MEMPHIS, Tenn. (July 3, 2003)—Del-Nat Tire Corp., looking to expand the commercial tire side of its business, is joining forces with Superstone Tire Co. Ltd. to provide Del-Nat a link to various Chinese manufacturers allied with Superstone for future development of products, services and logistics.
Already Del-Nat has secured exclusive rights for the sale and
distribution in North America of the Long March medium truck radial, made by Chaoyan Long March Tyre Co. Ltd. in Chaoyan, China.
Old Bridge, N.J.-based Superstone, formerly known as China Industrial Mfg. Group Inc., is the agent for six Chinese tire companies as well as the marketer of its own Superstone brand. Del-Nat is counting on its agreement with Superstone to allow it to establish direct relationships with numerous potential suppliers in China, according to Aaron C. Murphy, vice president of commercial products.
“There is exponential growth potential in the medium radial truck segment,” Mr. Murphy said, “and it's an area where our shareholders are eager to expand their business.” Truck tires make up about 20 percent of Del-Nat's business now, he said.
Mr. Murphy called the Long March product an “excellent value” and said the distribution agreement “sets the stage for a combined development effort on new products and sizes for North America…. Superstone…provides a presence in China that allows them to monitor all aspects of the development and manufacturing process on behalf of Del-Nat.”
Del-Nat will undertake some testing in North America of the new products it intends to sell here, Mr. Murphy said, and work with Superstone on sizes and tread patterns specific to the North American marketplace. Del-Nat's deal with Superstone also will allow the private brander to evaluate secondary supply sources for Akuret-brand medium truck radials—demand for which is outstripping the current supply, he said.
The dealer marketing group has worked with Superstone for about two years, buying the Long March and other branded products on a case-by-case basis, he said. Included in the mix is the Armour-brand industrial and bias-ply truck tire lines.
China is the No. 2 source of imported truck tires in the U.S., totaling 1.49 million units last year. The average declared customs value of a Chinese truck tire last year was $69.52, compared with the average value of $106.46 for all imported truck tires, according to U.S. Commerce Department data.
Superstone is affiliated with a number of Chinese tire makers, including: Chaoyan Long March; Xuzhou Haipeng Tyres Co. Ltd. in Xuzhou, Jiangsu Province (Armour brand); Henan Tyre Co. Ltd. of Jiazuo, Henan Province (Henan brand); Guizhou Tyre Group Co. in Guizhou, (Advance brand); and Yinchuan (Great Wall) Tyre Co. Ltd. in Yinchuan, Ningxia Province (Great Wall brand).
Del-Nat, created in 1989 by the merger of Delta Tire Corp. and National Tire Corp., already sources tires from manufacturers in Mexico, Japan, Taiwan, Europe, China and Israel, although the largest share is made in the U.S.