DENVILLE, N.J.—Bucking the industry trend, Alliance Tire Co. USA Ltd. is having its best year yet, according to its president.
Manny Cicero said the Denville-based subsidiary of Israeli tire maker Alliance Tire Co. (1992) Ltd. has spent the last two years working to increase its visibility in the North American market. With a larger team of salespeople, a recently opened warehouse in Portland, Tenn., and a new plant in India scheduled to go on line soon, the company is in the middle of a massive growth spurt.
“Right now we're already ahead of where we finished in 2007,” Cicero said. “Last year we were at $25 million in total in North America. Our goal was to increase that by more than 30 percent (this year), and we're already ahead of that.”
In 2008, the North American market accounted for about 10 percent of Alliance Tire's global sales, but that number has risen to 12-15 percent because of economic slowdowns in other parts of the world. Cicero estimated about a quarter to a third of the world's agricultural production takes place in North America, and the company wants its percentage of sales to line up with that eventually.
A combination of factors has helped Alliance Tire grow this year. In March, the company opened the warehouse in Portland, giving it the ability to keep an inventory in the U.S. while making purchasing tires a faster, more convenient process for North American dealers.
Cicero said the warehouse is stocked with several million dollars worth of inventory, and is especially beneficial for small dealers who don't need large shipments. It also helps with original equipment sales, because “it's hard to have an OE presence without the domestic inventory to back up your needs.”
A couple of years ago Alliance Tire tried to run a warehouse in the U.S., but it didn't work out because of “a lack of product and lack of coherent strategy,” Cicero said. Part of the problem was that the U.S. unit was being operated from Israel “and nobody was here.”
Alliance Tire recently augmented its team with four regional sales managers as part of its commitment to increase its presence in North America.
Cicero cited aggressive product growth as another strategy in boosting brand recognition, and the company's goal is to launch about 100 tires and sizes each year.
“So far we've launched 37 new products, so we're a little bit behind,” he said. Two years ago, though, the firm introduced 30 products for the entire year.
Part of the growth also can be attributed to advertising and brand-building strategies Alliance Tire has implemented. In addition to product introductions and adding distribution channels, the company boosted its sales force, increased advertising in farm trade journals and is attending regional and national trade shows for the first time.
“We don't want to lump ourselves in with the image of an import tire brand,” Cicero said. “We've got very sophisticated products, and we're trying to build a brand image around those products.”
Additionally, Alliance Tire is putting the finishing touches on its plant in southeast India, which will be ready to produce its first tire by late June or mid-July, he said.
Expected annual capacity at the $100 million plant will be 50,000 metric tons, which will double the company's total capacity. The 1 million-sq.-ft. factory is on a 115-acre site, and will employ 1,000.
In the first phase of the project, Alliance Tire will shift its bias rear- and front-tractor tire and implement-tire production to the India facility from its plant in Hadera, Israel. By year-end, the company also will begin shifting some popular radial rear tractor sizes to the new plant.
“We've taken quite a lot of investment on our shoulders in order to become a more predominant player in this North American market,” Cicero said. The capital backing from the company's owners, Yogesh Mahansaria and his father A.K. Mahansaria, has helped to make those investments possible, the executive said.