Nokian continues to invest in Tennessee facility

Nokian Tyres Ltd. continues to invest in both its people and its plant in Dayton, Tenn., according to Tommi Heinonen, the tire maker's vice president, North America. The tire maker officially opened its 350,000 sq.-ft. warehouse there—with the capability to hold thousands of tires made at the nearby tire factory—in June.

How would you describe business thus far in 2024?

The year has gotten off to a promising start. The launch of our sixth-generation all-weather tire, the Nokian Remedy WRG5, was received well by our customers. And our light truck and all-terrain sales are growing now that we are ramping up capacity for those products at our North American factory in Dayton, Tenn.

Where do you see opportunities for growth the rest of the year?

We will sell more light truck and all-terrain sizes now that capacity has grown at our Dayton factory. Demand has been strong for products like the Nokian Outpost and the One HT, and now we are able to satisfy dealers who have been asking for them. And of course, as the inventor of the winter tire we are always hoping for a snowy start to winter in the Snow Belt.

Are you seeing any volatility in the supply chain?

Our supply-chain landscape has settled after challenges from the pandemic and container shortage in recent years. Luckily, we were well prepared for the Suez Canal disruptions, so they had little effect on our North American business. And producing our all-season and all-weather supply in the United States helps insulate us from external supply issues. We are opening a finished goods warehouse in Dayton that will connect to our nine North American warehouses. This further stabilizes our logistics operations.

Of all of the accomplishments at your Dayton plant, what stands out most?

As with all things at Nokian Tyres, we have the most pride in our people. Our team in Southeast Tennessee has grown from 60 launch team members in 2019 to a 500-member workforce today. We added three shifts and hundreds of employees during the pandemic, and we have grown our team every year since.

This reflects the strong leadership and culture at our factory. Even more importantly, it shows the quality of the team we have built. We look forward to continuing to help our employees grow at the same time we are growing production at our factory.

How soon will the warehouse be ready for use?

(Editors note: this Q&A was conducted before the Dayton warehouse officially opened in mid-June). We built the Dayton factory so we could be more responsive to our customers' needs, and the warehouse is the latest step in that process. We are already shipping tires from our finished goods warehouse in Dayton to our distribution centers across the U.S. and Canada. The added storage capacity helps us keep up with the growing supply of tires we are making in Dayton. It also allows us to use our production space more efficiently.

How important is the North American market to Nokian?

North America is a vital center of growth for Nokian Tyres. We are a household name at our home in the Nordic region, and we are refreshing our Central European presence with our new factory in Oradea, Romania.

Meanwhile, North America is a fertile growth territory where we are producing all-season and all-weather tires at record levels for a strong dealer network that serves loyal drivers.

We see an opportunity to grow spring and summer sales with drivers who have enjoyed our winter products for years. We are also using our Dayton production to expand our all-season and all-weather footprint with consumers who live in places with milder winters. And we have by no means reached market maturity in the winter tire space, which we invented and where we continue to serve as a leader.

How has the Remedy WRG5 been received in the market?

I am hearing people say all the time that all-weather tires are new. In fact, the Remedy WRG5 is the sixth generation of all-weather tires we have made, and this year we will celebrate 25 years of selling all-weather products in North America. But that misperception tells us how much consumer education still needs to be done.

The Remedy WRG5 is a good opportunity to teach drivers — and remind tire dealers — about a true four-season driving solution, a remedy for areas that do not experience severe winter weather.

The product line is fully available and has sold well. It is a good fit in areas like the Pacific Northwest and Rocky Mountains, where winter weather is unpredictable and people often visit high altitudes. Many of our dealers use all-weather tires to expand their sales mix and serve customers. As they educate their customers about the year-round driving benefits, we are seeing all-weather tires complement all-season sales and become a larger part of our product mix.

Could you briefly describe your electric-vehicle tire strategy?

We have been developing and testing tires with electric vehicles in mind for more than a decade. That comes with the territory for a company from Scandinavia, where EVs are very popular. We believe there is a good market for dedicated EV winter tires, which we introduced in our latest winter products — the studded Nokian Tyres Hakkapeliitta 10 EV and non-studded Hakkapeliitta R5 EV.

Every all-season and all-weather tire we currently produce comes with an Electric Fit emblem that certifies it is suitable for EVs. We engineer every product to handle electric vehicles' unique demands for weight, noise levels, torque and range.

How do you get your customers to embrace sustainability?

Sustainability carries benefits to consumers, and we find that tire dealers are open to explaining those benefits to their customers. For instance, tires with lower rolling resistance help vehicles reduce emissions, but they also increase fuel efficiency.

A growing number of consumers make buying decisions based on companies' environmental records. When drivers care, dealers tend to care. In an industry like ours, where drivers may struggle to tell find differences among product offerings, we can set ourselves apart by having a good reputation for sustainability and helping them save on fuel costs.

But we don't just prize sustainability because it will help sell tires. We strive to be sustainable because it is the right thing to do. Many of our customers feel the same way. That is why we have the world's first LEED v4 Silver-certified tire production facility, make more than 90 percent of our tires in the lowest categories of rolling resistance, and are building the first-ever zero-CO2-emissions tire factory in Romania. Sustainability is a good business practice, but it is also about being a good steward of our resources and a good neighbor in the communities where we operate.

Do you expect any other major investments in the next six months or year?

We continue to invest in our business; however, I am happy to say that we are reaching the end of the biggest stage of capital growth efforts. Now, our task is to turn that growth into increased sales that satisfy growing demand for our products.

What do you want tire dealers to know about Nokian that they may not know?

While we have deep roots as the inventor of the winter tire, our all-season and all-weather tires benefit from that legacy of innovation. We never mind when someone associates Nokian Tyres with winter, but we are eager for them to view us first and foremost as a innovator not just in the winter months, but for year-round driving.