Managing supply the greatest challenge for 2012, says Yokohama’s King

Last year was a “very challenging year” for Yokohama Tire Corporation, reports Dan King, senior vice-president of sales and marketing at Yokohama’s North American operation. King describes the North American consumer tyre market as being “basically flat” and says in light of this Yokohama was pleased to have grown in all segments of its business.

“We weren’t, however, as good of a supplier as we wanted to be for our customers,” the senior vice-president of sales and marketing admits. “Our demand was very strong, but we were not able to fully supply our dealer partners and allocate product as efficiently as we should.” While not denying the frustration experienced by dealers on this issue, King comments that they understand it to be an industry-wide problem rather than something specific to Yokohama. “I think all manufacturers, for the most part, are faced with the same challenge,” he adds. “It’s a global economy and market for tyres. The issue is not just that we can’t bring enough into the US, it’s that we have demand all over the world.”

Yokohama Tire will increase its supply of products into the US market during the course of 2012, however King concedes this growth in supply “won’t be as dramatic as we’d like.” He adds: “I’d like to really open up and reach our true demand in the US, but we will be limited in some areas. At least we will see more product flow into the US that’s coming from a combination of offshore and expansion of our Salem, Virginia factory. We’ll see the full results of that this year.”

King believes managing supply within growing segments is the greatest challenge the North American consumer tyre segment will face this year, yet he opines that “the industry will be better than what we saw in 2010 or 2011.” While only moderate growth is anticipated within the replacement tyre market, King says original equipment should continue to improve. The other key issue to watch is raw materials, both in terms of pricing trends and supply.

As for consumer product preferences, Dan King says motorists want “a tyre that does it all.” He notes growth is taking place within the all-season touring segment and comments on a tendency towards higher speed rated products: “Since 2007, V speed ratings and above have increased approximately 50 per cent in all-season touring tyres.” King also shares that the North American market for run-flats is currently booming. “Run-flat tyres were once perceived as a quickly passing trend, but in 2011 more than 400,000 new vehicles in the USA and Canada came with run-flat tyres,” he says. “That number is expected to grow to almost 700,000 by 2015.”