BANFF, Alberta—After Sumitomo Rubber Industries Inc. dissolved its 16-year alliance with Goodyear last October—acquiring Goodyear's 93-year-old factory in Tonawanda, N.Y., in the process—plans for North American production of the firm's Falken-brand tires became inevitable.
That goal materialized a few months later, with Sumitomo curing its first Falken-brand tire at the plant in January.
Since that first experimental tire, the company has been working to ensure consistency in tires manufactured at the plant in preparation for its upcoming production cycle, Rick Brennan, senior vice president of marketing for SRI subsidiary Sumitomo Rubber North America Inc., said recently at the firm's Falken dealer meeting in Banff.
“We've spent the last seven months actually making tires, checking them, making sure that not only the spec but the performance is where it needs to be,” he said.
SRI has begun transferring the production of some North America-bound tires from its plant in Amati City, Thailand, and recently disclosed plans to double capacity at Tonawanda for car and light truck tires to 10,000 units a day by year-end 2019, investing $87 million along the way.
In July, the Tonawanda plant began regular production on its first two Falken SKUs, the Ziex ZE950 all-season passenger tire in sizes 215/60R15 and 225/60R16. Size 225/60R17 was added to the production schedule in August.
In September, the plant will expand production with the addition of ZE950 tires in sizes 205/50R16 and 205/60R16, along with the Wild Peak H/T light truck tire in size 265/70R16. The production schedule for both tire lines will continue to expand through the remainder of the year, Brennan said, and the plant will begin to manufacture additional lines.
“As we go through the rest of the year, you'll see our planned production for the Falken brand out of the Buffalo factory,” he said.
“We are actually doing the work up front to make sure that we separate where we get these (tires) from, so you won't have the same size coming from two different factories in two different countries. We're managing our inventory and making sure that we don't make the same size in two different places.”
Brennan said having local production is expected to help SRNA improve inventory management and give the company more flexibility in the face of changing market conditions in ways that are nearly impossible now.
“Let's say we order on the 10th of August. That order we sent to the factory on the 10th of August is for September production,” Brennan explained. “Depending on when it gets made in September, it's about a month from the time it actually comes out of the mold before we get it.
“Basically, it can be up to a 90-day timeline. So we're taking a forecast for what November's supposed to look like, by size, by warehouse and then guessing so that we can ship it and get it to that warehouse before we run out.”
With the Tonawanda plant running, the company will benefit from timely and more flexible manufacturing.
“Now we can send an order to the factory, and they can start being produced within the next week,” he said. “And the other thing too is we can get with the factory and change the production—'You know what, our sales just dropped in this tire. Take that size down and put this one in.' “
Brennan said local tire manufacturing is a must if the brand wants to extend its growing original equipment portfolio. He noted the company will add several North American fitments through 2018, but he did not identify them.
“There are a lot of fitments in the works now, and we're trying to be as active as we can to expand our fitments for OE as fast as we can,” he said.
Nearly a year has past since SRNA's Falken brand became the official tire of Major League Baseball, an agreement that has given the brand multiple promotional opportunities, ranging from virtual signage behind home plate to global marketing rights for post-season games.
The company added team sponsorships with the San Diego Padres, Cleveland Indians and Detroit Tigers in 2016.
“We had to spend a lot more money, but we've had to because now we aren't just performance (tires),” Brennan said. “We sell a lot of other things.”
He said the increased advertising spend has been successful.
In 2014, the number of impressions for the Falken brand—generated primarily through signage, racing, project car activity and TV sponsorships—reached about 9.5 million. That number plummeted to 3.5 million last year, largely as a result of changes to its motorsports program.
Within the first six months of 2016, Falken has had about 498 million impressions. Expectations are for MLB partnership to generate more than 2 billion impressions by the end of the postseason.
Since partnering with MLB, Falken's website traffic has increased 41 percent, Brennan added. However, that hasn't necessarily translated into increased tire sales so far for the company.
“If the consumer isn't aware of you, then he never engages your brand,” he said. “So you have to get that awareness up, get his familiarity up to a certain level before he will even engage with your brand.
“So have we seen a lift of sales just because of that? Impossible to know at this point, because the activity with MLB is a long-term process.”