GREAT NECK, N.Y.Amid the flood of Chinese-made tires coming into the U.S., Paramount International Tire Inc. is trying to set its trademarked brand, Sagittar, apart by promoting its quality.
Great Neck-based Paramount International, the U.S. arm of Paramount Investment Group Co. Ltd. of China's Shandong Province, was established in 2011 by Jeffrey Wang, a U.S. citizen who is the company's president.
A year later, the company began marketing the Sagittar light and medium truck tire brand, manufactured by Qingdao Doublestar Industrial Co. Ltd.
So far, Paramount has established distribution for the brand through 10 wholesalers, mostly on the East Coast. Mr. Wang said the company sells only container loads, which are shipped directly from China to its customers' warehouses. The wholesalers control their distribution and have exclusive territories, he said.
Paramount is looking to eventually expand the tire line.
The U.S. company also is the exclusive manufacturer's rep for the Boto brand, built by Shandong Wanda Boto Tyre Co. Ltd., and also markets the Winda, Dongfeng, Rapid and Shandong Shengtai Rubber Group Co. Ltd.'s Aoteli passenger tires.
Mr. Wang, who was born in Shandong province, said he uses his contacts with manufacturers there to bring quality tires into the U.S. market. The company has its headquarters in New York but also has an office in Qindao City, China.
He said Chinese tire companies are more focused on manufacturing than on marketing. They're not familiar with U.S. marketing, so sometimes they compete with each other with the manufacturer brand. That's their weakness. We want to build our own brand, he told Tire Business.
Chinese product right now is entry-level priced. It's very hard to warehouse them, the cost keeps adding up. It's very competitive. You have to watch very carefully the cost.... (Customers) try to compare your cost with others.
You can't compare a Sagittar with a BCT (for example) because we have a qualified manufacturer for the tire. We're very much about the quality. We don't want to be compared with the low quality stuff. But it's very hard to build the brand image.
Mr. Wang said his personal goal over the long runperhaps in 10 yearsis to build...the brand image. In 10 or 20 years we can build the brand value into the product, not only be competing on the entry level.
We registered the (Sagittar) brand with the U.S. government. We say Sagittar is a U.S. brand that is built in China by a quality company, a qualified manufacturer. It's not an easy job, but that's my goal to build quality stuff. It takes time for the customer to recognize the name and recognize the product and recognize your service.
He has been promoting the brand at the annual Specialty Equipment Market Association (SEMA) Show in Las Vegas and soliciting wholesalers by offering exclusive markets. Sales have increased the last couple of years but profit margins are hampered by the flood of entry level tire companies and their tires into the market, Mr. Wang said.
He noted that in the aftermath of the elevated U.S. tariffs on imported Chinese passenger tires in 2012, business increased dramatically.
On the other hand, a lot companies got into the U.S. market with no experience.
Because after the (elevated) tariffs were off, a lot of companies that used to only do business in the European market were coming to the U.S. market and that made business even tougher, he said.
Mr. Wang lamented the fact many Chinese tire companies conduct long-distance price selling via email rather than developing personal, on-site contacts with customers.
There are Chinese companies based in China that never come to the U.S., but they solicit business from U.S. customers. They send emails or make phone calls and solicit business with the lowest price. I have an office (in New York) to receive phone calls from our customers, he said.
When his potential customers come to him with lower prices from such China-based companies, his response is: Do you want to wire money to a company you never knew and to a country you never visit?
...I tell customers, 'Look, my company is based in New York. We pay the local tax, we pay the state tax, we pay the federal tax. Also, we bought the (product liability) insurance. The insurance is built into the tire price.
But if you buy directly from a company in China, who guarantees the products you receive or pays all the tax and duties?'
To reach this reporter: [email protected]; 330-865-6127.