China goes for the green: Imported lawn and garden tires are built with U.S. influences
Across the sea, China tire plants pump out specialty tires earmarked for U.S. soil. The question is, how do the companies know what will sell here? After all, China is mostly mountains and high plateaus, with about 66% of the nation's terrain unusable for agriculture.
That market difference is one of the challenges facing companies importing lawn and garden tires from China. Technology and shipping concerns are others.
However, importers report they overcome all hurdles with cooperation and constant guidance.
Input is imperative
According to Jenny Tsai, vice president of Greenball Corp., "The biggest challenge is that China does not know about lawn and garden tires, because there is not that same market over there. People don't own big houses with big lawns and backyards; hence they have no need for lawn mowers, etc.
"Chinese tire companies in general have little knowledge about the lawn and garden business. They need to be taught to understand that there are different treads for different applications," says Tsai. "Also, because they don't have this experience, they tend to also not have the equipment for these lawn and garden tires. When an importer such as Greenball decides to work with a Chinese factory, they will agree to invest in the capital equipment in the factory, perhaps agreeing to buy the molds -- to share the financial risk, the investment in the product."
The company says it used to carry Greenball Transmaster and Greensaver brands for lawn mowers, push mowers, snow blowers and wheelbarrows, but now it's more efficient for it to sell the manufacturers' own brands.
"This is mainly because they will keep stock in their own brands, and for them to keep stock in our brand is more expensive, and more risky in general. Also, we've found that brand name isn't a big concern for our customers."
Greenball buys lawn and garden tires from two plants in China: the Cheng Shin Xiamen plant in Xiamen, and Kings Tianjin Normandy Tire in Tianjin. Both plants are owned by Taiwanese companies, Tsai reports.
Jimmy Yang, president of Kenda USA, agrees that the market for lawn and garden equipment in China compared to the United States is vastly different. "China is a very populated country with little land to be spared for lawn purposes. Most of the land is fully developed for housing, industrial, commercial and farming purposes, so there are very few big areas of grass which demand the use of outdoor power equipment."
Kenda USA sells the Kenda brand of lawn and garden tires, although it also offers Loadstar brand high-speed tires sold for trailer purposes. The company's Kenda brand lawn and garden tires are made in the company's plants in Taiwan and Shenzhen and Kunshan, China.
Carlisle Tire & Wheel Co. has its own plant in China that produces lawn and garden tires, among other specialty tires. Carlisle acquired the factory in the early 1990s. "We brought their quality up to Carlisle standards," says Jeff Waechter, director of aftermarket sales for Carlisle, which owns the entire operation. "We run that plant just like we would run our plant in Carlisle, Pa. That's what we strive for."
Going one step further, Carlisle has installed the same molds in its China plant as it has in its domestic plant. "These are small bias tires. If there's a hiccup, like with container (shipping), we have the same tires available in Pennsylvania."
Waechter calls this "redundant capacity" one of the keys to Carlisle's success, especially with original equipment manufacturers.
Tireco Inc. markets and distributes commercial and residential lawn and garden tires under the Nanco and Trac-Gard brands, which are built mainly in China and Taiwan, says Emrah Taylan, Tireco marketing. "Our lines cover a wide range of applications such as trailer (bias and radial), utility/golf car, lawn mower, tiller, ATV, and light ag, etc."
Companies selling lawn and garden tires from China have many viewpoints on the technological advancements.
Kenda's Yang says the majority of lawn and garden tires are made overseas. "Tires made in our plants in Taiwan or China are all at very high and consistent quality, which meets U.S. quality standards. The manufacturing cost is somewhat more competitive due to the less expensive labor cost, which helps overall consumer spending by reducing product cost.
Greenball's Tsai feels there have not been enough technological advances in Chinese specialty tire plants over the last couple of years.
"Technologies are better in Taiwan. Most factories in China (owned by Chinese companies and not Taiwanese owners) will still only produce tube-type tires, instead of the more advanced tubeless tires. Most of the bigger tire factories in China focus on producing radial trailer tires. This is because most of the factories used to be controlled by the Chinese government; hence there was a big influence on what equipment they bought to produce which kinds of tires. In the last couple of years, the companies have opened up and are now allowed to be privately owned.
"The quality of tires produced depends on each plant," she says. "Some in China are competitive with Taiwanese products, and some are low grade. Thus it is very important for importing companies to visit the plants personally to check on the production line and quality control before doing business with them."
Overall, Carlisle's Waechter believes there have been improvements in the quality of Chinese-made lawn and garden tires. It's a matter of survival, he says. "You have to make improvements." At Tireco's plants, "We continually look to improve compounding, tread wear, traction, and ozone resistance," says Taylan.
China has a pricing advantage
Even though the tires are shipped overseas, the biggest advantage for buying Chinese-made lawn and garden tires is still the pricing.
"The low cost of labor makes for a less expensive product," says Tsai. "The disadvantage of a U.S. dealer buying from China is that the delivery time is not as stable as domestic factories.”
Shipping from China to the U.S. has gotten more expensive, says Carlisle's Waechter. "Container prices have gone up" due to rising fuel costs and other factors. However, "the emergence of super freighters has eased the burden a bit."
Greenball's Tsai adds, "Shipping tires from China to the U.S. is easier now than it ever has been. This is mainly because the major carriers like Hanjin and Evergreen, etc., are opening up more and more offices in China. This makes it a bit less expensive and easier logistically to bring the product over. In the past it was a big limitation.
"Regulations have loosened in the past few years. Also, as more and more carriers add those routes to their schedules, it will slowly bring the price (for shipping) down."
Kenda USA's Yang says, "The ships are actually sailing faster than what they used to, so it takes fewer days to arrive. But with importing growing so quickly, it is sometimes very difficult to secure container space on a timely basis. But, overall, it is not too difficult because the information system has been improved dramatically."
"Shipping to the U.S. is always a challenge, but having extensive knowledge, experience, and long-term shipping partners has made this process easier for us than most others," says Tireco's Taylan.
Taking advantage of advantages
For dealers thinking of selling specialty tires from China, Tireco's Taylan says this: "Chances are you are already selling Chinese- or Taiwanese-made specialty tires and may not be aware of it. The vast majority of U.S. domestic production of these products has all but disappeared due to cost. The very few U.S. companies that were manufacturing tires here have shifted a significant portion of their production to overseas factories. The perceived quality difference between a U.S.-made product versus our Asian-made product is all but non-existent."
Tireco's Taylan adds, "Our goal is to continue to enhance and improve our products through better design and construction. Our extensive dealer network continually gives us product feedback and we, in turn, use this information to improve our products. Fortunately, we've been in this business for over 30 years, so our facilities understand the importance of quality, technical improvements, and workmanship."
China at a glance: Country is changing with the times -- for better or worse
China makeup, courtesy The World Factbook:
Parts of the whole: China is divided into 23 provinces, five autonomous regions, four municipalities under the direct jurisdiction of the Central Government, and two special administrative regions. The Capital of the People's Republic of China is Beijing.
Provinces: Hebei, Shanxi, Liaoning, Jilin, Heilongjiang, Shaanxi, Gansu, Qinghai, Shandong, Jiangsu, Zhejiang, Anhui, Jiangxi, Fujian, Taiwan, Henan, Hubei, Hunan, Guangdong, Sichuan, Guizhou, Yunnan and Hainan.
Autonomous regions: Inner Mongolia, Ningxia, Xinjiang, Guangxi and Tibet. Four municipalities: Beijing, Shanghai, Tianjin and Chongqing.
Special administrative regions: Hong Kong and Macao.
Population: China is the world's most populous country with a population exceeding 1.2 billion, which makes up almost a fifth of the world's total.
Terrain: Mountains, hills, highlands, plains and basins. The highlands and hill regions account for about 66% percent of the country's land mass.
China's trade surplus may hit a new high of between $120 billion and $130 billion U.S. dollars in 2006, economists note. However, things may be changing.
In a recent article in The New York Times titled "Rising Production Costs Join the List of What China Exports," an economist was quoted as saying "we may well be reaching a situation where prices of both commodities and manufactured goods will go up."
Historically, the "cheap labor and easy access to a first-class port in Hong Kong allowed China to flood the world with inexpensive goods," the newspaper reported. "But as labor shortages develop, Chinese workers are starting to demand more money, adding to cost pressures from more expensive commodities and creating the classic conditions for rising export prices."
Also, China is not immune to the rising prices of raw materials, as well as the price of oil and wages. On September 1, the minimum wage is expected to increase by about 20%, to 780 yuan ($98) a month, in one province with a heavy concentration in manufacturing. This may push the costs of goods 5% to 10% higher, according to the The New York Times article.
What affect this will have on trade remains to be seen.
Lawn and garden tires from China: Bill Hory is anything but 'carefree' about counterfeiting
Bill Hory is very familiar with the Chinese specialty tire market. The longtime industry veteran and general manager for Carefree Tire LLC says lawn and garden tire exports from China, including his own, increase every year. Most of the time, the tires are, indeed, his. Sometimes, however, they are counterfeits.
Counterfeiting "is a way of business there," he says. "It is no different than when industry first began in this country. It's a naive business person to think otherwise."
Hory first visited China after Carefree began supplying lawn and garden and wheelbarrow tires to Home Depot and Lowe's seven years ago. "I heard about people copying our tire. By the time I made my first trip to China, they showed me a counterfeit of the tire. They knew what they were doing, but (in China) it's not looked down upon."
Chinese companies are "hyper-competitive," he says. "I worry about them copying my technology, but they worry about someone copying their technology and opening up around the block."
Carefree Tire, a subsidiary of Arnco Inc., produces half of its solid polyurethane lawn and garden and wheelbarrow tires at its Ohio manufacturing facility. The other half comes from China through a joint venture.
Tire quality "took a few years and a few missteps to get up to speed," says Hory. "Now it's very, very good. But it took a few trips and a few orders, and having someone there full-time cracking the whip."
Polyurethane solid tires represent about 1% of the specialty tire market in the United States, according to Hory. They are shipped whole from China, while pneumatic lawn and garden tires "come wrapped like pancakes."
Carefree is a major player in the $20 million solid tire market, although it recently entered the pneumatic polyurethane tire segment with its Ultralite line of foam-filled golf cart and utility tires.