SRI: ‘premium, global’ Dunlop to complement ‘bold’ Falken in ‘dual-brand’ strategy

Following its acquisition of Dunlop from Goodyear, Sumitomo Rubber Industries (SRI) has detailed how it plans to deploy a new “dual-brand” strategy, with Dunlop positioned as its “core” and “premium” global tyre brand. SRI was always the front-runner to acquire the brand since it already operates Dunlop in various market segments. While Dunlop rights remain somewhat complex thanks to Goodyear holding on to such segments as Dunlop-branded motorcycle tyres in Europe and Oceania, SRI will now have an almost global focal point in the four-wheel car tyre segment (the deal excludes India, Malaysia, Singapore and Brunei in this segment). By adding the Europe, North America, and Oceania regions to its four-wheel Dunlop business, SRI wants to advance “premiumisation globally through differentiated products and enhancing brand strength” via the brand’s sporting heritage.

In its statement, SRI talks of setting itself apart from competitors with Dunlop. It feels it can achieve this by “leveraging our rich heritage and strong brand recognition” and by offering “innovative products that integrate cutting-edge technologies in addition to meeting the evolving needs of the next-generation mobility society.” It wants to apply its next generation of tyre technologies to Dunlop, such as “Active Tread”, an all-season oriented rubber compound that responds to moisture and temperature. SRI adds that it will focus on the original equipment channel for premium vehicles and motorsport with Dunlop.

Falken Tyres meanwhile, SRI’s existing brand in Europe, North America, and Oceania, will continue to use its product planning and marketing capabilities cultivated in each region “to focus on bold, one-of-a-kind products that appeal to its core fanbase.” Overall, SRI wants to “increase sales volume” in these regions while increasing the proportion of “premium products” it sells – meaning high rim diameter tyres (above 18 inches).

Ultimately, SRI says it will “position Dunlop as our core brand,” by accelerating brand investment in motorsports and global marketing activities. It also wants to use synergies with Dunlop-branded sports equipment – it is particularly strong in tennis and racquet sports, for example – to increase its brand value.

Different emphasis on sale price

Unsurprisingly, Sumitomo Rubber Industries also emphasised the price it has agreed to pay for the acquisition of the brand – $526 million – when discussing the transaction, while Goodyear played up the additional funds it would receive from supporting the Dunlop brand’s transition to SRI and the transfer of inventory. Having valued Dunlop at around $0.7 billion while discussing its divestiture strategy, it was important for Goodyear to show the sale meeting this target. Meanwhile, SRI’s statement focused more on the core acquisition price for the brand rights and intellectual property.

SRI president and CEO Satoru Yamamoto, said: “Our group has a history of acquiring Dunlop in various countries in the 1980s and producing and selling Dunlop brand tyres in Europe and North America in addition to Japan. It has been a great opportunity for our group to be able to use the Dunlop brand globally, and we are delighted that this acquisition has enabled us to use the Dunlop brand almost all over the world.

“Going forward, we will maximise the potential of the Dunlop brand, not only in the new regions where we have acquired rights, but also in existing regions, and further accelerate our efforts to realise our purpose: ‘Through innovation we