Yokohama Off-Highway Tires America Prepares for Big Year
Yokohama Off-Highway Tires America Inc. (YOHTA) - until recently known as Alliance Tire Americas Inc. - is preparing for a big 2021 with the roll-out of new products and further refinement of its “one stop shop” concept, consolidated under the Yokohama banner.
In this interview, YOHTA President Dhaval Nanavati discusses all of the above, in addition to support that parent company Yokohama Rubber Co. Ltd. (YRC) is providing, the state of demand in the markets that YOHTA serves and more.
MTD: Why was the decision made to rebrand Alliance as YOHTA? What are the benefits for both the company and its dealers?
Nanavati: Yokohama, our parent company, decided to put everything under one umbrella to focus on customers in the off-highway arena. This leverages the strong legacy of the premium Yokohama brand and its 100-plus years and also leverages the continued strength of Alliance. We believe this merger presents a huge value for our customers, our employees and our business in general. We think this will create a huge value for all of our stakeholders. One, it creates a focus on the strength of each entity - the old Alliance Tire Americas and the old Yokohama Tire Corp. OTR business coming together under YOHTA. It also (provides) a single point of offering for all of our commercial products, from small tires to large mining tires, forestry tires, construction tires, industrial tires, etc. It’s a one-stop shop for all the needs of the customer. It also offers a single program for all of our brands - for old customers and new customers. It leverages and pools resources, data, IT - all under one roof - again, under the Yokohama brand. The new entity offers products at multiple price points to meet our dealers’ needs. Each segment has a full portfolio and each portfolio has a complete product line. So if you look at the number of SKUs and segments we play in now - about 4,000 SKUs, covering almost every OTR segment - it’s a complete package for our customers. Eventually, as we progress, we will have a simplified supply chain to the last mile. We are very excited in terms of what this merger brings to the market.
MTD: Looking at distribution, are there plans to open more distribution centers in North America?
Nanavati: We keep evaluating that on a continuous basis. We did elect to incorporate two of the Yokohama distribution warehouses - Columbus, Ohio, and Winder, Ga. - in addition to our four-U.S.-and-one-Canadian-warehouse structure that existed prior to the merger.
MTD: YOHTA is now in the medium truck market in the U.S. with the Galaxy line. Are you pleased with the line’s acceptance?
Nanavati: We are very pleased with the roll-out. The product has been out for over a year. The acceptance in the market has been great. It’s actually a very complementary product to our wide range of off-highway products. The Galaxy TBR products have been perceived as a high-quality offering, giving outstanding value and performance.
MTD: You have maintained a very robust new product launch schedule on the ag tire side with the Alliance brand. Will we see more in the new year?
Nanavati: Yes. We have aggressively launched new products. I would say that new products have been the DNA of our company. We target a certain percentage of growth every year. We want to be a leading player in terms of tire engineering and application and continue to offer unique products to customers to help them improve productivity and reduce costs.
MTD: What can we expect to see from the Galaxy OTR brand in 2021?
Nanavati: On the Galaxy OTR side, we have an exciting line-up of new products, which we are planning to launch throughout 2021. It will be a very big year for the Galaxy OTR range. We also are launching several products in the Yokohama brand and will expand the offering into a new segment.
MTD: On the OTR side, are you positioning the Yokohama brand above the Galaxy brand in terms of pricing?
Nanavati: Yes. There is definitely going to be a two-tier approach, with two tier pricing. Yokohama will be the premium segment and Galaxy will be the value segment we are focusing on.
MTD: How is the new plant in India coming along? Is it still on track to begin operating during the first quarter of 2023? (Editor’s note: this past September, Yokohama announced that it will build a new plant in India - a $165 million investment. Yokohama has two other tire manufacturing plants in India.)
Nanavati: YRC is supporting investment in our new factory, which is on the east coast of India. Construction has started and we estimate shipping new tires out of the plant in early- to mid-2023. YRC continues to support investment to augment capacity at our existing plants, as well. Every year, we invest in our (other) factories in India on a very consistent, regular basis.
MTD: Are you optimistic that the markets that your company serves - such as agriculture, construction and trucking - will continue to see healthy demand?
Nanavati: We have seen very robust demand in OE and the aftermarket. We are very optimistic for the first half of 2021 and cautiously optimistic for 2H 2021. As far as capacity, we are running to meet demand. Our goal is to deliver the right tire to the right place at the right price. And we have been able to deliver this value proposition to our customers. We did see some challenges, I would say, in some shipping lanes. But I would say our supply chain team has been able to successfully navigate these challenges.
MTD: From an operational standpoint, will YRC allow YOHTA to operate autonomously?
Nanavati: We are a Yokohama company and we are a company focused on North America. We have our own staff locally and we make our own decisions - of course, reporting to the corporate structure. YRC intends to keep YOHTA independent. We will have a very strong sales and support structure. And eventually, through the year, we will work on simplifying the supply chain.