Kumho: Fueling growth in 2013
Kumho dealers got a preview of new tires, new programs, a new web portal and marketing changes at the 2013 Kumho Tires Dealer Meeting last month in Cancun, Mexico. There were the 40 key North American dealers in attendance, including 32 from the U.S.
“Fuel for the future” was the theme of the meeting and Kumho Tire U.S.A. Inc. announced two new replacement tires for 2013. In the first quarter of the year the company will launch the Kumho Sense KR26 all-season touring tire. A yet-to-be-named new replacement for the Ecsta AST UHP tire will be launched in Q3 2013.
The Kumho Sense touring tire is positioned below the Solus KR21. The H-rated tire will come in 28 sizes ranging from 13- to 17-inch rim diameters. It features a symmetric pattern and will come with a 40,000-mile warranty.
John Mosby, Kumho’s product planning coordinator, said the Sense’s circumferential and lateral grooves offer water evacuation for traction, and its variable pitch tread block offers a quiet ride.
Kumho may not yet know the name of the Ecsta AST’s replacement, but Mosby was able to tell dealers that it will be available in 27 sizes ranging from 15 to 18 inches with a V rating. The high-performance all-season tire will feature a directional tread pattern and will come with a 55,000-mile warranty. It will be positioned below the Ecsta 4X (KU22).
Mosby said it will have a directional tread design that maintains low noise throughout the life of the tire. Heavy sipe density on shoulder and tread blocks and large cross grooves will provide traction. A balanced tread compound will offer long mileage; variable pitch shoulder blocks offer performance and low noise.
Kumho also had good news for its commercial dealers. Initiatives include a renewed focus on medium radial truck tires and the new KMD41 mixed service drive tire. It replaces the KFD04.
The KMD41 is designed for use on dump trucks, cement mixers and garbage trucks. It has a maximum speed of 65 mph. The tire’s compound has been updated for better cut and chip resistance. It is available in sizes 11R22.5 and 11R24.5.
To keep up with demand for Kumho’s popular tires, the company is enjoying a benefit to the end of President Obama’s Chinese tire tariff, which expired on Sept. 26, 2012.
“The end of the Chinese tariff has made it possible to utilize our available capacity in China to keep supplying all your needs and maintain the highest fill rates,” said Kumho Tire North America’s President and CEO J.B. Kim.
“We have listened very closely to your input and we are excited about the opportunity to extend our sales with you. We are here to focus on helping you in 2013 through new programs and new products.”
Those programs were outlined by David Koh, Kumho’s marketing manager. He told dealers the company will reduce its sports marketing efforts in 2013 to focus on dealer support. However, Kumho will remain the official tire of the U.S. Soccer Federation, as well as the Los Angeles Lakers.
To support its dealers, Kumho will offer a $50 consumer rebate program for its Ecsta LE, LX and 4X that will be backed with print advertising. Dealers can also take advantage of the newly enhanced Premium Fuel Program, which expanded from 6 Ecsta tread patterns to 14.
Koh covered marketing initiatives in 2013 that include an expanded signage program, plus the highly visible Ride and Drive Traveling Show that includes the Safe Teen Driving tour. Kumho’s Game Changing dealer incentive program now offers cash rewards at 75 units and covers all Kumho products.
Koh also covered the new Kumho Dealer Portal that is a one-stop shop for dealers and distributors. The site includes training, promotions, POS materials, an image library, an ad builder, product videos and a chat forum.
The Kumho social network
Megan Wentz, Kumho’s marketing communications coordinator, gave dealers a look at where the rapidly changing world of social media is heading. She said that Kumho’s increased social media PR efforts in 2012 resulted in 170,000+ Facebook followers, a very good thing for brand awareness.
Wentz also invited dealers to join Kumho’s new Brand Ambassador Outreach program that includes press releases, advisories and media pitching to help retailers target consumers. The program helps wholesalers by informing dealers about Kumho promotions and program enhancements.
“We want to partner with you to help all of us receive greater market awareness,” said Wentz. “Through these efforts and partnerships, we will be able to successfully build our businesses and our profits as we sell Kumho tires together.”
Consumed disposable income
Rick Brennan, Kumho’s vice president of marketing, explained that the current consumer trend of hanging on to vehicles longer has kept tire sales flat. And the money consumers have to spend on tires is getting tighter and tighter. “In 2010 and 2011, 93% of the wage increases in the U.S. went to the top 1% of wage earners. That means 99% of the population didn’t get much.”
Brennan said consumers are spending more on cell phones, which many feel is a necessity to operate in today’s world.
“His phone bill has gone from about $20 a month when he had a land line, to $100 a month for a smartphone and data,” said Brennan. “Now he has to choose. Tires are not going to be something he wants to spend on.”
Brennan said consumer driving habits are also changing, especially where they drive and how often. Consumers are driving less and for shorter distances, and fewer young people are entering the driving world, opting for public transportation in metro areas.
“When you go back to the year 2000, we sold around 199 million passenger and light truck tires,” said Brennan. “In 2011 we sold about 201 million so it was flat over an 11-year period, even though there are more cars in the marketplace and there’s a bigger population.”
Brennan also said the company is shifting resources to focus on its dealers.
“As we’ve looked at what’s happening in the marketplace, we realized we need to refocus,” he said. “We need brand building, but we’ve done so much in the last two to three years that I think we needed to refocus and re-categorize our resources so we could better serve our dealers.” ■