You don’t often hear of a new tire company touting its main product as a “super-economy brand.” Yet that’s how tire industry veteran Steve Hutchinson describes his organization's flagship line.
The positioning of the brand is by design, he says.
Hutchinson’s new venture, Tire Brands America (TBA), is launching during the most difficult economic environment since the Great Recession.
Budget-conscious consumers are looking for affordable alternatives that don’t sacrifice quality or performance, according to Hutchinson, who is the Huntington, Calif.-based firm’s president and CEO.
And, he believes, the same can be said for wholesale tire distributors, which TBA is targeting as the new company begins building its United States-based sales network.
The goal of TBA, which opened this past March, is to help “foreign-manufactured brands that have no U.S.-based sales team or are underserved in terms of sales and marketing,” says Hutchinson.
TBA’s recently introduced Xcellent line is “brand-new for the United States market and is made for the needs of the U.S. market,” he notes.
The line is built by Crown Tyre, a Thailand-based manufacturer.
Hutchinson’s sales team – which consists of tire industry veterans Art Michalik, Joe Anzelmo, Jack Bidding, Dave Howe and Sean Brennan – are in the process of building a network of wholesale-distributors to carry the product.
“We want the distributor to have a steady, consistent supply from us, which means they have to order on a steady, consistent basis," says Hutchinson.
TBA has no plans to sell through other channels or establish its own U.S.-based warehouse. Running its own distribution center would “bring a lot of cost and would add 10% to 12% to our price.”
Instead, the company is offering exclusive territories. “We want our distributors to take ownership of the (Xcellent) brand. We want them to feel like they can set their own prices.”
Hutchinson believes TBA can sign 10 to 15 wholesale distribution points within the next several months.
“We’re not focused as much on numbers as we are on attaching ourselves to the right players. Whether we have 20 or 30 distributors on-board by the end of the year… that really doesn’t matter. It’s quality over quantity.
“In every market, we’re looking to sign up one – not two or three. And we’re going to run with that. These companies will set their own margins.
“I think a lot of distributors, especially today, are looking for exclusivity. The approach that we are bringing to the market – protected sales territories, strong margins, not having to look over your shoulder – will be very well-received at a time when people are looking for solid partnerships,” he says.
First focus: the LT segment
TBA’s decision to promote Xcellent as a “tier-three, super-economy brand” enables it to enter the U.S. market “without a lot of start-up costs.
“Crown has been selling tires into the U.S. market since the early-2000’s,” he says. “They have a lot of experience designing and building tires to Department of Transportation specifications. Their history has been very strong in terms of quality.”
TBA introduced its first product in the Xcellent line, the Xcellent Roadbreaker A/T light truck tire, in early April. The tire is available in 24 sizes and fits 15- to 22-inch rims.
The next product, the Roadbreaker M/T, will be available in May, June and July in 43 sizes, ranging from 17 inches to 22 inches in diameter. And another light truck tire, the Roadbreaker R/T, will be available this summer in 31, 17- to 22-inch sizes.
The company plans to roll out ultra-high performance and SUV tires under the Xcellent banner this fall. A radial medium truck tire line will follow in early 2021.
TBA is deliberately targeting the growing light truck tire market at the moment. “It’s the hot market opportunity,” says Hutchinson. “And our sales advantage – in terms of having razor sharp pricing – is very strong in the LT segment.
“These are well-designed products: a three-ply casing, very strong construction, and nice-looking. No shortcuts have been taken. It’s a simple sales pitch.”
“We couldn’t have picked a worse time to get started,” says Hutchinson, referring to the current economic situation caused by the COVID-19 pandemic.
“But I’m a huge believer in the spirit of America and the spirit of Americans. COVID-19 will pass and I think things will be pretty much back to normal. They have to be.”
Working from home, Hutchinson and TBA's sales team are connecting with customers via Zoom and other teleconferencing platforms.
Customers have been “very accommodating and understanding. I think they know that this (crisis) is temporary and they have to look forward, too.
“We’re looking to provide a steady supply to wholesale-distributors, consistent with their orders, that can be forecast more accurately over time.”