LAS VEGAS—Six years after buying Mexican tire maker Tornel S.A., India's JK Tyre Industries Ltd. is finally ready to use that base of operations to push the JK consumer brand into the U.S. on a broad scale.
Mumbai, India-based JK is preparing to roll out JK-branded car and light truck tires starting around mid-2015, after a $45 million expansion of Tornel's manufacturing capacity in Mexico City is completed and production is up and running, according to Arun Bajoria, president and director of JK Tyre.
Bajoria and other JK Tyre executives discussed their plans at the recent SEMA Show in Las Vegas.
The expansion will add 5 million units of annual radial car tire capacity at JK-Tornel's plant in Mexico City, Bajoria said, which represents a 50 percent jump in passenger tire capacity.
The added capacity should be available by mid-2015, which could prove fortuitous should the U.S. government impose anti-dumping and/or countervailing duties on consumer tire imports from China.
Bajoria said JK and Tornel executives have met with Mexican President Felipe Calderone to request that tariffs on passenger tires imported to Mexico from China, currently at 15 percent, be continued or raised, pending the outcome of the U.S.'s decision on duties.
JK is still in negotiations with potential distributors/dealers, Bajoria said, so he declined to identify at this time the firm's targeted distribution partners in the U.S.
The company already has a toehold in the U.S., in New York City, via an original equipment supply agreement with Nissan Mexicana S.A. de C.V., which is building the Nissan NV200 van that is being used as a taxi in New York.
JK has the exclusive OE fitment on that vehicle, according to Salvador Tornel Ahumada, exports, offtake and marketing manager for JK-Tornel S.A. de C.V., and thus is able to gain valuable technical and market feedback.
Nissan rolled out the taxi version of the NV200 last October two years after being selected by the Taxi & Limousine Commission of New York City as the city's exclusive taxi, following a competitive two-year selection process.
Nissan estimates there are about 500 of them in operation in the Big Apple. Nissan is distributing the NV200 through at least eight Nissan dealerships in the New York City region.
The auto maker assembles the NV200 in Cuernavaca, Mexico. JK supplies a version of its Vectra premium tire in size 185/65R15.
JK Tornel also supplies JK- and Tornel-brand tires OE to Chrysler Group L.L.C. in Mexico and Fiat S.p.A. in Brazil, according to Vijay Misra, JK's technical director, and has an OE homologation under way with Volkswagen Mexico.
JK distributes JK-brand truck, farm and industrial tires in the U.S. already through a network of distributors, Misra said.
The company also launched an effort three years ago to sell the Tornel brand in the U.S., but distribution agreements with a handful of U.S. wholesalers ended without much progress being made.
Going forward, JK plans to promote the Tornel brand in Mexico and throughout Latin America.
In preparation of the launch, JK Tornel has been upgrading its product line to include SKUs in all-season and SUV categories. Sizes will be in the 13- to 18-inch rim diameters at first, Misra said.
Radial truck tires will be part of the mix as well, he added, but not for several more years as the company ramps up production at an expansion under way at JK's plant in Chennai, India.
That project, valued at $230 million over three years, will add 800,000 units of radial truck/bus tire capacity a year by year-end 2015, Misra said.
The company also is scouting locations in Mexico, he added, for a site for a radial truck tire plant, but that's still at least a couple of years away.
JK earlier had projected it would start selling radial truck tires in the U.S. by 2013, but that schedule—disclosed at the 2011 SEMA Show—has proved overly ambitious.
To support the firm's growth plans for the Americas, JK established a satellite research and development center at Tornel's plant complex in Mexico City last year.
With fiscal 2013 sales of $1.5 billion, JK is considered the 20th largest tire maker worldwide. Sales by JK Tornel represented about $250 million of that, according to JK financial figures.
JK's sales through the first six months of fiscal 2014 were about 6 percent ahead of 2013.