Nokian Builds on Forward Momentum
New Products, Customers Are on the Way in 2022
"Momentum” might be the operative word at Nokian Tyres plc right now. Coming off a record year in which the company grew its Americas sales by nearly 40%, Nokian is expanding its product offering with the Hakkapeliitta R5 - the latest addition to its signature winter tire family - and its new Outpost line of all-terrain tires.
Meanwhile, Nokian’s plant in Dayton, Tenn., is running at full throttle. And the company continues to grab additional shelf space within its customer base.
Tommy Heinonen, Nokian’s vice president of sales, North America, and Steve Bourassa, director of products, discuss all of the above and more in this MTD exclusive.
MTD: The North American market enjoyed a huge rebound last year. What do you attribute that to? Did Nokian’s business follow suit?
Heinonen: You are absolutely right - 2021 was a great, great year for the industry in North America, as well as (for) Nokian Tyres. We can say we beat the market, so we gained market share. Our growth was double-digits in North America. We are very happy with how the year developed. Our team did a great job. Our partners - meaning our dealers - did an excellent job.
MTD: Were you able to grow your dealer base last year?
Heinonen: Yes. But we did not open as many new customers as (we) were planning because of the supply limitations that everyone was facing. We wanted to take care of our existing partners instead of opening up everybody we know. It’s a partnership and that means we don’t want to open customers (just) so we can say, ‘Hey, this is now open.’ We want a mutual commitment.
MTD: Nokian has been extremely selective when it comes to adding dealers to its network. Why has this been a successful strategy for the company?
Heinonen: We definitely don’t want to be over-distributed. We’re relationship-builders. We want to open long-term customer relationships. We don’t want to be the flavor of the month for somebody. That’s the way the business can be healthy and it enables our dealers to earn healthy profits.
MTD: Are there certain parts of the U.S. where Nokian might be under-indexed in terms of its dealer presence?
Heinonen: For sure. We are strong in winter tire areas and that’s easy to understand. But there are still several states in the south where we still have a lot of opportunities.
MTD: Nokian has maintained a regular schedule of new product introductions. Several tires were introduced last year, including the Nokian One, and there have been more recent introductions. Why is it important to keep rolling out new products?
Bourassa: Because we’re a leader in the winter tire segment, we want to keep our winter products fresh. We want to make sure we have the latest technologies to bring (to market) in that segment. We’re aiming to serve as a leader in all-season innovation, too, by using robust investment in research and development, guided by feedback from our customers and from consumers - trying to get a fairly quick turnaround on making product improvements.
MTD: Can you bring us up to speed on the Dayton plant?
Heinonen: Dayton is helping us and is contributing more and more, day after day. It’s very vital for our business. Dayton produced roughly a million tires in 2021 and we are on a growth path for this year and then ramping up production all the time, as planned. We are utilizing existing machinery and there are more investments coming.
MTD: What opportunities does Nokian see in 2022?
Heinonen: Even though we have been growing with our existing customers, there are still a lot of things we can do with them. We are developing and deepening our relationships with existing customers and making sure we are maximizing our in-store shares with customers. And we are all the time scouting opportunities to open new accounts in places where we have white spots on our map.
Bourassa: 2022 will definitely be very exciting from a tire perspective. We have our new Outpost family of products, (including) an all-terrain product that comes with an improved size range and better looks that I think is going to be accepted by our customers. We have a new Outpost APT that’s diving into a new segment. And then we have the new Hakkapeliitta R5 also coming this year.
MTD: Right now, demand is really good. Do you think the current demand trajectory will continue in North America?
Heinonen: Our dealers are indicating strong demand and so far no dealer has been commenting that demand is declining. But of course, everyone can understand that this can’t continue forever. I’m expecting this is the year when (the market) will normalize and demand and supply will be closer to each other.