Kumho Adds Capacity for LT Tires; Discusses New Factory, Marketing and Branding
Everything from tires to marketing will be new for Kumho Tire USA Inc. in 2016. The company previewed the coming year at its annual dealer meeting in Castries, St. Lucia, Dec. 2-5, 2015
The Ecsta PS91 will be Kumho’s flagship ultra-high performance tire in the United States, according to Jim Mayfield, executive vice president of marketing and sales. The PS91 will debut in 49 sizes in 18- to 21-inch rim diameters with a Y speed rating and no mileage warranty.
The Ecsta PS31, a value-priced summer UHP tire, will be offered in 49 sizes in 14- to 18-inch rim diameters, V and W speed ratings and no mileage warranty.
The Crugen HT51, an all-season light truck/SUV product, will be available in 39 sizes, 15- to 20-inch rim diameters and R, S and T speed ratings. The mileage warranty has not yet been decided.
Kumho’s Ecsta V720, an ultra-high performance tire that is original equipment on the fifth generation Dodge Viper, will be available in 17 sizes in 15- to 19-inch rim diameters, V, W and Y speed ratings and no mileage warranty.
Better product launches
Mayfield said the rollout of the four tires will be smoother than last year’s launch of six tires.
“Introducing six new product lines in a very short period of time created some challenges for our customers as they transitioned from one product to another. We learned in 2015 how to do it more effectively and efficiently.”
Mayfield said Kumho has opportunities in every segment of the market. In particular, the company sees potential for substantial growth in its light truck tire portfolio.
More capacity for LT tires
Kumho’s first factory in the U.S. begins production this month. Original equipment and replacement tires will be produced at the Macon, Ga., plant, which will have annual capacity for 4 million tires.
Some of the tires produced at Kumho’s factories in Korea and Vietnam will come to Macon. “In Vietnam, we’ve expanded our capacity to make light truck tires. We’re also doing some transitioning in our Korean factory to make more large rim diameter passenger tires. So the combination will allow us to get a richer mix of product. We’re very excited about the additional capacity for light truck tires for the U.S. market,” said Mayfield.
Kumho recently moved its headquarters from California to Atlanta. The Atlanta office places corporate staff near the new factory and a distribution center in nearby McDonough, Ga.
Improving dealers’ margins
Kumho’s initiatives include repositioning the price point of its products. Part of that effort involves rolling more of Kumho’s discount structure into the tire’s invoice price. “We’ll still have support dollars available, but we think it’s essential that we get more on invoice to help us move forward and grow the business,” said Mayfield.
Shaun Fitzgerald, wholesale general manager for Flynn’s Tire Wholesale, a division of Flynn’s Tire Group, said the change will help. “Putting more money into the invoice cost rather than back-end tiered growth programs is positive for us. It’s nice to know what your cost is going to be as opposed to not knowing what you will earn.”
NBA strategy evolves
Kumho attributes a 16.5% increase in brand awareness from 2013 to 2015 to its professional basketball sponsorship. The company began a three-year agreement with the NBA and the NBA Development League in 2014.
Up to now, the sponsorship has been a national branding campaign. In 2016, Kumho expects to add individual team sponsorships in two or three local markets that will create retail promotion opportunities for dealers.
New era begins
Kumho CEO and President Harry Choi said the new tires, factory, headquarters and marketing give the company the right to use the term “new era.” The company is even rolling out a brand identity built around a new slogan: Kumho Tire Better, All-Ways.
“We challenged ourselves to reinvent our organization and our brand in North America,” said Choi. “This new era gives us a chance to start fresh and to build a better company and be a better partner and better friend to our customers.” ■