Hille Korhonen, the CEO and president of Nokian Tyres plc, says the company’s timetable to begin producing tires in the U.S. by 2020 is “not just a plan. It’s a commitment.”
By the end of 2020 she says the company will produce 1 million tires at its now under-construction passenger and light truck tire production facility in Dayton, Tenn. By 2022 production will be 4 million tires annually.
To demonstrate that commitment, earthmoving equipment in the background of the groundbreaking festivities on Sept. 20, 2017, roared to life seconds after the ceremonial shovels of dirt were filled and emptied.
Nokian is investing $360 million in this facility, its first in North America and third production site globally. A warehouse will be built on the same site with a capacity of 600,000 tires.
The company is expecting big results from the investment, and Korhonen reiterated Nokian’s previously stated goal of doubling tire sales in North America in the next five years.
Antti-Jussi Tahtinen, vice president of global marketing and communications for Nokian, says, “Without the factory it would be really difficult to grow.”
And growth is on the tire maker’s agenda. In 2008 Korhonen, then a member of the Nokian board, says it was during a 2008 board meeting that members raised concerns about the company’s reliance on tire sales in Russia. At the time, those sales represented 42% of all sales. First Nokian turned its attention to Central Europe. After that, it was clear growth in North America was the future. The company’s first tires landed in North America in 1979, and four years later University Wholesalers Inc. became a dealer.
Korhonen says the North American market has grown to 12% of the company’s overall sales. “We have been growing steadily with you,” she said, addressing the tire dealers from the U.S. and Canada who were invited to the event.
The commitment to the market extends far beyond the new plant, Korhonen says. It includes investments in people, products and marketing as well.
Korhonen says the company will focus on its online sales presence, but is not considering a direct-to-consumer platform. “Our thinking is we should do that together with our dealers.”
Nokian already has 11 product groups specific for the North American market, and the company will be gradually building more.
In fact in early 2018 Nokian will expand its all-season Entyre line with the Entyre C/S for CUVs and SUVs. Matti Morri, technical customer service manager for Nokian, previewed the tire while Nokian executives and dealers were gathered in Tennessee for the groundbreaking.
The Entyre C/S focuses on performance, durability and comfort, and is backed by a 65,000 mile limited treadwear warranty. It will be available in 30 sizes for wheels 16-inches to 20-inches.
