The Toyo Tire Corp. has announced adjustments to its North American prices as of February 1. The prices for passenger car and commercial tyres will increase by up to four per cent. Like several other tyre manufacturers Toyo explained this step with rapidly increasing raw material prices.
Toyo Tire & Rubber has published its figures for the first half fiscal 2004 (six months ended 30.9.2003), which show a decrease in turnover to 900 million Euro. For the year as a whole, Toyo anticipates a turnover of 1.93 billion Euro, with tyres accounting for 1.233 billion, or 64 per cent. The full year operating income is predicted to be half the previous year’s level, at 50 million Euro, of which 75 per cent will come from tyres.
US consumer magazine Consumer Reports’ has issued its annual UHP and all-season tyre ranking and Goodyear and Falken head the listings. The Falken Ziex ZE 512 came first out of 18 H-speed rated, all-season performance tyres and the Goodyear Eagle F1 GSD3 topped the ranks of 13 Z-rated, ultra-high performance summer tires. The Bridgestone Turanza LS-H came in second on the magazine’s all-season list, and the Toyo Proxes T1-S ranked second in the ultra-high performance list.
T&A talks to Martin Sutherland, general manager at Toyo in the UK, for an update on the company development.
Toyo is perhaps one of the most recognised mid-market brands in the UK. A series of targeted media campaigns both above and below the line have gone a long way to establishing the brand as the performance tyre of choice for many driving enthusiasts. In spite of the success of the UK operation it remains answerable to Toyo Reifen in Germany, so there is no UK managing director, the head of the chain of command in the UK is Martin Sutherland. Martin Sutherland has been with Toyo in the UK for the past 21 years, joining the company from Pirelli; so he knows a thing or two about the market in the UK.
Toyo has recently moved premises at Rushden. The re-location was only about 100 yards up the road, but the new premises have doubled the available storage space allowing Toyo to improve its stock capacity and as consequentially improve its service to its customers. Martin Sutherland says, “We have virtually doubled our stock capacity by moving to this unit. It offers us 70,000 square feet, which is twice the area of the old unit. However, we have managed to relocate without too great a disruption to our service or distribution. In fact, in the past we used to hold stock at the dockside and at one point had as many as 70 containers sitting in storage. All that stock is now held here, and we still have room to expand.
“One of the limitations we had on developing the business was the warehouse capacity and our restriction on turning stock around. That is no longer an issue and that allows us to offer a full width of patterns and sizes in all ranges. That gives us the potential to further build the business and we have the capacity here to grow considerably in all areas.”
The wholesale and distribution side of the tyre trade is going through a period of expansion and we could point to a number of companies investing considerable sums in new premises and expanding coverage. Toyo, though, is probably one of the few manufacturers talking so positively of expansion. What makes Toyo such a strong developer at this stage?
“There are probably a number of contributory factors,” says Martin Sutherland, “In the last fiscal year to 2003 we had our best ever results in terms of income and in terms of unit sales. In a market said to have declined by 2 per cent we saw an across the board increase of 12 per cent. That includes passenger car, 4×4, light truck and truck tyres. In high performance car tyres we saw a 37 per cent increase in sales.”
Winning volume and value in today’s tyre market is an uphill struggle, competing against established brands and in some sectors having to fend off price-led competition from the far east means that a 12 per cent increase is no mean feat. What do you attribute the success to?
“Without doubt,” says Martin Sutherland, “Much of our success is due to the quality of the marketing campaigns we have established over the years. Mike Rignall came to Toyo with the remit to redevelop our marketing and to increase brand awareness and he has done an excellent job in raising our profile in the trade and with the consumer. The way we have marketed the brand is now paying dividends for us. We established a policy of exclusivity for dealers and we have stuck to that policy and we have ensured that our availability is good.”
Kumho Tire has moved up from tenth to ninth position in the list of world tyre manufacturers, published by US magazine Tire Business. With sales of over $1.44 billion last year – a double-digit increase – Kumho overtook Toyo in the world rankings. Tire Business estimates that the top three tyre manufacturers control 60 per cent of the world tyre market, and the top ten account for 80 per cent.
The Vredestein Hi-Trac came out tops in the annual tyre test conducted by motoring magazine Auto Express. Ten H-rated tyres were put through a demanding series of wet and dry handling tests and the Hi-Trac emerged in first place, narrowly ahead of the Continental ContiEcoContact3 and the third-placed Toyo Roadpro R610.
Toyo Tire & Rubber is involved in talks with “several companies” to jointly develop a run-flat tyre, say press reports. The name mentioned most often is that of Michelin, but Satoshi Takashina, spokesman for Toyo, said that no final decision has been reached and discussions are under way with a number of companies. A report in a Japanese business publication said that Toyo and Michelin would jointly develop and sell run-flat tyres, produced in Japan and the USA, by the year 2005. The speculation caused Toyo’s shares to rise sharply – at one point up by over 13 per cent.
For the fifth consecutive year Michelin has come top of the JD Power survey for satisfaction in passenger vehicle original equipment and top in the light truck OE tyre satisfaction league. The study has been based on reports from 33,700 consumers in their first three years on new vehicle ownership and reports on satisfaction with OE tyres. Michelin had the lowest percentage of owners reporting a tyre problem in the first year of ownership and more than 60 per cent of users said they would buy Michelin tyres as replacements. This is the highest level of repurchasing of any OE tyre brand.
J.D. Power and Associates has released details of its 2002 Replacement Tyre Buyer Behaviour and Satisfaction Study. Over 9,400 motorists in the USA who have recently purchased a tyre were questioned and the results were as follows. In the passenger tyre section, which includes cars and compact vans, Michelin came out top for the fourth year running, followed by (in order) Toyo, Uniroyal and Kelly (tied), Cooper and Goodyear (tied). Brands rated as performing at or below the industry average were, in alphabetical order, Bridgestone, Dayton, Douglas, Dunlop, Firestone, General, Sears and Yokohama. In the light truck category, Michelin and Cooper tied for first place, followed by BFGoodrich. Other brands were ranked at or below average and these were, again in alphabetical order, Firestone, Goodyear and Uniroyal. When it came to rating retailers, Les Schwab Tire Centers came out top for the third year running, followed by Big O Tires and Goodyear Auto Centers.
Cooper-Avon has appointed David Carson as European Brand Marketing Manager, responsible for both the Cooper and Avon brands. One of his key roles is to build on Cooper-Avon’s share of the high performance tyre sector. Before joining Cooper-Avon, David worked for Toyo Tyre UK.
The ten-year old technology and co-operation between Toyo and Continental has ended, nine months ahead of schedule. This follows the formation of a joint venture between Continental and Yokohama to co-operate on technology and tyre production in Japan. Conti is also co-operating with Bridgestone in the development of run-flat tyres. The ending of the Conti/Toyo agreement was brought forward at the request of the German manufacturer, according to Toyo.
Bridgestone and Toyo have both announced plans to boost output in China, destined for the Chinese domestic market. Bridgestone will raise production in total by 40%, with its Tianjin factory producing 13,000 tyres per day, an increase of 30%. Meanwhile, Toyo is looking at methods of increasing production at Jiangsu by 60%.
Following Pirelli and Dunlop, also Toyo presents two 22 inch tyres: Proxes S/T is available in 305/45 and 325/40 with speed index V. As well as these extreme sizes Toyo has developed an even bigger size: 305/40 R 23 115V for typical pick-ups and sport utility vehicles (SUVs).
Toyo Tire & Rubber has become the eighth manufacturer to sign up to RubberNetwork.com, the world-wide electronic purchasing and procurement marketplace. RubberNetwork.com will be launched in North America next month and further launches are planned for July (Europe) and September (Asia). The eight members represent over half of the world’s tyre manufacturing capacity.
At the beginning of April the presentation of Toyo’s new winter tyre, Snowprox S950, took place in Rovaniemi, Finland. The new product was already introduced to the market at the end of last year. The S950 covers the 55- up to the 40-series and has been released in 15 dimensions (from 185/55 R 15 up to 215/40 R 16). For the coming winter season five additional sizes in the 17-inch-sector and with a V speed index are planned.
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