AKRON (Oct. 31, 2002) – Goodyear will make an announcement on Friday Nov. 1 regarding tire prices in North America. Company executives did not indicate whether it would be an increase or other type of adjustment, but they told financial analysts recently the company anticipates 5- to 7-percent higher raw materials costs in coming months.
At the same time, though, Goodyear President Bob Keegan told analysts in a conference call that Goodyear wants to "sell more tires profitably by increasing productivity within our existing dealer channels.
,”We've taken a fresh look at where our products compete,” he said, “and we have 'right-priced' our products for the (appropriate) market segment. That may mean higher prices on some products, and lower prices on others. We will be competitively positioned.
“We have more touch points… (points of sale) than our competitors, and we'll be able to leverage our position to drive more volume.”
Goodyear also is developing a distribution strategy “to expand into new markets, which we don't adequately serve today,” Mr. Keegan said. “We've identified by brand and territory exactly where we want to expand, and the volume and profit potential from these expansions.”
Mr. Keegan also said Goodyear “has made significant progress in mending our relationships” with its major distributors who scaled back their purchases of Goodyear products earlier this year to protest new pricing policies. Mr. Keegan said these wholesalers' purchases are back to about 75 percent of their levels a year ago.
Recognizing that most of the marketplace is made up of “broad market” tires, Goodyear is working to reduce the break-even point for these lower-priced products, Mr. Keegan said. This plan includes taking greater advantage of lower cost manufacturing facilities overseas.
In addition, Goodyear plans to launch 20 new product lines globally over the next 12 months, including a “significant portion” of them in North America.