As the industry reacts to antidumping duties imposed on passenger tires made in some Asian countries, Kenda Rubber Co. Ltd. is focusing its attention on its core proposition: offering premium performance at a value price.
Brandon Stotsenburg, vice president, Automotive Division of American Kenda Rubber Industrial Co. Ltd., said the company will continue to invest in wide array of products that serve the U.S. market, particularly the light-truck segment.
How would you describe business thus far in 2021?
Kenda's orders and shipments are growing rapidly beyond both 2019 and 2020 levels. Our consumers and our channel partners continue to embrace our message of premium performance at a value price.
Although the economy shows strong signs of growth, consumers are actively seeking value, but don't want to surrender expected performance and safety. We are consistently over-indexing in sell-out performance with our channel partners responding to exceptional margin opportunities.
What would you like customers to know about your how your company has tackled the challenges brought on by the pandemic?
Kenda has all of its tire manufacturing plants up and running, capable of 100 percent capacity. Maintaining the best work environment safety while keeping our warehouses, essential offices and manufacturing open in the U.S. remain our best way to keep our employees safe and our customers servicing essential businesses operating.
Kenda stressed safety as part of our global culture and showed that we could increase business by following strong protocol and executing around our value proposition of premium performance at a value price.
Kenda seems to push an idea of "momentum," especially in the motorsports sponsorships. Is that a conscious decision? How do you connect with your customer base?
That is an interesting observation—we do believe that momentum can be a driving force as long as the continued results support our longer term goals established by Jimmy Yang, our global CEO.
Much of Kenda's B2B customer base are retailers serviced by our great distributor partners. We utilize multiple communication platforms, including podcasts, improved email platforms and digital meetings to get our messages to the distributors and retailers.
The key is that the channel partners are open to receiving the information based on our strong margin platform. We emphasize our focus on our channel partners' business results based on tangible evidence—as you mentioned our motorsports approach, we embrace platforms that utilize the same DOT tires sold by our retailers to the consumer through our tagline Podium2Pavement.
We love competing with other great brands in this true, open competition and worked hard to see Kyle Kleiman win the 2020 Pro 2 division and Brush Run in the Championship Off-Road Series. We have seen the momentum from these activities as consumers see these results and search for more information.
In Kenda's case, we have a growing online portfolio of third-party testing and endorsements that offer the consumer additional reasons to consider our products. When the retailers are asked about the Kenda products, most will tell the consumer that the performance and value are truly outstanding—that momentum continues to grow!
What is the key to success for Kenda to thrive in the U.S. market?
The key activities are assuring the consistency supporting our product and brand development, operational improvements and all elements reinforcing premium performance at a value price.
In the mid-term, American Kenda is owned by a global company that is well positioned to accelerate growth in North America. We have established a broad range of premium products that are unparalleled with PCR, LTR, ST radial, ATV, UTV, motorcycle, golf, lawn and garden, light industrial and bicycle. Our products are complementary, and we offer many options to allow our channel partners to offer products to cover most of these segments.
Kenda is working on new products and supply-chain system improvements that will provide our customers better solutions moving forward. We are continuing to work on online options for education and also adding more people to support growth plans. Underlying everything will be fair global trade policies, which balance imports with domestic production.
Do you expect any supply difficulties in the second half?
Kenda is working quickly to balance our production needs with the growing demand across many product segments. The recent trade policy decisions combined with the associated supply-chain shortages and cost increases have been a challenge.
We continue to have longer lead times for our automotive products, both passenger and light truck, as well as some of our associated segments, trailer, ATV and UTV. The factory investments to improve these conditions have been made and our global team is working around the clock to overcome the issues. We anticipate a better situation as we end 2021.
How has difficulty at ports impacted business?
The biggest challenge right now relates to supply chain disruptions. There are congestion issues at U.S. and Canadian ports, rail yards and ongoing shortages in all areas of domestic shipping.
Ocean freight rates doubled from the consistent rates seen over the past several years. Based on the current limited carriers, shortages of containers and U.S. government trade policies, there are strong indications that this situation will not improve over the next 8-12 months.