The following is the first in MTD's exclusive series of interviews with top truck tire executives about the impact of the COVID-19 crisis on business, plus their outlook on demand, shipments and other key factors during the second half of the year. Stay tuned to www.moderntiredealer.com for more coverage!
Like other manufacturers, Sumitomo Rubber North America (SRNA) has not been immune to the impact of COVID-19. That includes the effect on truck tire demand. However, “it appears that the worst is behind us,” Bob Klimm, SRNA’s director of TBR sales, said during the company’s latest online dealer forum.
In this exclusive Q&A, Klimm, who is responsible for SRNA's Falken brand truck tire lineup, recalls the impact of COVID-19 on SRNA’s commercial tire business. He also discusses potential consequences for truck tire shipments and other topics.
MTD: How did the COVID-19 pandemic and resulting government actions impact your commercial truck tire business in the United States and Canada?
Klimm: April is when Falken started to see a downward impact on commercial tire sales. We were coming off an excellent first quarter and then we saw a noticeable reduction in our daily order volume at the beginning of April. The second half of the month was slightly better but still off our average daily order rate. Even with the minor disruption, we are optimistic about our commercial truck tire sales.
MTD: A number of tire manufacturers, including SRNA, temporarily suspended production at their U.S.-based truck tire plants. (Editor’s note: SRNA’s plant in Tonawanda, N.Y., resumed production in early-May after a three-week shutdown.) It is expected that these shutdowns and/or production suspensions will have an impact on truck tire shipments for the rest of the year. Can you quantify expected shipment declines?
Klimm: We do not expect any shipment declines due to our temporary plant shutdown. We are in excellent shape as far as our inventory. In fact, we currently have a good supply of safety stock. We feel confident that we will be able to maintain our excellent fill rates as demand increases. We have the capacity and the production timelines to stay on pace with the increase in business that we expect to see.
MTD: When do you expect OE and replacement tire demand to bottom out and when will demand – in both channels – start to rebound? What are you doing to prepare for this?
Klimm: We believe we hit the bottom in April and that we will start to see replacement demand increase as more cities and states open back up and more businesses restore operations. We’re optimistic that the worst is behind us.
MTD: Truck tire dealers have played an instrumental role in keeping fleets up and running during the COVID-19 pandemic. What are you doing to support your dealers? What advice do you have for them during this challenging time?
Klimm: We are very fortunate the Falken has kept 100% of our sales team and staff on board through the surge of the coronavirus epidemic. We have been able to stay active and in good communication with our dealers. And as I mentioned earlier, our inventory is in great shape, so we are ready.
“As far as advice for dealers, I would suggest the same guidance that we are trying to adhere to: stay in close contact with their customers,” says Klimm. “This is a time in which they need to know you care and are there to support them.”