This week’s announcement by Nokian Tyres plc that it was building a third tire plant may not have been a huge surprise. But how that plant will help the company increase sales in North America, and affect its product lineup, is sure to interest tire dealers.
Here are five more things to know about Nokian’s plan for the future in the U.S. and Canada, as revealed by the company’s interim President and CEO, Andrei Pantioukhov.
- “We should be able to double our sales in North America in the next five years.”
In 2016, Nokian reported 11% of its net sales were made in North America, about 153 million euros, or $161.8 million using the end-of-year currency rate.
- The company considered 80 locations for its third tire plant, and called the Dayton, Tenn., spot “clearly the best for our purposes.”
Pantioukhov attributed the “full support” the company has received “from authorities on all levels — state, county and city.” He said he was prohibited from talking about the specifics of the financial incentives Nokian received to build the plant there.
- The plant will be built for a capacity of 4 million tires a year, but like other tire companies, it has room to grow, and “expansion potential to double the capacity, to triple the capacity, and go even beyond that in the longer term.”
- With a production site in North America, Nokian will be able to focus more on tires specific to this region, namely, all-season tires and segments within the all-season category, such as light truck tires.
“During the last few years we’ve expanded our product portfolio to cover much bigger segments of all-season tires for the North American market. They represent already a significant part of what we sell in North America, and the growth is projected to come mostly from those categories.
“What we plan to do is localize production of those North American-specific products, which are exclusive or primarily sold in the North American market.
Tommi Heinonen, head of Nokian Tyres North America, says tire dealers have been asking for more all-season products. In the fourth quarter of 2016 the company launched an all-season ultra-high performance tire, the zLine.
“We follow the all-season market carefully, and there are still some segments in all-season where we need to bring our product offering. We are slowly growing on those,” Heinonen says.
- Don’t expect “made-in-the-USA” Hakkapeliitta tires anytime soon.
Pantioukhov admits “there is limited draw in the winter market because it has a limited scale in North America.
“It’s not the first priority to localize those products. First priority is to localize production of North American products.”
Click here to read about the new plant: Nokian Plans U.S. Tire Factory