Kumho Tire U.S.A. Inc. will look to boost share aggressively in the medium radial truck tire market over the next couple of years as its parent ramps up capacity in South Korea and China.
The U.S. subsidiary of Kumho Tire Co. Inc. has seen its share of the firm's output of medium truck radials remain right around 300,000 units for a number of years, David Hudrlik, Kumho Tire U.S.A. senior vice president of sales, said at the firm's annual dealer meeting in Nuevo Vallarta.
``Our capacity for medium truck radials for the last eight years has virtually stayed the same in terms of what's available from the factory,'' Mr. Hudrlik said. ``Any increase has been at the expense of another market that may have had a downturn, and I would be allocated more product.''
In fact, 2005 was the first year in which Kumho Tire U.S.A. was given substantially more product to sell, receiving 360,000 units-up about 10 percent from the prior year.
That will change, however, as the parent company looks to boost tire capacity substantially over the remainder of the decade. Mr. Hudrlik told dealers Kumho's worldwide tire capacity will climb to 48 million units this year and 52.4 million in 2007, up from 44 million in 2004.
He said the capacity boosts will enable the U.S. business to go after the medium truck radial market more aggressively. The first step will be to reach 500,000 to 600,000 units annually, said Rick Brennan, Kumho Tire U.S.A. director of brand management. ``It all depends on timing and what the market is like in 2007 and 2008.''
Mr. Brennan told dealers the commercial truck tire market generally follows the U.S. industrial production index. Original equipment sales in the sector have grown recently, and ``as long as the economy keeps rolling along and all these trucking companies keep buying new equipment, that will continue,'' he said.
To go beyond the 600,000-unit mark, Kumho would need to build more of an infrastructure in things such as technical service to support trucking customers. ``Right now, we have that function, but we have to expand it, so we have a lot of things we need to do to go beyond (600,000 units),'' Mr. Brennan said.