FINDLAY, Ohio — Cooper Tire & Rubber Co. has formed a sales and distribution joint venture and signed an off-take production agreement with a Mexican tire maker covering broadline passenger and light truck radials.
The joint venture, Cooper Tire & Rubber Co. de Mexico S.A. de C.V. in Queretaro, Mexico, is owned 50-50 by Cooper and Corporacion de Occidente S.A. de C.V. It will be responsible for the marketing, sales and distribution in Mexico of the Cooper and Pneustone brands, as well as all other associate brand tires marketed by the two partner companies, Cooper said.
Terms of the deals were not disclosed, and Cooper didn´t divulge its sales expectations for the venture.
Corporacion de Occidente-which also operates as Llanti Systems and Pneustone S.A. de C.V.-makes tires at a former Continental A.G. tire factory in Guadalajara that Conti closed in 2001. A group of Mexican investors bought the facility from the German company and restart- ed production in mid-2005 using the Pneustone brand.
Cooper describes Occidente as a subsidiary of Grupo Dexel, a Mexican holding company with divisions involved in transportation, LP gas distribution, auto parts and construction equipment.
"This is a great opportunity to grow the Cooper brands in Mexico," said Phil Caris, vice president, sales and marketing, for Cooper´s North American Tire Division.
"By partnering with Occidente, we gain access to retail channels in Mexico and leverage existing relationships that (the) Pneustone brand has established with dealers throughout that country," he said. "Our existing customers in Mexico will benefit with the localized warehousing and increased focus on that market."
Cooper has been in negotiations with Occidente for about a year, the company said.
The Findlay tire maker´s production agreement with Occidente is expected to begin in the fourth quarter and increase over three years to nearly 2.5 million units annually, Cooper said.
Cooper-brand and associate-brand tires produced under this arrangement will be sold in the U.S. and Canada as well as in Mexico, according to the tire manufacturer.
There are no immediate plans to bring the Pneustone brand to the U.S.