Don't look now, but the imports are coming.
Farm tires might be the last bastion of American-made products dominating the market, but the situation is changing, with Chinese- and Indian-made tires making inroads and joining a small but growing cadre of marketers of European-sourced farm and forestry tires.
Import data indicate the number of farm and forestry tires has been increasing steadily the past few years, although the category is defined by a ``herringbone'' or similar tread, and therefore the data are not as precise as some other categories.
Nonetheless, the latest data from Global Trade Data indicate imports in this category topped 1 million units last year, with nearly half of them coming from China. It is thought, however, that a great portion of the Chinese farm tires are bias, and some could be considered implement tires, according to farm tire marketers familiar with the situation.
A recent newcomer to the market is India's Bal-krishna Tyres Ltd., which began marketing in the U.S. two years ago after initially focusing its export efforts on Europe.
Waluj, India-based Balkrishna Tyres markets its BKT-brand farm tires in the U.S. through Tyres International Inc. and Dunlap & Kyle Inc., which together cover most of the continental U.S.
The firm has committed $100 million in investments over the next few years to upgrade and expand its manufacturing capacities, focusing on increasing capacity for radials and larger sizes.
BKT derives about 65 percent of its $120 million in annual sales from exports to Europe, according to Executive Director Yogesh Mahansaria, who said the firm is eyeing a 10-fold increase in sales in the U.S. by 2010 to $75 million.
To effect such growth, Mr. Mahansaria said the firm will expand its product offering steadily until it is a full-line provider for the U.S., like it is in Europe-where it claims a 20-percent market share in the bias drive and implement segements.
A portion of BKT's share comes from off-take production, primarily for European makers such as Vredestein Banden, Nokian Tyres P.L.C. and Trelleborg Wheel Systems S.p.A., BKT said.
Also relatively new to the market is CGS Tires U.S. Inc., although the firm's product lines are not newcomers. CGS, the North American marketing arm of Czech Republic's CGS Ceske Gumarenska Spol. A.S., set up shop in Charlotte, N.C., in October 2004 not long after the parent company took over Continental A.G.'s farm tire business.
Prior to setting up the unit in Charlotte, the Czech firm marketed its Mitas brand in North America through independent wholesale distributors.
For now, CGS is trying to match its distribution network to availability, which CGS Tires President Neil Rayson admitted is limited. Business in North America accounted for only about 3 percent of CGS's global tire sales of $190 million in 2004, according to the firm's annual report, although that would have included only a few months of sales from the Conti acquistion.
In addition, Israel's Alliance Tire Co. Ltd. recently invested $2.5 million to expand capacity for radial off-the-road tires by about 20 percent, in large part to satisfy demand from Europe and North America, where farm and construction equipment keeps getting larger and more powerful.
The expansion coincided with an upturn in Alliance's fiscal performance last year, according to Manjri Shah, manager of Alliance Tire Co. USA Ltd. in Denville, N.J. In fiscal 2005, Alliance raised output 20 percent, restructured its debt and returned to the black after four straight years of losses.
Contributing to the sales improvement was a doubling of exports to North America, Ms. Shah said, and an expanded product line, pushing Alliance's sales here to more than $20 million. The firm introduced 27 tires last year, she said, including Alliance's first radial design for front-wheel-drive applications, an R1 drive tire for medium-horsepower tractors and two LS-2 forestry designs.
Alliance also added its first North American warehouse in Springfield, Ill., to augment its direct supply chain with an ``emergency'' inventory to serve urgent demands from original equipment manufacturers or dealers, Ms. Shah said. Some of the firm's larger distributors also maintain Alliance tires in their own warehouses.
Other companies marketing foreign-made farm/forestry tires in North America include:
* Galaxy Tire Co.-Galaxy-brand farm and OTR tires from Galaxy's plant in Serbia and other contract manufacturing sites around the world;
* Nokian Tyres Inc.-Nokian brand made in Finland;
* Trelleborg Wheels Sytems Americas Inc.-Pirelli- and Trelleborg-brand farm and forestry tires made in Italy and other eastern European countries;
* American Pacific Industries- Vortex and Armour brands made in China;
* China Manufacturers Alliance-Gold Farm brand made in China; and
* Foreign Tire Sales-the Fieldmate and other customer brands made primarily in China.