FULLERTON, Calif.—Yokohama Tire Corp. is expanding its distribution reach in the U.S. and Canada by several hundred points of sale through an agreement with Tire Alliance Groupe to sell Yokohama and "Prodigy" brand car and light truck tires through TAG members. The agreement, effective Nov. 1, "is a tremendous opportunity for both Yokohama and the TAG dealers," said Dan Hunter, vice president and general manager, consumer products for Yokohama. Mr. Hunter called the deal "very significant" for Yokohama, but declined to discuss sales expectations.
The deal gives TAG members "more flexibility in their merchandising with the addition of a strong, quality brand," said Dan Beach, president and CEO of TAG.
The distribution deal includes a new brand, Prodigy, that will be available exclusively to TAG members, Mr. Hunter said.
Prodigy, which is intended to be a full broadline brand with some performance sizes, will debut in mid-2000 in a limited number of sizes and be expanded as the year progresses, he said. It will be made at Yokohama's sole U.S. plant in Salem, Va..
The Tire Alliance Groupe consists of 17 member companies or marketing groups comprising nearly 1,100 outlets; however, four TAG members covering 700 outlets already carry the Yokohama brand, according to Tire Business research, leaving the net gain in new points of sale at about 400.
The new distribution agreement should have little impact on other existing Yokohama dealers, Mr. Hunter said, since the TAG distribution "footprint" overlaps very little with the marketing territories of these other dealers. Yokohama does not offer exclusive territories to any dealers, he said.
TAG and Yokohama executives first started discussing a broad-based deal about a year and a half ago, Mr. Hunter said, after a few TAG members started carrying Yokohama. Among these were Morgan Tire & Auto Inc., Tire Factory Groupe L.P., and Tirecraft Auto Centers Ltd.
Discussions regarding the Yokohama brand eventually branched into a proprietary brand, Mr. Hunter said, and Yokohama offered TAG an exclusive with Prodigy, a brand name Yokohama had registered but not used. As such, Prodigy initially will be considered a Yokohama associate brand, he said.
Separately, Los Angeles-based Tire Factory Groupe is searching for a new executive director after the group and Michael R. Levitt parted company in early November.
The group declined to comment on the departure of Mr. Levitt, executive director of the group since its founding in 1995. He could not be reached for comment.