King addresses pricing, the economy, and a new tire: the Avid Ascend
Price increases, raw material shortages and supply problems were major issues that confronted retail tire dealers in 2011, according to Dan King, senior vice president of sales and marketing for Yokohama Tire Corp. (YTC).
In this Q&A interview provided by Yokohama, King, a 24-year tire industry veteran, addresses these issues and other concerns -- and how they will play out in 2012.
Q.: How would you summarize 2011 for Yokohama?
King: It was a very challenging year. The overall market was basically flat, and we are pleased to have seen growth in all segments of our business.
We weren’t, however, as good of a supplier as we wanted to be for our customers. Our demand was very strong, but we were not able to fully supply our dealer partners and allocate product as efficiently as we should.
Q.: Did the Japanese earthquake and tsunami cause some of the fill-rate problems?
King: To some degree. We had damages in our testing facilities, and we had to move some new product testing, but, overall, we feel very lucky that the impact to our U.S. operations was not as dramatic as it could have been.
Q.: What contributed to Yokohama Tire Corp.'s growth in 2011?
King: A lot of our success was predicated on building blocks that have been put in place for years: how we work with and support our dealer base and help them generate business.
We take pride that our dealers like doing business with Yokohama, enjoy selling our product and feel it has tremendous value to their customers; so they opt to talk about Yokohama as a top recommendation. Last year was just one more building block. We want another one in 2012.
Q.: How is Yokohama's consumer tire division positioned for 2012?
King: We will be increasing supply into the U.S. market, so that will help, though it won’t be as dramatic as we’d like. I’d like to really open up and reach our true demand in the U.S., but we will be limited in some areas. At least we will see more product flow into the U.S. that's coming from a combination of offshore and expansion of our Salem, Virginia factory. We'll see the full results of that this year.
We’re also looking forward to doing more promotions with our consumer products, driving even more customers to our dealer base and building our brand power.
We have new products coming out in 2012, including a Grand Touring tire we’re excited about -- the Avid Ascend. This is the latest advancement in the orange oil technology that Yokohama has pioneered. It launches at the end of the first quarter and is going to be the best Grand Touring tire introduced in the market.
The technology we’ve put in the Ascend is remarkable, and we think dealers and consumers are going to be very excited about it. They've probably never ever seen this kind of value in a product before.
The Ascend features Yokohama’s unique orange oil process that we first developed in our racing tires to research traction and manage tire temperatures throughout the life of a race.
Some of the environmental properties derived from the use of orange oil were included in our dB Super E-spec passenger tire that launched in the U.S. in 2009. Yokohama is the first -- and only -- tire manufacturer to utilize orange oil, which is the best environmental tire innovation in the market.
It’s a very intricate process, especially for mass-produced tires, and we want to make sure we're able to be cost-effective. We’ve been able to do that with the Ascend, which will be offered in 45 sizes at launch (T-, H- and V-rated) for a wide variety of vehicles, from performance sedans to crossovers and minivans. And it will be produced here in the U.S. at our Salem factory.
The technology is distinctive because it enables us to blend natural and synthetic rubber to form a new compound that offers better mileage, fuel efficiency and traction without giving up any other benefits.
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