Mid-year Report: Nokian on track to introduce new products

The COVID-19 pandemic hasn't deterred Nokian Tyres Inc. from its plans to roll out new products in the second half of 2020. Mark Earl, Nokian senior vice president for the Americas, told Tire Business that the Finnish tire maker plans to release products specifically for the North American market, produced at its factory in Dayton, Tenn.

How would you describe business thus far in 2020?

We had a good start to the year in North America, but like all companies in this industry, we saw a sharp decline in demand starting in late Q1.

How has your company reacted to COVID-19?

Our priorities have been to ensure the safety of our employees and to do anything we can to help our customers through this crisis, including financially supporting our customers' individual efforts to help members of their local communities who have been impacted by COVID-19.

Do you expect any supply difficulties in the second half of the year?

We do not have supply issues. Our factories are open, and we are able to keep up with demand.

What type of practices has your company implemented in light of COVID-19?

Like other companies, we temporarily have restricted travel and moved to working at home. This was an easy transition for our company because we had already moved away from a traditional office environment.

Because of our sales representatives' close relationships with customers, we have been able to continue open communication, even when we cannot visit in person.

What are some of the pleasant surprises you are seeing in the industry?

It is really great to see how much every retail and wholesale partner we work with is thinking every day about the safety and well-being of their employees, customers and communities. We applaud the efforts our customers have made to make their workplaces safer and their communities stronger during this pandemic.

The USW has petitioned for antidumping and countervailing duties on passenger and light truck tires made in Thailand, South Korea, Taiwan and Vietnam. What is your company's reaction to that?

We support any initiative that supports free trade and fair trade.

Where do you see the industry markets heading during the second half of 2020?

It really depends on North American consumer behavior in response to the COVID-19 developments. While we are all uncertain of where things are headed in the short term, we remain confident that we will soon be back on track as a company and an industry.

What kind of trends are you seeing in the marketplace? How is Nokian reacting to them?

The biggest trend in our market is the increase in average tire size. Like other companies, Nokian is adding more large sizes to our product families. At the beginning of the year, we introduced the Nokian ONE HT, a new product in the light-truck category.

How has the ONE HT been received in the market thus far? How does this product bolster this important segment?

We are very pleased with the initial response to the Nokian ONE HT. It is the first of several new all-season products we will introduce over the next few years. We see lots of growth potential in this segment, and we think our new factory in Tennessee positions us well to respond to surging demand in the category.

Nokian recently announced it had achieved an emissions-reduction target consistent with efforts necessary to help prevent the most damaging effects of climate change. Why is that important to the company?

One of the core values of our company is sustainability, and we have set ambitious targets to lead our industry's efforts to be more eco-friendly. We were the first tire company to earn approval from the Science-Based Targets initiative, and we're taking other steps toward sustainability, including solar panels at our North American factory, sustainable practices at our soon-to-open Spain Test Center, and new products with low rolling resistance.

How important was it for Nokian to join the U.S. Tire Manufacturers Association? What benefits can that provide?

We are happy to be part of USTMA, whose values of safety and sustainability mirror our own. Joining USTMA confirms that we have made a full commitment to the North American market.

Can you provide an update on the plant in Tennessee? Is production back at normal capacity? What provisions have been put into action to prevent an outbreak of COVID-19?

We reopened the Dayton factory on May 4 after a five-week closure to help prevent the spread of the virus. We reopened the factory once we were confident we could help protect our employees from the spread of COVID-19. We did so in line with federal, state and local guidelines and following the implementation of strict health and safety measures.

We have instituted a number of policies aimed at achieving that goal, including:

• Making every entrant onto factory property subject to daily temperature screening;
• Provision of masks to our employees;
• Social distancing policies, including a six-foot distance requirement, rotating lunches, dedicated entrances for each department and eliminating factory-wide meetings;
• Allowing only business-critical visitors onto the factory site; and
• Increasing the frequency of cleaning throughout the facility.

Our production ramp-up continues at a positive pace. Our focus remains on high product quality first and quantity second.

Do you expect to roll out any additional products in 2020? What will they be and what sector will they serve?

We are looking forward to additional product announcements later this year—products designed specifically for North American consumers.

What are some of the challenges of the industry going forward? What keeps you up at night?

It seems there is too much emphasis on tire cost or tire mileage at the expense of safety. There are accidents every day that may have been prevented with better tires.

Anything else you would like to add?

I am very proud about the way our industry is reacting to the COVID-19 crisis.