ITEC: HZCR to open U.S. office, launch ‘Arisun' brand

CLEVELAND (Sept. 19, 2012) — China's Hangzhou Zhongce Rubber Co. Ltd. (HZCR) is planning to set up a distribution and sales subsidiary in the U.S. next year as it prepares to move more aggressively into the North American market, startng with a new premium brand, Arisun, company executives revealed at the International Tire Exhibition & Conference (ITEC) in Cleveland.

HZCR officials are still evaluating sites on the West Coast for the new subsidiary, to be called ZC Rubber American Inc., according to Larry Williams of L.J. Williams Consultants L.L.C., who is advising Hangzhou Zhonce on the move.

Hangzhou, China-based HZCR, the world's 10th largest tire maker, sees the establishment of a subsidiary in North America as a critical step in achieving legitimacy among customers, according to Li Ying, who handles marketing for HZCR's import & export department.

The Arisun brand name is a derivation of the meaning of HZCR's Chao Yang brand, Mr. Li explained. Chao Yang means “sun in the morning,” and Arisun is supposed to evoke a sense of the rising sun, which also could be applied to the company's efforts to grow in the American market.

Arisun brand tires, which are available now, hit the market with the advantage of already being verified as SmartWay fuel-efficient products under the Environmental Protection Agency's fuel-efficiency program, Mr. Williams said.

The brand is available in steer, drive and trailer fitments, in a range of popular sizes and designs engineered specifically for North American road conditions. The brand will be priced above the firm's Chao Yang and West Lake brands, which HZCR will continue to export and sell in the U.S. through existing distribution channels.

The company is evaluating dealers and distributors now to handle the Arisun line, Messrs. Li and Williams said.

The HZCR executives on hand at ITEC declined to quantify the firm's specific sales goals for the U.S., but the company derives about 5 percent of its global sales, or roughly $230 million, from business in North America. Overall HZCR generates about 70 percent of its sales domestically but said it expects the domestic/export ratio to move closer to 50/50 in the coming few years as exports expand.

HZCR is 75-percent owned by the Chinese government, with the remainder being held by institutional investors.