QUINCY, Ill. (Aug. 2, 2006) — Titan International Inc. is phasing out the Kelly farm tire brand in favor of investing in its Goodyear and Titan lines.
Jeff Vasichek, Titan's vice president of sales and marketing, confirmed the phase-out should be completed by year-end. Kelly “doesn't fit the brand portfolio” and would give Titan duplication of lines it already offers with the Titan and Goodyear brands, he said.
“We have a complete line with Titan and the Goodyear, so we'll still have the full complement of products,” Mr. Vasichek said.
The Quincy-based tire and wheel maker doesn't expect any loss of sales from the discontinuation of Kelly, according to Mr. Vasichek, but in-stead expects a sales boost from the Titan and Goodyear brands, both of which have original equipment fitments while Kelly did not.
Titan purchased Goodyear's North American farm tire business late last year for $100 million including a licensing deal for Titan to pay a royalty to make and sell Goodyear and Kelly farm tires in North America. The acquisition includes Goodyear's Freeport, Ill., plant, which made an estimated 10,000 agriculture, ATV and light truck tires a day prior to the acquisition. Mr. Vasichek declined to disclose how many Kelly units were produced there annually.
Although Mr. Vasichek said Titan had “made it clear” that it would exit the Kelly line by year-end, Ron Thrasher, vice president of Quapaw, Okla.-based Burggraf Tire Co., said Goodyear began phasing out Kelly-brand farm tires even before Titan purchased Goodyear's ag tire unit.
“(Kelly) just started losing its luster over a year ago, I guess,” Mr. Thrasher said. “Just slowly but surely we could see the writing on the wall.”
Mr. Thrasher said he noticed then that the Kelly Tiremark LS2 line and other heavy implement tires were being phased out by Goodyear because of little volume movement. Today, he said all of his Kelly farm products are on close-out.
The discontinuation of the Kelly farm brand is not a big deal for Burggraf Tire's business as the wholesaler has had limited offerings in farm tires and is now buying most of its product from TBC Corp., he said.
Kelly, however, did comprise 15-20 percent of ag tire purchases for Lake Odessa, Mich.-based Jerry's Tire & Auto Service, according to President Mark Carpenter. About 50-60 percent of Jerry's Tire's total business comes from farm tire sales.
“Kelly was a vital part of our bias farm tire line,” Mr. Carpenter said. “That's the key. We have other lines of bias tires that we use as well. It was built in the Goodyear plant and it was a very easy sell for us.”
Since hearing last year that Kelly would be discontinued, Mr. Carpenter said he bought more Kelly in-ventory, so he doesn't see any changes in sales until 2007 when the Kelly line will be completely depleted. He said he's not sure where he stands in Titan's sales and marketing plans for Michigan, but he is a state distributor for Alliance-brand ag tires, partly because he wanted a backup brand while the Titan-Goodyear farm tire business deal was still being negotiated.
“All these imports keep rolling in and pretty much the farmers have accepted a lot of the import tires as well as a lot of import vehicles,” Mr. Carpenter said. “It's not like 'U.S.A.-built' is the most important thing to close a sale anymore.”
The end of the Kelly ag tire line isn't hurting the business of Denton, Texas-based Texoma Tire Buyers Inc., a longtime Kelly farm tire customer. Bob Farnsworth, owner of Texoma, a buying group with 95 participating dealers, said the Goodyear and Titan brands together are bringing in $3.5 million in ag sales this year for the group compared with $1 million last year for the Goodyear and Kelly brands combined. “The salesman that we have is doing a great job in changing the (dealers) over to Titan,” Mr. Farnsworth said.
Texoma also is looking at offshore farm tire producers as additional supply sources, he said.