New Tires, Marketing and Factory Mark a New Era for Kumho
What's new for Kumho Tire USA Inc. in 2016? Almost everything from its tires to its headquarters. The company previewed the coming year at its 2016 dealer meeting on the Caribbean island of St. Lucia.
Kumho will continue to rebuild its product portfolio by launching four tires in March 2016. One of them, 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.
A value-priced summer UHP tire also will be released. The Ecsta PS31 will be offered in 49 sizes in 14- to 18-inch rim diameters, V and W speed ratings and no mileage warranty. The PS31 will replace the Ecsta SPT KU31.
“We will have a premium product and a price point product you can take to market as a summer tire,” Mayfield told dealers.
The third tire is the Crugen HT51, an all-season light truck SUV product. The HT51 will be available in 39 sizes, 15- to 20-inch rim diameters R, S, and T speed ratings. The mileage warranty has not yet been decided. The HT51 will replace the Road Venture KL51.
In addition, an SUV/LT highway performance summer tire will join Kumho's portfolio. The Crugen HP91 will be available in 51 sizes in 16-inch to 22-inch rim diameters, H, V, W, and Y speed ratings with no mileage warranty.
The four tires to be launched in 2016 follow the release of six tires in 2015. “Dealers need to see refreshment of the line,” says Leon Sawyer, brand director for American Tire Distributors Inc.
“From an independent dealer perspective, one to two launches in one year works out. With six launches, keeping up with features and benefits can be challenging. It took longer to see good, positive movement as far as sales, but we are seeing that now.”
New factory and headquarters in Georgia
In January, Kumho will begin producing tires at its first plant built in the U.S. The new facility is in Macon, Ga., and will have the capacity to produce 4 million tires a year. It will produce original equipment and replacement tires.
As capacity increases at the Macon plant, Kumho will increase production of larger rim tire sizes at its plants in Korea and Vietnam. “That’s going to help us substantially,” says Mayfield. “The market for larger rim diameter sizes continues to grow. We have to be able to keep up. That’s been an issue in the past for us. We can’t make enough 18-, 19- and 20-inch tires. That will be changing. We’re going to have capacity.”
The company recently relocated its headquarters from California to Atlanta. The Atlanta office places corporate management and support staff near the new factory as well as a distribution center Kumho operates in nearby McDonough.
Robbie Rudolph, owner of Rudolph Inc., a wholesale company doing business as Rudolph Tire, is looking forward to the new products. His company, which serves about two-thirds of the U.S. from Murray, Ky., has distributed Kumho tires for about 20 years. “We really like Kumho. The changes they are making are positive. The Macon plant shows they are committed to the U.S., and we are excited about that.”
Improving dealers’ margins
Kumho’s initiatives in 2016 include repositioning the price point of its products. Part of that effort involves rolling more of Kumho’s discount structure into the invoice price of the tire, according to Mayfield.
“Many of you have said that too much of our program was behind the lines. It’s hard to know how much you are actually going to be able to benefit from it. It depends on volumes and growth, so it’s hard to count on,” Mayfield told dealers. “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.”
Shaun Fitzgerald, general manager wholesale for Flynn’s Tire Wholesale, a division of Flynn’s Tire Group, says 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 to be the official tire of the NBA and the NBA Development League (D-League) in 2014. Up to now, the sponsorship has essentially been a brand building and image awareness campaign. That will begin to change in 2016, according to Mayfield.
“We will be looking to evolve our NBA sponsorship from a national branding campaign and look at some local markets with NBA teams to start doing some local activation to run sales promotions,” he says. The company expects to have individual team sponsorships in two or three local markets in 2016 and plans to add more local markets in 2017. The individual sponsorships will create retail promotion opportunities for dealers, such as awarding tickets to an NBA game for the purchase of four tires.
The company also is beefing up ways it supports dealers in their local markets. A web-based “ad-builder” tool will be rolled out in 2016 which dealers can use to create custom co-branded print ads and web and social media content, including videos. New showroom components and point-of-sale material will be available, too.
A new era begins
Kumho CEO and President Harry Choi says new tires, factory, headquarters, and marketing activities give the company the right to use the term “new era.” The company is even rolling out a new brand identity built around a new slogan: Kumho Tire Better, All-Ways.
“There is one message I have repeated to our team: Cha Cha Cha,” says Choi.
“Cha Cha Cha stands for challenge, change and chance. We challenged ourselves to reinvent our organization and our brand in North America. We have made the changes to begin a new era for Kumho Tire in Canada and in the U.S. 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.”