Michael Graber, president and CEO of Toyo Tire U.S.A. Corp., says the U.S. market has returned to pre-pandemic levels. He discusses how Toyo is navigating this “new normal.”
MTD: When we met with Toyo executives during last year’s SEMA Show, we were told that Toyo’s sales were up double digits. Did this momentum carry over into the first half of 2024 and if so, what do you attribute that to?
Graber: We had a very good year in 2023. We were up significantly. We finished with 10% growth over 2022. But this year it’s flattened out. It’s gotten more normal... (back to) pre-COVID-19 norms. We were up slightly above last year through April.
I think dealer and distributor inventories are high, which is slowing our pace of selling tires into the market. But sellout at retailers has been very solid, so tires are going out. The Open Country A/T III EV is one of our new products that’s been well-received in the market. (Editor’s note: Toyo unveiled this tire in November 2023.) There’s a limited scope of who would buy that tire, but the people who are interested in that tire are buying it.
MTD: Do you have plans to introduce more electric vehicle (EV) tires?
Graber: We have tires under development for EVs in all segments. We believe it's a market that isn't going away. The innovation that’s required to be in the EV space benefits all product segments – whether it’s fuel economy, range, noise suppression or (overall) design. Working on EV tires and coming up with solutions that customers want benefits everything.
MTD: Toyo’s plant in White, Ga, entered phase five of its development in 2023. What does that entail? Has the plant maxed out?
Graber: As far as adding new phases, it’s fully built-out at this point (due to) space constraints. We really don’t have room at that plant to add more phases. But we’re becoming more efficient in Georgia because of our global capacity ... (which includes) opening our plant in Serbia. (Editor’s note: Toyo opened a consumer tire plant in Serbia in 2022.)
We also source tires from Japan and Malaysia. The ability to move tires around and build them in the most efficient way possible has given us the opportunity to build more of what North America needs at our Georgia plant.
MTD: Can you bring us up to speed on the Serbia plant and how that factory is supplementing Toyo’s U.S.-based production?
Graber: Serbia is up and running. It's producing tires as planned. Full capacity is five million tires. We expect to get a significant portion of those. (The Serbia plant) is more of a complement to the Georgia plant than a replacement. It’s more passenger car-tire focused. We’re building more broadline passenger tires in Serbia and that frees up more space to build light truck tires in Georgia.
MTD: Are most of Toyo’s TBR tires for the U.S. market still imported from Japan?
Graber: One hundred percent of our TBR is imported from Japan.
MTD: How is Toyo working to expand its TBR business in the U.S.?
Graber: We're gaining share, so we’re happy. That’s one way to keep score in a flat or declining market. We continue to invest in new developments for TBR, with the goal of constantly improving cost-per-mile for the fleet user. That’s really the ultimate goal with TBR.
We’re calling on fleets. We’re in the market, selling tires (through) dealers. We’re going to fleets and talking about the benefits of Toyo. We feel like we’re doing a good job. Customers are buying and they believe in our product. It’s a very good investment for them.
MTD: What’s your take on the overall state of the U.S. tire market, including consumer tire demand, as we enter the second half of the year?
Graber: I think demand is returning to pre-COVID-19 levels. We’re not seeing the spikes, high or low, that we saw during the last four years. It’s growing at a normal pace, so we’re reverting back to pre-pandemic business cycles.
The one caveat is the economy. I think we’re all watching the economy, with interest rates and inflation. It might change some buying habits. But we’re expecting the market to behave as it did historically.
We’re looking to constantly innovate and invest - being the best partner to our distributors and dealers that we can be.
