In 1985, the Falken tire brand was introduced to the North American market. The brand grew, focusing heavily on the high performance side of the business.
In 1999, Sumitomo Rubber Industries (SRI), the parent company of Falken Tire Corp. (FTC), entered a global alliance with Goodyear Tire & Rubber Co. This alliance prevented the Falken brand from having all of the necessary assets to grow unabated in North America.
Today, Falken’s total market share for replacement passenger tires is 3%, with a 5.5% share for high performance tires and an 8% share for ultra-high performance tires.
Now, 30 years after its introduction, the brand is entering a new era. CEO and President Richard Smallwood calls it “Falken 2.0.” Putting it bluntly, Smallwood said, “The handcuffs are off.”
At the October 2015 Falken Dealer Meeting in Kansas City, Mo., customers were told to expect 12 new tire lines in the next 18 months, with four lines coming on the TBR side of the business.
In addition, Falken is “aggressively going after the OE business. Our plan is to have 5% market share at OE by 2019-20,” said Rick Brennan, executive director of marketing.
Falken is already OE on some of the Chrysler 200 and Jeep Compass vehicles being exported to Europe. Canadian and U.S. fitments will follow.
Four Cornerstones
Smallwood emphasized the company’s four cornerstones during the meeting. “We will do whatever possible to build and secure the loyalty of our customers.” The four cornerstones for Falken are profitability for its customers, competitive fill rates, compelling products and being easy to do business with.
“Falken is the only brand of SRI that can be sold worldwide,” said Smallwood. For that reason, he said the company has launched a global marketing department to allow SRI to “pour a lot of energy into the brand.”
Kenji Onga, senior executive director of SRI and chairman of FTC, said SRI is committed to the success of the Falken brand. “It must be the global brand for our company.” He said dealers will soon be seeing changes in sales and marketing to help the brand.
Onga pointed to the establishment of R&D in the U.S. along with a complete tech center for SRI. “You have our commitment to provide better fill rates and strengthen the brand awareness to make it easier for you to sell our brand.”
Built in the U.S.
The plans also include the manufacturing of Falken-branded tires in the U.S. at SRI’s Buffalo, N.Y., plant beginning in October of 2016. That is when the company will phase out production of Goodyear brands and begin producing tires for itself.
The plant, built in 1923, currently is producing 5,000 consumer tires, 2,700 truck tires and 4,700 motorcycle tires per day. The motorcycle tires will continue to be produced under the Dunlop name.
Another big change for Falken is the “building of a truck tire department at FTC. We are going to go after the medium truck business in North America,” said Smallwood. He said the company had sold truck tires in the past, but now is making a major commitment to that segment.
Andrew Hoit, vice president of sales, said the company has increased the number of account managers in the field as well as division managers in the field. He continues to recruit talented individuals from around the industry to create the new truck tire department.
In terms of marketing, the company plans to use its Major League Baseball (MLB) marketing agreement to help the brand grow in consumer awareness. This is the first sports marketing agreement by Falken outside of previous motorsports activities.
Smallwood summed up the agreement this way, “We are doing this to help you (tire dealers) sell more tires. If you don’t make money selling our tires, you don’t need us.”
The company is aware that MLB’s demographics aren’t as youth oriented as what Falken’s image is. But the company wants to expand its following and believes the MLB agreement will do just that.
Coming attractions
The four new Falken tires, which will be available in the first quarter of 2016, are as follows.
- WildPeak M/T. The off-road traction tire, “built for the toughest terrain,” according to Falken, will be available in 25 LT sizes ranging from 15 inches to 20 inches. Popular fitments for the tire include the Jeep Wrangler, Chevrolet Silverado, Ford F-Series, Nissan Titan and Toyota Tundra.
- WildPeak A/T3W. The all-terrain tire is engineered “for adventure, any time and in any weather.” It will be available in 54 LT and P-metric sizes, also ranging from 15 inches to 20 inches. Falken says it covers 70% of its targeted market.
- Sincera SN250 A/S. The high mileage, all-season performance touring tire will be available in 54 P-metric sizes. It is designed to compete against the Michelin Defender, Continental ProContact, Yokohama Avid Ascend and Toyo Versado Noir.
- Azenis FK450 A/S. The all-season ultra-high performance tire has a 50,000-mile limited tread wear warranty. It will be available in 48 sizes ranging from 16 inches to 20 inches.
On the commercial side, Falken is introducing four tires next year. The BI 850, an open shoulder regional drive tire in March; the RI 130, a long-haul steer axle tire in June; the RI 150 regional all-position tire in June; and the BI 830, a line haul closed shoulder drive tire due in August.
The company currently has 7,200 points of sale in the U.S. and is looking to expand that number. “We’re looking to grow our points of sale, yes, but we also want to grow our in-store sales with our current customers,” said Smallwood. FTC currently has 200 full-time employees and another 45 temps. By 2020, the company hopes to have a total of 300 to 310 people working for it.
When asked if Sumitomo Rubber was looking to buy retail distribution, Onga said, “Now, we have no plans.” Smallwood immediately followed up by saying, “When you look at what’s happening in the marketplace, you have to look at it (especially) with the retail consolidation of dealers. But it is a big step for somebody our size to swallow this.”
When asked if Falken planned to sell tires directly online, Smallwood had a quick response: “No!”
Smallwood may have best summed up the company’s current position with one comment. “We’re not just a brand anymore, we are a manufacturer.” ■
