JUPITER, Fla.—TBC Corp. is ramping up the Sailun “value line” brand it sources from China with additional Atrezzo performance passenger product lines and expanded size ranges in the Terramax SUV line, both designed with the North American market in mind.
The launch represents a “rebirth” of the brand in the U.S. following the end of the three-year run of elevated U.S. tariffs on Chinese consumer tires, according to Brian Mielko, vice president, marketing, Sailun Tire International Corp.
TBC has been Qingdao, China-based Sailun Tire's U.S. distributor for most of the past decade, but the tariffs from September 2009 to September 2012 cut heftily into the brand's sales and delayed new product development.
The expansion begins with the Atrezzo Z4+AS, an all-season version of the Sailun Atrezzo high-performance line available in 21 sizes ranging from 205/55R16 91W to 255/35R20 97W.
TBC is pitching the Z4+AS as a value-priced alternative to tier I and tier II major brands, according to Mr. Mielko, speaking to dealers and media representatives at a product launch/ride-and-drive event at Palm Beach International Raceway near Jupiter.
Company executives and dealers at the event said they expect the product to be priced roughly 35 to 40 percent below comparable tier I competitors.
TBC and Sailun are taking steps to demonstrate to U.S. dealers that the Atrezzo line, while priced measurably lower than competitors' products, offers on-road performance that is close or equal to that of major brands.
With the expiration of the tariffs last September, Sailun accelerated the development of new products for the American market, Sam Zhou, vice general manager for Sailun, said, resulting in the Z4+AS and the W-rated ZS-R summer UHP tire with asymmetric tread due out late this year/early in 2014.
These two lines complement the T- and H-rated SH402 and T-rated Touring LS all-season performance tires in the Atrezzo passenger line along with Teramax CVR, H/T and A/T and Atrezzo SVR LX light truck/SUV lines.
TBC, along with Dynamic Tire Corp. in Canada—the brand's Canadian importer and distributor—and Sailun, have coined the tag line—”With you through every turn”—and are backing up the premise with a limited treadwear guarantee, optional road-hazard coverage and marketing efforts to portray the brand as reliable and safe.
“It's important to remember that quality has nothing to do with country of origin,” Mr. Mielko said, “but everything to do with the technology in the factory.”
In relaunching the brand aggressively in the U.S., Sailun and TBC are relying on the “three pillars” of quality, trust and support to try and build brand equity.
In this scenario, Mr. Mielko said, quality refers to the firm's factory in Qingdao and its relationship with university-level engineering resources, trust is built through third-party testimonials/recommendations—including “blind comparison” testing such as that carried out at Palm Beach Raceway—and support comes in the form of broader warranty coverage and reliable distributors like Flynn's Tire Group or Sullivan Tire Inc.
Sailun's consumer tire sales in North America are in the 2 million unit range, he said, and the firm's goal is 15- to 20-percent growth in 2014.
Sailun is a relative newcomer to the tire business, founded in 2002 by private investors and taken public in an IPO in 2011. With sales last year of about $920 million, the Qingdao-based tire maker is the 12th largest Chinese tire maker and among the 35 largest worldwide, according to available data.
The company is growing, however, buying Shenyang Peace Radial Tyre and a 49-percent share of Shandong Jinyu Industrial Co. Ltd. last year, and building a plant in Vietnam.
Both acquisitions are intended to help achieve the company's expansion plans—Shenyang Peace's sales are estimated at $200 million—and to meet increasing demand from both domestic and international markets, company spokesmen said late last year.
The plant in Vietnam, in Tay Ninh province near Ho Chi Minh City, will produce passenger and light truck tires. It is scheduled to begin production in the coming months and be up to commercial-scale production before year-end.
Once the Vietnam plant is running at full capacity, estimated at 10 million units annually, Sailun will have at its disposal annual production capacity of 30 million car and light truck tires, the company said.
Sailun develops its technology in-house, Mr. Zhou said, and in partnership with the Qingdao University of Science & Technology, with whom Sailun is developing a National Tire Process and Control Engineering Technology Research Center.