AKRON (Jan. 20, 2004)—Kumho Tire U.S.A. Inc.'s sales declined 8 percent to $305 million in 2003 as demand in China shut off passenger tire exports to the U.S. from Kumho Tire Co. Inc.'s plant in Nanjing, China.
“Because of the boom in China, the factory there was not able to support U.S. sales as much as it had in the past,” said David Hudrlik, Kumho Tire U.S.A.'s vice president of sales.
For 2004, Kumho's goal in the U.S. is to reach sales of $340 million now that it has secured additional supply thanks to the opening of Kumho's newest tire plant, a highly automated, modular factory in Pyeongtaek, South Korea, Mr. Hudrlik said.
“We have the demand,” he explained. “The issue is supply.”
The 2 million tire per year Automated Production Unit (APU) plant opened in October and already is at 100-percent capacity, Mr. Hudrlik said. It will supply original equipment tires to nearby Hyundai Motor Co. and Kia Motors Corp. facilities, freeing up capacity at other Kumho tire plants for replacement export. Parent company Kumho also is adding capacity at its Nanjing plant that will double annual capacity there to 10 million units by 2008.
Besides gaining much-needed supply, Kumho will step its marketing and advertising efforts in the U.S. in 2004. This includes doubling to 24 the number of dealer ride-and-drive events the company conducts annually. Kumho also will emphasize training this year as tire selling has become more complicated, said Rick Brennan, high-performance brand manager. He said tire dealers need to know about vehicles and help consumers match the right tire, tire size and cosmetic look for their vehicles.
“A lot of things in the industry are changing how dealers sell tires,” he said. “It's not all about the tire.”
Kumho also will launch a multimedia marketing campaign that will replace its broadline “Way to Go” theme with a new tagline, “Race Proven Performance,” said Mike Leverington, director of marketing. This campaign will target males, ages 18-34, who are enthusiasts and are interested in style and performance.
The tire maker will leverage its Sports Car Club of America and Championship Off Road Racing activities to create and sustain brand awareness among this younger target market, Mr. Leverington said. The campaign will include advertising on ESPN, ESPN2, MTV, MTV2, ABC, Fox Sports and Speedchannel, among other cable stations. It also will include a non-traditional marketing approach to males ages 16-24 via YouthAIDS, a charitable organization that taps into entertainment celebrities to advance its cause, Mr. Leverington said.