Kumho pitching a 'better tomorrow' for U.S. dealers

LOS CABOS, Mexico—After a difficult year financially in 2016, Kumho Tire USA Inc. rebounded in 2017 with double-digit growth, and the company is looking to continue that momentum in the year ahead.

Without providing financial figures or percentages regarding the current year's financial performance, Jim Mayfield, executive vice president of sales and marketing, said Kumho is entering 2018 with a new theme, "Imagine a better tomorrow."

Even the location of Kumho's 2017 North American Dealer Meeting—the Auberge Esperanza Resort in Los Cabos—conveyed that approach.

Esperanza means "hope" in Spanish, President Harry Choi said in his opening remarks to the 30 tire dealers and distributors attending Kumho's 2017 North American Dealer Meeting.

But Kumho is doing more than just hoping 2018 will bring increased sales and profits to the Atlanta-based unit of South Korea's Kumho Tire Co. Inc.

The company is following its plan that focuses on being consistent, stable and dependable, Mayfield said.

And unlike 2017, when Kumho took a breather and did not introduce any new tires, the company will launch three products in 2018—the Crugen HP71, a CUV/SUV all-season tire that will replace the KL33; Ecsta PA51, an ultra-high-performance, all-season tire, that will replace the Ecsta 4X2 in the first stage of the launch and the Ecsta PA31 in the second stage; and KLP11e, a long-distance, over-the-road commercial drive tire.

"In 2018, one of the things that we've instituted as an organization globally is a more planned product replacement cycle," Mayfield said. "So every product now has a life cycle. And it varies depending upon the segment of the market that we're talking about.

"If it's a segment of the market where there are new vehicles being developed or the technologies are being launched very quickly, the life cycle will be shorter.

"If it's a segment of the market where the sizing is not changing quickly or the technology is not changing as quickly, then that life cycle might be longer."

The plan for consumer tires is to launch two to three products each year and retire products that are at the end of their life cycle, Mayfield said.

The planned Crugen HP71 will offer improved treadwear and snow traction, Mayfield said. It will feature a symmetric tread pattern in H- and V-speed ratings, and will be available in 53 sizes in 16- to 22-inch rim diameters when it launches in 2018's fourth quarter.

With the Ecsta PA51, Kumho will increase the number of sizes and speed ratings, allowing it to replace two tire lines. One of the key design targets of this tire also is improved snow traction, Mayfield said.

Kumho will offer the PA51 in 64 sizes in V-, W- and Y-speed ratings and in 15- to 21-inch rim diameters starting in the third quarter. The tire will sport a racing-theme sidewall design and an asymmetric tread pattern.

As for its new entry for the commercial truck tire market, Kumho has designed the KLP11e for enhanced mileage and low rolling resistance, Mayfield said, as well as improved durability and uniform wear characteristics, an optimized traction groove for all-weather performance and reduced block-edge wear for endurance. It will be available in 2018's second quarter.

Kumho also is planning enhancements to its Premium Fuel dealer program in 2018. For sales of tires 18 inches and larger, Kumho is adding a $5 bonus opportunity for the Fuel dealer. This will allow a Fuel dealer the ability to earn up to $11 per tire on a UHP product if it's 18 inches and higher in rim diameter, Mayfield said.

"We think that's a very strong incentive for the Fuel dealers," he said. "And we will continue to look at quarterly programs to help drive more business through the Fuel dealers, pull tires out of your inventory, assist your sales effort, as well."

Kumho also is making it easier for Fuel dealers to earn points for premium prizes that can be earned through the dealer portal. For 2018, Kumho will increase the points dealers can earn through the program.

Level-one dealers now will be able to earn up 1,000 points per quarter, up from 500, level two up to 1,500 points from 750 and level three up to 2,500 from 1,000.

"So a level-three dealer can earn 10,000 points and that gives them the ability to get whatever they want from the (prize) list on the portal," Mayfield said. "So we think that is something that they are going to like and appreciate and bring more value to them."

In 2017, Kumho redesigned its corporate website to make it easier to navigate and allow for a simpler brand experience for consumers to help them get the information they need when they are trying to buy new tires, said Brian Gallagher, Kumho's senior marketing manager.

Social media—Twitter, Instagram, Facebook—has a place in the company's marketing approach and will remain a "big priority" for Kumho in reaching consumers, he added.

"All the content we put on there, we...want to entertain, educate and engage, and also we want people to come back in. We want people to recognize that we are out there and that we are a smart choice," Gallagher said.

Grassroots motorsports has a place in the 2018 marketing plans as well.

Along with these efforts, Kumho will continue to leverage and optimize its sponsorship as the official tire of the NBA, which has superseded the NFL as the hottest property for sponsors, Gallagher said.

"We just have to be as strategic as possible in what we invest in to fully activate around the partnership we have in place, not only with the league but with the teams and some of the players themselves," he said.

This includes serving as the title sponsor of the NBA G League (formerly the D League) for the All-Star Game, which will be held in Los Angeles next year, and regionally continuing Kumho's engagement with the Charlotte Hornets and the Atlanta Hawks, the latter of which will involve a video series with the team in 2018.

During the meeting, Kumho executives made no mention of the financial difficulties being experienced by the company's parent firm in South Korea.

Asked about this following the dealer meeting, Mayfield said his priority is growing the company's business in the U.S.