Giti Tire (USA) Ltd. is doubling down on its commitment to the United States market. “Our presence in America over the last decade has been redefined,” says Wai Yeen-Phang, the company's CEO.
Phang - along with David Poling, Giti Tire’s director of tire development and product marketing - recently sat down with MTD Editor Mike Manges in Las Vegas, Nev., to discuss the company's performance, production, product plans, dealer strategy and more.
MTD: Describe Giti Tire’s performance in U.S. this year...
Phang: I would say that our challenges are just like anyone in this industry as we have gone through the last few years. We had the pandemic. Then we had global supply chain disruptions. Our challenges were the same as everyone’s challenges. But most importantly for us, we kept focus on our objective.
If you look back, we have been in the market for more than 25 years. At this stage in the lifecycle of our organization, we made the decision to reinvent our global manufacturing footprint. This led to repositioning and realignment and the coming onstream of our plant in Chester County, S.C.
We have built a very substantial market in the U.S. and it’s obvious you need to have a manufacturing base where the market is. Over time, this will help alleviate the supply situation. We have stayed focused on this direction and that is the core substance of our business.
MTD: What role has the South Carolina plant played in Giti Tire's growth? (Editor's note: Giti Tire opened its first-ever U.S.-based manufacturing plant, a passenger tire production facility located in Chester County, S.C., in 2017. The plant has the capacity to produce 15,000 units per day, according to MTD research.)
Phang: The factory came to life in October 2017. Since then, the first phase of development of manufacturing has been ongoing. To set up a tire factory and for it to reach its first stage of maturity will take about a decade and we are halfway there.
The most important thing (has been) training the first generation of the plant’s workforce and we are happy to say that in terms of the competency of the factory and the competency of our workforce, we are on target.
The (South Carolina) location is integrated from research and development all the way through manufacturing. Out of this facility, we are able to prove to the market that we can make challenging products that require manufacturing and design technology.
MTD: Are most of your tires sold in the U.S. made at that plant?
Phang: Not at this moment. Even 10 years from now, it will still be a combination of imports and (tires) from South Carolina.
MTD: On the subject of supply, tire dealers are telling us that domestic and import supply is less of a problem than it was eight to 10 months ago. Many dealers are sitting on a glut of tires. Has this forced you to change production or the number of units you're bringing in from outside the U.S.?
Phang: All of us know that the American market goes by selling cycles and selling seasons. This year, unfortunately, the selling season has been impacted by inflationary forces. In the early part of the year, supply disruptions (created) a big backlog. We were not spared from this impact. So right at this moment everybody is rebalancing supply and demand. We will just have to react accordingly.
MTD: Despite market disruptions, Giti Tire has maintained a steady cadence of new product introductions over the last several years. Why is this important?
Poling: It’s important that we continue to refresh our product lines. Even during (the pandemic) when we faced challenges, since we have an R&D facility located at our plant, we were able to keep our development ongoing. We have a full pipeline of products that are available and ready to go.
And it's important we continue to show our high level of technical expertise in rolling out these products. Dealers are always looking for that next new product that meets market trends.
MTD: Giti Tire introduced two commercial truck tire lines under the GT Radial brand name in 2021. How were they received by the marketplace?
Phang: When we designed these tires, we did a lot of field surveys to understand the needs of our customers. We balanced the application and balanced the performance between running line-haul routes and regional routes. We did a lot of work to define what we put into the design of the tires and we hope to carry on in that direction by adding more size extensions.
MTD: The emergence of electric vehicles (EVs) presents new opportunities for tire manufacturers. Does your company see an opportunity to provide tires for EVs?
Phang: On a global basis, this is something we have been (working on) for more than a decade. In the Asian market, we have launched a lot of EV products. We have done some development in Europe. In the U.S., it will come. It’s just a matter of time. We have already started this journey. It’s a necessity for all tire manufacturers as the market changes.
MTD: Can you see bringing a tire that has been specifically designed for EVs to the U.S. market?
Poling: We’re certainly looking at that. We have a global plan for EV tires. We’re working with OEMs on some of their EVs. So we certainly see what’s required and how we can take advantage of that with lines that are similar to our current products, but are specific to the high-load, high-torque requirements of those vehicles. We need to address the needs of those cars and how (they) drive and see if we can create a better solution than the OE tire – just like we do today with normal vehicles.
MTD: You mentioned seeking OE fitments on EVs. Can you discuss your general OE strategy in North America?
Poling: Our OE strategy is to focus on a few key partners and develop lines for them and their premium fitments – being selective with the Giti brand. I think this is going to be very key for us in making our brand stand out.
MTD: Are you satisfied with the coverage you have achieved in the U.S. dealer channel?
Phang: If you look at the channel, the American tire market is already very mature, very saturated and highly fragmented. We are reaching a stage where there are very massive changes in the structure of (tire dealer) ownership. There are very few first generation dealers left. That’s why there’s so much M&A. It’s like musical chairs. I would say that we are watching.
Developing our sale channel is a never-ending journey. There will never be enough. We have to look at where we are, our availability of products and what we can provide to the North American market.
MTD: What are some of Giti Tire's biggest opportunities at the moment?
Phang: I would say participating in emerging markets. There are a lot of emerging segments. All-weather is a growing segment... (and) the growth of the R/T (light truck tire segment.)
We are committed to the U.S. market. The building of our manufacturing facility in the U.S. is a statement of our commitment to the American market. The factory will not be able to provide substantial volume yet, but it will surely grow. You can rest assured that the products that are going to come out of the factory will be very relevant to the American market.
This is an integrated facility with a research center inside the factory, where every day, David and his team are listening and reacting to (customers’) needs to make sure our products in America will continue to be relevant to this market.
MTD: Is Giti Tire's business in the U.S. where you anticipated it would be?
Phang: I would say that we are where we want to be. We have reinvented ourselves. Our presence in America over the last decade has been redefined. We have manufacturing. We have R&D. We are very happy to have laid the foundation. And this will enable us to service our U.S. customers and the North American market.
Poling: We are uniquely positioned to (serve) the North American market. Having been in the industry for 35 years, I can tell you we are very unique. We design everything internally. We do our own tread patterns and our own sidewall designs. And everything we design for this market is designed for manufacturing. It’s seamless and makes us more responsive to market forces, so we can deliver products that meet (the market’s) expectations.