What economic recession? The forecast is sunny, say Kumho executives
If you had the foresight to stock extra 225/50R17 ultra-high performance tires or 225/65R17 P-metric light truck tires last year, chances are you sold them all. Domestic shipments of those two sizes increased dramatically in 2008 compared to 2007. Conversely, shipments in broad-line size 215/70R15 dropped by more than 1 million units year to year.
Changes in size popularity may not happen overnight, but they can happen rapidly. Rick Brennan emphasized the trends he sees in the marketplace at Kumho Tire U.S.A. Inc.’s recent dealer meeting in Punta Cana, Dominican Republic.
Brennan, Kumho’s vice president of marketing, said the demand for size 225/50R17 coincides with Toyota Camry sales, which outpaced the industry last year. The same can be said for another UHP size, 215/55R17, which is original equipment on the Honda Accord.
He said the crossover vehicle segment is gaining steam, and “moving pretty quickly to 55 series, 19-inch sizes.”
Even though fewer vehicles are being produced and sold in the United States, fewer are being scrapped, so the number of vehicles in use is increasing, according to Brennan. There are three million more cars and two million more light trucks on the road than there were in 2007.
By 2013, the number will increase another 14.5%, to 283 million vehicles. “It isn’t all doom and gloom.”
Total mileage driven in the U.S. dropped 4% last year. That equates to 580 miles less per vehicle. “As far as we’re concerned, (drivers) are still wearing out tires,” he said.
Targeting market share
J.B. Kim, who was named president of Kumho Tire U.S.A. Inc. late last year, has straightforward goals for 2009. He wants to increase tire market share overall, and UHP market share in particular. “I’d like to enhance our market share up to 10% if possible over a short time,” he says.
Despite the one-year delay in the construction of Kumho’s tire plant in Bibb County, Ga., Kumho has the supply. Its production capacity — 64 million tires a year — is at an all-time high, and will increase to 77 million tires by year’s end.
The company’s Vietnam plant, which opened last year, is supplying the U.S. primarily with replacement radial light truck tires. In addition, Kumho will receive radial truck tires from a new plant in China.
Kim promised the dealers “improved availability” of Kumho UHP and LT tires.
“Only together can we accomplish our goal of becoming a top five tire manufacturer in the world by 2015.”
Road Venture SAT
Kumho has high hopes for its latest consumer tire, the Road Venture SAT. The all-terrain tire, available in both P-metric and LT sizes, is targeted “for the active family,” according to Charles Van Huesden, manager of training and product planning. It features the following:
• Kumho ESCOT casing technology for ride comfort and steering response.
• winter tire traction, as evidenced by the mountain/snowflake weather symbol on the sidewall.
• a semi-center rib designed to provide steering stability and a quiet ride.
• tie bars for tread block stiffness.
• rotation wear indicators strategically placed across the tread surface area.
The premium tire, which competes against the likes of the Bridgestone Dueler A/T Revo and Michelin A/T II, targets vehicles like the Cadillac Escalade, Chevrolet Tahoe, Ford F-150, Honda Ridgeline, Toyota FJ Cruiser and Toyota Tundra. It is available in 15 S-rated passenger tire sizes ranging from P225/75R15 to P275/65R18. An additional 10 LT sizes, ranging from 30x9.50R15 to LT285/75R16, also are available.
In addition to the SAT, Kumho said its 2009 marketing plans call for the continued push of its Ecsta LX Platinum line, which was introduced last year. Both are premium tires marketed at premium price points.
“Together they are really a new position for Kumho — a premium price point to start elevating the position,” said Brennan. ■
Marketing changes -- What to expect from Kumho
At the annual Kumho Tire U.S.A. Inc. dealer meeting, Jim Milhaupt, national vice president of sales, outlined a number of changes in the way Kumho will come to market in 2009. He told attendees that the company will:
• ship weight quantities less than its previous minimum, 6,000 pounds;
• notify dealers as soon as the new B2B Dealer Web Site is ready (hopefully by the end of March, said Milhaupt);
• increase its regional marketing budget over the next three years;
• continue its FUEL associate dealer program;
• add one module to its EDGE (Education Driving Growth Excellence) training program;
• focus its motorsports involvement on ALMS, CORR and Solo II/club racing.
Kumho’s sales in the United States were down in 2008 vs. 2007. “It is our intention... to grow our business substantially over the next year,” said Milhaupt.