Sunny Days

(Akron/Tire Review) Mexico and Kumho Tire U.S.A. have become rather synonymous. For the past several years, the tyremaker has chosen Cancun or Puerto Vallarta as destinations of choice for its annual dealer meeting. This year’s meeting, held Jan. 5-9 in Cancun, was another successful event at a pleasant resort setting.

This time, Kumho added a minor twist to the festivities: dealers got to meet the newly installed CEO and president of Kumho Tire North America B.K. Kim. Don Hun Ham, recently named president of Kumho Tire U.S.A., was unable to attend.

Also on hand were Dave Hudrlik, vice president of sales and marketing; Mike Leverington, director of marketing; Kelvin Oh, general manager and sales coordinator; and Rick Brennan, brand director, all of whom spoke to dealers about the company’s 2006 accomplishments and its plans for 2007.

Parent company Kumho Tire Co. is currently ranked 10th among tyre manufacturers worldwide, with revenue of $1.6 billion in 2006. In the U.S. alone, Kumho has gone from just under $100 million in sales in 1997 to $465 million in revenue in 2006 and is aiming for what it feels is a reachable target of $610 million for 2007. In terms of tyres, Kumho hopes to reach 9.3 million units in the U.S. for 2007, according to the management team.

Kumho’s goal is to be the fifth largest tyre manufacturer in the world by 2015. To reach that goal, the company will have to count heavily on its North American efforts, Kim admits.

With that goal in mind, the U.S. management team is rolling out an aggressive plan for the coming year, and that was the primary focus of the dealer meeting.

Improving Service

As Kumho dealers know, available global production capacity and limited North American warehousing presented challenges. Kumho management said the warehousing issue has been addressed with expanded facilities in Los Angeles; Columbus, Ohio; Dallas; Chicago; and Atlanta. All told, warehouse space currently adds up to 1.732 million square feet.

Production capacity was Kumho’s next step in its overall strategy to improve service to dealers. The company now has three tyre plants in South Korea and three in China. Plans for a fourth Chinese plant and another in Vietnam are currently underway. Both new plants are expected to begin production in late 2007 and 2008, according to Kumho officials.

Collectively, these eight plants are expected to cover Kumho’s tyre production demand in North America – and around the world – for passenger, light truck/SUV and medium truck radials.

Dealer Base Critical

Hurdlik assured dealers that Kumho’s channel strategy for the U.S. replacement business remains based on retail and wholesale distribution via independent tyre dealers. As a result, the company is attacking the North American OE market in an effort to boost the overall brand appeal of Kumho. Last February, for example, Kumho opened its first Detroit sales office and has since gone from one to four OE sales people.

Hurdlik has already increased Kumho’s sales force from 13 to 19 people, the marketing support staff from three to eight, and the customer service team from nine to 16 people to support Kumho’s expected growth.

In addition to its expanded warehousing space, expanded production capacity, and enhanced sales and customer support infrastructure, Kumho continues to roll out new products to satisfy a growing breadth of customer demands, according to Brennan.

In fact, dealers evaluating a manufacturer’s success would be wise to consider product range and offerings, especially if they are full-line dealers, selling passenger, light truck, high performance, ultra-high performance, and more.

For this year’s dealer meeting, Kumho introduced the Solus KR 21, with 49 sizes covering the 13- through 17-inch segment. The Solus KR 21 carries a 640 AA UTQG rating, an 85,000-mile limited treadwear warranty, 25% road hazard warranty and a 90-day free trial.

Also new is the Road Venture APT, an all-season highway design with a 500 AB UTQG rating. It will launch this month with 32 P-metric sizes, followed by 24 LT-metric sizes in July. This tyre carries a 50,000-mile limited treadwear warranty and a 90-day free trial.

Next in Kumho’s growing lineup is a size expansion for the Ecsta ASX. By June of this year, Kumho will add 24 new 17- to 24-inch sizes to the line. The Ecsta SPT is also seeing 18 new sizes, covering 19- to 22-inch wheel diameters, and six run-flat sizes for 16- to 18-inch applications.

The increasingly popular Ecsta MX-C, which produces coloured smoke, will get seven new sizes this year – five in red, and one each for blue and yellow smoke. And, the scented Ecsta DX “aroma tyre” has hit the market with three sizes.

Kumho’s size expansion continues with the Road Venture A/T gaining 15 P-metric 15- to 20-inch sizes and 14 LT-metric sizes covering 16- to 20-inch wheels. The Road Venture M/T KL71 expansion has 10 new floatation and LT-metric sizes now in stock and nine additional sizes coming by the end of the first half.

On the marketing side, Leverington said Kumho will promote its “Extraordinary Value” message to dealers and distributors. The direction was chosen, he said, based on feedback from dealers, who cited the profit potential for the product (Kumho was ranked first in “Profitability” in Tire Review’s 2006 Tire Brands Study) as well as the brand’s product design, quality, market-driven innovation, speed to market, elevated product warranty and best-of-class training tools.

In fact, Leverington said, dealer training is now easier with Kumho’s recently announced online initiative called “EDGE.” This training tool, part of Kumho’s re-launched Web presence, includes modules to educate dealer sales staff on industry issues, work-related topics such as TPMS, Kumho products, and more. Special dealer incentives will be offered for completing the training programs.

David Wilson, director of wholesale operations for America’s Best Tires, a division of Ken Towery Auto Care Centers, commented, “This training program looks right on target for our operation. Other larger manufacturers are reducing involvement and commitment to these kind of programs.”

Kumho’s new online dealer training and support programs are set for release during the second quarter of 2007.

Additionally, in the second quarter, the company will unveil a new associate dealer program through qualified distributors. The program will offer smaller dealers increased incentives and promotional items based on their commitment to buy Kumho product. According to Brennan, “this will allow growth and extend new relationships.”

Kumho said it will continue to support motorsports through relationships with SCCA, the American Le Mans Series and the Mazda Cup, as well as its partnership with Championship Off Road Racing, all under the direction of Rudy Consolacion, Kumho’s motorsports manager.

All in all, the ‘fun in the sun’ approach Kumho has taken over the years has created a comfortable, relaxed atmosphere in which serious business can also be done. And, that approach appears to have built a real commitment between the tyremaker and its dealers.