Last year, Koji Ikawa, CEO and president of Yokohama Tire Corp., announced the company had very aggressive plans for the United States market. An increase in its dealer network, predominantly made up of independent tire dealers, was a must. "We want to increase our profitability and market share," he said. And domestic original equipment fitments were long-term goals, although the first step in increasing its OE presence had been taken.
One year later, how far has Yokohama progressed? Its dealer network has held steady. Profitability was down, while only its light truck tire market share in the U.S. was up. And the company's OE fitment dreams, at least in the near-term, have yet to be fulfilled.
According to Yasuo Tominaga, president of Yokohama Rubber Co. Ltd., one of the challenges faced by its North American subsidiary is "a strategic reorganization." With that in mind, we asked Ikawa about his plans for Yokohama in 2002 and beyond.
MTD: Last year, you said Yokohama planned to increase its OE presence on vehicles manufactured domestically. Could you please update us on yourprogress? Is your parent company's joint venture with Continental AG helping you make in-roads with domestic vehicle manufacturers? Is Isuzu still the only North American-made vehicle you supply with Yokohama brand OE tires?
Ikawa: It is possibly premature to report on the progress of the alliance and joint venture since it is only a few months old. Only the Japanese domestic and original equipment auto makers are part of this agreement. And yes, currently, Isuzu is the only North American customer of Yokohama Tire Corp.
MTD: We hear from commercial dealers that Yokohama has had medium truck tire supply problems. If true, what is being done to increase supply? Is the GTY (General-Toyo-Yokohama) plant in Mount Vernon, Ill., satisfying your needs?
Ikawa: We have not been experiencing supply problems. Our "fill rate" is in the upper 90 percentile, which is above the industry average. Our supply from both Yokohama Rubber Co. and from GTY is as planned and on target this year.
MTD: Are there any plans to increase manufacturing in the U.S., either by expanding your existing facility in Salem, Va., or by building or buying another plant?
Ikawa: Currently there are no plans to expand capacity beyond our Salem, Va., facility nor above our current production levels.
MTD: What are your plans for the Mohawk brand?
Ikawa: Mohawk is an associate brand of Yokohama and is marketed exclusively through the Friend Tire subsidiary. (Editor's note: Friend Tire Co. has six warehouses serving independent tire dealers in 22 states.)
MTD: Is the tuner market still a top priority for Yokohama? Are you introducing any new products for this segment?
Ikawa: Yes, the tuner market continues to be a top priority. Recently, we introduced our latest technology product to this market, the Parada Spec II.
MTD: How do private brand marketers -- Del-Nat Tire Corp. is one of your customers -- fit into your strategy?
Ikawa: Private branding accounts for a significant share of the United States tire market demand. Yokohama is actively engaged in the private branding. It will continue to be a core value of our distribution strategy.
MTD: Do you sell through distribution channels other than the independent tire dealer channel?
Ikawa: Yes, we market to other channels including mass merchandisers (Sears Auto Centers), national fleets, truck stops, mining and construction companies, to name just a few.
Currently we are pleased with our channel distribution mix. We are always alert to changes within the channels and make adjustments so that our products are available to the retail users.
MTD: What are you doing to help independent tire dealers?
Ikawa: The dealer channel customers are our primary focus and priority. We continually work to improve our product offerings and the quality of our relationships. By "quality" we mean better and quicker service deployment, faster and easier transaction times from our field sales and dealer service groups, and any way we can add value to the overall relationships.
MTD: Thanks, Mr. Ikawa.
