Yokohama Rubber Co. Ltd.'s U.S. subsidiary aims to boost its sales by 50 percent by 2008, top executives of the company said during the Specialty Equipment Market Association Show.
Yokohama Tire Corp. believes its performance tire business and expanded overall product lines will lead it to meet its goal. Among those products are three launched at SEMA, including an asymmetric-tread all-season tire the company expects will help it gain distribution in the heartland of the U.S., said Norio Karashima, Yokohama Tire president and CEO since August.
Yokohama Tire's strengths up to now have been largely in the Sun Belt-the Pacific, Atlantic and Gulf coasts-Karashima said. The all-season tire, the Avid TRZ (for Three Ride Zones), was designed to help Yokohama market itself more effectively with and gain dealers in winter belt states, said Art Michalik, director of marketing communications for Yokohama Tire.
In addition, Yokohama Tire now is distributing its products through American Car Care Centers Inc. and TBC Corp., both of which have considerable distribution in the targeted regions, said James MacMaster, executive vice president, Yokohama Tire business division.
MacMaster said Yokohama Tire took a ``huge step backward'' the past few years by re-orienting the company and its product range to position itself for the future. ``We were trying to be all things to all people,'' he said.
Now, MacMaster said the firm's dealer channel is the strongest it's ever been.
A key element of the growth strategy is the firm's Advantage associate dealer program, he said, which recently grew to 600 locations. The year-old program, which operates through Yokohama's wholesalers, offers participating dealers a package of sales performance-related business incentives, including store signage and displays, direct mail and consumer credit card programs, and quarterly cash rewards.
The Avid TRZ will be available in 23 sizes starting in January. The other tires launched during SEMA were the Advan Sport, Advan Neova and Advan S/T high-performance tires.
Yokohama Tire's sales should grow to $900 million or more by as early as 2008 and no later than 2012 on the strength of new sales initiatives and a renewed product line, said Mitsuhisa Ono, general manager for the company's North American Tire Business Department.
Yokohama Tire returned to the black last year on the strength of greater sales of higher value-added products in the past few years and stringent attention to its selling, general, administrative and interest expenses and despite higher raw materials costs and lower production, according to YRC's fiscal 2004 annual report.
Karashima credited his successor at Yokohama Tire, Koji Ikawa, for guiding the company through the tough business decisions that were necessary to get Yokohama Tire back in the black.
``We've turned the corner, examined our expenses ...and are really positioned to grow,'' he said.
Karashima said he operates on two basic philosophies: Business is customer driven, and a successful business must have a spirit of teamwork.
To this end, he said, Yokohama Tire management and personnel are working to improve quality, cost, development, delivery and service.
The firm anticipates staying in the black this year because of product launches, continued shift to higher value-added products and improved productivity at the firm's tire plant in Salem, Va., the report states. Yokohama Tire is making the Avid TRZ at the Salem factory, which MacMaster said probably has ``the most complex product scheduling'' in the industry.
Employees at that facility have been working day to day without a contract since July 2003 when their previous six-year pact with Yokohama expired. Contract talks recently restarted, but neither Yokohama Tire nor the United Steelworkers of America has commented publicly on progress.
Yokohama Tire earlier said it is focusing on expanding its high-performance and Yokohama-branded tire sales by developing and introducing two or three new products annually. The U.S. market, for example, will be the first priority in receiving new Yokohama medium truck tires, which are scheduled to be launched in early 2005, according to Hisao Suzuki, representative executive director and president of Yokohama Rubber's tire group.
Yokohama Tire reported lower unit sales of passenger tires but higher truck and bus tire unit sales for the year ended March 31, resulting in net income of $780,000 on sales of $612.4 million. This contrasts with a loss of $550,000 the previous year on sales of $598.7 million.