RANCHO CUCAMONGA, Calif.—Falken-brand truck tires will represent a bigger share of the capacity at Sumitomo Rubber USA L.L.C.'s Tonawanda plant near Buffalo, N.Y., to meet aggressive growth plans, according to Falken distributor Sumitomo Rubber North America Inc.
The plant, which Sumitomo Rubber Industries Ltd. took over from Goodyear in 2015, had split its capacity between the Sumitomo brand, distributed by TBC Corp., and the Falken brand that SRNA distributes.
Sumitomo now will devote a larger share of the plant's capacity to the Falken brand, SRNA officials said during the company's COVID-19 Dealer Resource Forum on Aug. 20.
"So we have pretty aggressive growth plans on the Falken TBR side, and we based that on the production capacity of the Buffalo (Tonawanda plant) and increased future capacities," said Bob Klimm, SRNA's director of sales for its commercial business.
"Right now 80-85 percent of our products come from Buffalo, which enables us to get new products to the market a little bit faster, make any countermeasures or improvements in products or refinements in products a little bit quicker.
"It's not so much that Sumitomo pulled out of Buffalo, it was always designed for us to have more of a share of that and, when it switched over from a Goodyear plant to a Sumitomo plant, there was a lot of capacity. We didn't have the volume or the dealer base to take that. We've accelerated that so we've been able to speed up that process a little bit more. We depend less on volume from TBC or from the Brazil (plant)."
Klimm said that when SRNA took over the Ohtsu brand in 2010, there were about 31 dealer customers in the U.S. and about $18 million in volume. The company since has transitioned its commercial tires to the Falken brand, which now has 99 dealers, he said.
"We decided to enhance and upgrade the product and do a conversion from Ohtsu over to the Falken brand," he said. "And then when we take it to market, to really concentrate on the premier regional, strong regional, bolt-on servicing dealers. So eventually we could take it to the next stage when we go into fleet business that we have good coverage coast to coast. And that's worked."
He said SRNA's commercial tire business got a boost when it became a stand-alone division in 2015. He said the company is looking to expand the product line and add national fleet accounts "in a year or two."
SRNA has been positioning Falken to replace Ohtsu, which had been the company's primary brand for commercial tires.
The company still markets a range of Ohtsu-brand passenger and light truck tire lines as a value-line brand.
Rick Brennan, SRNA's vice president of strategic planning, said development of an associate brand has been pushed down the road. He predicted that by the fourth quarter of 2021 or into 2022, consumers will see changes to the brand.
"With the pandemic we've seen quite a bit of expansion in that price-point category," he said. "So we're looking at being able to offer a wider range of product—for example in the light truck (category), because right now we're pretty limited—but also changing the products we have and updating it, because some of the stuff we have has been around awhile."
Matt Leeper, SRNA director of sales for its consumer business, said Sumitomo is dedicated to having an associate brand. "So whether it's Ohtsu or even another name, SRNA will have an associate brand to complement the Falken brand. We're committed to that long term," he said.
SRNA increased commercial tire sales by 10.8 percent in July, compared with the year-ago period, Klimm said, adding that the company had experienced "very strong demand" in August. He noted that most commercial tire dealers are experiencing similar trends with a rebound in commercial tire sales, service and retreading.