Toyo CEO Tells Dealers: 'Prepare for Post-COVID-19 Surge'
In the midst of the COVID-19 pandemic, Roy Bromfield, president and CEO of Toyo Tire U.S.A. Corp, has an optimistic message for tire dealers: “Prepare for an emergence from this crisis. It will come.
“It is a reality that retail traffic is down and that the cash flow of our retailers and distributors has been impacted” by the economic fall-out from the COVID-19 crisis, he says. “But our customers are smart and savvy, so they have already taken the tough decisions and actions to deal with the ‘today’ of the crisis.”
In the months to come, dealers need to ensure they are “positioned for success when the market returns to normal and perhaps for even a surge in business to meet pent-up demand,” he says.
Like other tire manufacturers, Toyo has taken “internal steps” to manage expenses in response to the severe jolt caused by the COVID-19 outbreak and related government actions.
Most notable was the suspension of production at its consumer tire manufacturing plant in White, Ga., which was announced on March 30.
Toyo initially expected to resume production at the facility – which can build 46,500 tires a day at full capacity, according to MTD research – on April 19. However, the plant remains shuttered and the company has not provided a revised reopen date.
Meanwhile, Toyo’s two plants in Japan are picking up the slack. Both supply tires to the U.S. market.
One of the plants – in Sendai – was shut down for a brief period to balance supply with demand but is now operating again.
A short shutdown at another Toyo plant in Malaysia that supplies product for the U.S. had “little impact on our ability to maintain high fill rates for our dealers,” says Bromfield.
Toyo also pulls its North American truck tire supply from Japan. The commercial truck tire market “has remained relatively strong for Toyo in the U.S.,” he notes. “We’ve had no supply interruption and our inventories are healthy to support our dealers.”
The company expects demand for truck tires to be even more robust “as business heats up across the broader economy.”
Bromfield says Toyo will continue to evaluate market conditions – including inventories and customer fill rates – and these factors will help determine when the company’s U.S. plant restarts. “Naturally, we hope this will be soon.”
No pause on new products
Manufacturing stops and starts have not slowed Toyo’s product roll-out schedule in the U.S.
In March, the company launched the latest addition to its Open Country light truck tire line, the Toyo Open Country A/T III.
Earlier this month, it unveiled the Toyo Proxes Sport A/S, an ultra-high performance, all-season tire that replaces three previous-generation Proxes products, and the Toyo NanoEnergy M671 “super-regional” commercial truck tire.
“Although we have had to curtail a number of planned launch activities due to coronavirus guidelines and restrictions, we still feel it is critical to bring these products to market,” says Bromfield, who adds that product development will continue.
“I know that our new product planning and technical teams here in the U.S. are still very active with our colleagues in Japan relative to new product development projects.”
He notes that “enthusiast segments” – particularly all-terrain and mud-terrain light truck tires – are holding their own despite overall consumer tire demand declines. “Our Open Country A/T III is doing especially well.”
As Toyo continues to manage through the ongoing pandemic, “we are doing everything possible to maintain high fill rates and to ensure our supply is strong for the post-COVID-19 surge,” says Bromfield.
“We are addressing the needs of our customers on a case-by-case basis and understand that their health now and over the coming months is critical to our relationship when we emerge from this crisis. Communication is critical… so we have urged our sales and management teams to be a friendly voice and (provide) a sense of calm.
“We’re keeping our Toyo team intact and sharp – and are planning for a bright future.”