Why Kumho appears poised for a big year

Bob Ulrich
Posted on February 12, 2015

Last year was a challenging one for Kumho Tire U.S.A. Inc. But it was not unexpected.

Prior to 2014, the loss of some key people, some problems with supply and a lack of new products had a domino effect that led to a loss of market share last year. Kumho hired Harry Choi as CEO and president and S.B. Kim as marketing manager to, as Choi said when I interviewed him in 2013, "go back to the basics" (see "Choi's vision for Kumho").

Hiring a new national vice president of sales, former Toyo Tire U.S.A. Corp. executive John Hagan, was the first step toward improving its position in North America. I sat down with Hagan, Choi, Kim and Edmund Cho, general manager, strategic planning and sales administration, in Las Vegas last November to check on the turnaround.

Hagan said Kumho was back to having a full sales team following a number of hirings. “We’re always looking for people. We’re no different than anyone else."

He said each member of the sales force has more tools with which to work, including iPads.  The result is better communication with their dealers, who want faster response times.

As for supply, the problem with backorders wasn’t lack of production, per se, according to Hagan. It was more with getting containers through "the bottleneck" at the Long Beach port. That already has improved.

In addition, construction of the Kumho plant in Macon, Ga., is back on schedule. The first phase will be completed by 2016. “Basically, that plant will be dedicated to OE business in North America,” said Hagan. (Kumho is original equipment on Hyundai, Kia and Chrysler models. Choi said a fitment with at least one new car maker is in the works.)

When the second phase is completed in 2018, the plant will be able to supply tires to the aftermarket as well.

Kumho even prepared for the tariffs on consumer tire imports from China by moving molds the minute talk of a possible tariff began. The company is bringing its tires into the U.S. mainly from Vietnam and Korea.

As for new products, 2015 will be a big year for Kumho. At its dealer meeting in December, Kumho announced plans to introduce five tires in the first six months of this year (see "New tires and promotions boost Kumho brand").

Kumho also needs to increase its retail distribution base. "We have some holes in the market," said Hagan.

"Our main thrust is really to be more supportive to our dealers," said Hagan. "We are listening to them.

"We're getting creative in how we let the dealers market the tires, and we feel by doing that, we’re giving them the ownership in the brand in order to promote it.”

Since my interview, I have heard of two major tire dealers that have added Kumho to their inventories. Choi's strategy appears to be working.

For more information on Kumho's aggressiveness in 2015, check out these links:

"Kumho unveils all-weather Solus in Canada."

"Kumho's campaign features Carmelo Anthony."

Related Topics: Edmund Cho, Harry Choi, John Hagan, OE tires, S.B. Kim, tire plant, tire tariffs

Bob Ulrich Editor
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