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Kumho Promises Dealers a Stable New Year

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Kumho Promises Dealers a Stable New Year
"Consistent. Stable. Dependable.” Those three little words detail the outlook and plan for Kumho Tire USA Inc. in 2017, said Jim Mayfield, executive vice president of sales and marketing.

The biggest news is Kumho is taking a break from its recent rapid-fire introductions of new products. After 11 new tire lines in the past two years, including four unveilings at the 2015 dealer meeting,

Mayfield said the company does not plan to roll out any new tires in 2017. “I think maybe it’s time to let you have some digestive time so you can get these products programmed to where you need them to be,” Mayfield said at the company’s latest dealer meeting in December.

“But we’re not stopping the product development process.” New and replacement products are already in development for 2018, including replacements for the all-season ultra-high performance Ecsta 4X II and the Crugen KL33 for CUVs and SUVs, plus a new mud-terrain tire.

“Our product replacement process will continue in a much more balanced and organized way. We don’t ever want to get back to a point of introducing 11 new product lines in less than two years. It’s too disruptive for us,” Mayfield said.

As for 2017, that “consistent, stable, dependable” motto means dealers will see no changes to their buying programs. The volume bonus and growth bonus plans are staying the same, and Kumho will continue to offer dealers marketing support funds they can access in the same manner as 2016.

Payouts and benefits of the Premium Fuel associate dealer program aren’t changing either, but dealers will see one enhancement in 2017. “Every product that says Kumho on the side — that you buy from us, Kumho USA — everything will count toward building brackets toward the Fuel dealers. So your sales people don’t have to keep track of what counts and what doesn’t count,” Mayfield said.

Another improvement coming for the dealer program is a faster way to process benefit checks at the end of each quarter. The goal is to return checks to dealers within two weeks.

Senior Marketing Manager Brian Gallagher and his team are building new creative assets to enhance dealer training on the company’s products, and the sales team has grown to include four consumer divisions, a commercial division and a growing sales operations team that is working on analytics.

Mayfield said, “We have to grow. There’s no hiding that. We’ve been pretty stable; 2016 I think with most of our customers we’ve had nice sales growth, but we’ve got to continue that in 2017.

 “I’m working with you to grow your business with us in a way that is good for you and good for us, and we’re going to be looking for new business as well. Kumho has to grow and we’re going to do it in a way that is manageable and not disruptive, but we are going to grow our business.”

Good indicators for the start of 2017

Stephen Ewing said market indicators point to 2017 being a good year for tire sales. Ewing, the market intelligence and pricing manager for Kumho, said retail gas prices and vehicle miles traveled have both shown favor on the tire industry. December was the first time in 2016 prices at the pump were higher than a year earlier, and those lower fuel prices have led “to a nice increase” in vehicle miles traveled. As of December, it was up 2.6% — an increase of 53 billion miles driven.

“If an average tire is 60,000 miles, that should be an additional demand of around 900,000 units through August,” said Ewing. “That didn’t materialize in the market so the question is then what does that mean? It probably means we’re going to have some nice demand in the coming months as the weather has turned and people realize ‘I need to replace these tires that have worn out.’”

Building the brand

The “consistent, stable, dependable” angle applies to Kumho marketing, too, said Gallagher. His team is working to apply a steady hand across all platforms through every month of the year.

A big focus is in connecting Kumho to its American hometown. The company calls Georgia “the new heart of Kumho Tire,” with its headquarters in Atlanta and its first U.S. plant now operating in nearby Macon. “We’re building our brand in our new home court; it gives us a lot of presence in the southern region. We want to start there and figure out how were going to build on that to get more exposure,” he said.    ■

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