Dhaval Nanavati, president of Alliance Tire Americas Inc., has some advice for tire dealers. “I do not think we should await a general economic recovery. I think dealers should be thinking right now about the role they will play in helping their customers begin recovering as soon as possible.
“How can we provide the tires those customers need to get rolling? How can the tires we sell help them get their machinery running more efficiently and generate a better return on their investment, so they can get their businesses back in the black? How can tire dealers be indispensable partners who help their customers make payroll, regain their footing and rebuild the country?’
Nanavati says those efforts will be more important than ever as the United States economy starts to emerge from the economic shock of COVID-19.
Positive signs
There are signs that recovery is already underway, especially in the agricultural segment, he says.
“Dealers heavy in the ag segment and in the north-central United States are seeing high double-digit growth in unit sell-out versus a year ago. And most of our dealers started seeing some recovery in their business in mid-May for the off-highway tire segment.”
Despite sharp price declines that hit beef, dairy and pork producers in April, “we are confident that agriculture will be a particularly bright spot as we enter the recovery phase.”
On the OTR tire side, “we are very hopeful that Congress and the Trump Administration will create a stimulus plan for recovery that includes a lot of construction and infrastructure projects,” says Nanavati.
Steady growth expected
Like other tire manufacturers, Alliance, which has plants in both India and Israel, has “certainly felt the impact of the crisis.”
The company’s original equipment business was particularly impacted by the decline in tire demand that followed the COVID-19 outbreak, according to Nanavati.
The firm’s Alliance, Galaxy and Primex brand products are OE “in many sectors that have been hit hard by slowdowns in machinery orders. Our replacement business, which represents a far larger portion of our sales, has been less deeply affected.”
Nanavati expects to see steady growth in June, following the same trajectory witnessed in May. “Whatever the speed of the recovery, the market will be proceeding cautiously,” he says. “Of course, that favors replacement tires as owners keep their existing machinery running. But it also slows down the market, overall. Understanding that, we are continuing on the path of introducing some exciting new tires later this year and are working hard to help our customers keep the economy rolling.”
Supply update
Alliance’s four distribution centers in the U.S. “went into 2020 quite well-stocked,” which has allowed the company to maintain a consistent stream of products to dealers and distributors despite a three-week shutdown at its plants in India that spanned late-March through early-April.
The company’s factories in India manufacture “more conventional radial and bias-play offerings, as well as our skid steer, construction, forestry, TBR and radial OTR models.”
Alliance's manufacturing facility in Israel specializes in more technologically advanced products, including the firm's Agriflex+ VF (very high-flexion) tires.
“Our Israeli team did not change its manufacturing schedule significantly but instead continued its great work on the high-tech tires that have been flowing steadily to customers in the agriculture and forestry segments.”
Nanavati, who describes agriculture as “the world’s most essential, fundamental industry,” says Alliance is fortunate to be part of the farming economy.
“No matter what else is happening, all of us must eat every day, so tractors keep rolling. During the height of the lockdowns across the U.S., farmers were still preparing their fields, planting their crops and tending their livestock.”
Alliance also plans to continue key dealer education initiatives that were implemented several months ago, during the height of the pandemic. “We’re now customizing seminars for individual dealers. This effort is being led by our sales and product teams.”
