Triangle sets up U.S. distribution JV, new brand strategy
LAS VEGAS (Nov. 14, 2014) — China's Triangle Tyre Group Co. Ltd. has established a joint venture with Oriente Triangle Latin America Inc., its Latin American distributor, to be its primary tire distributor in the U.S.
Triangle Tyre owns 70 percent of the new company, Triangle Tire North America L.L.C. (TTNA), which will work alongside it to develop a branding strategy for the tire maker's North American products as the firm pushes forward in its efforts to become a global brand.
At a press conference during Automotive Aftermarket Industry Week in Las Vegas, Oriente Triangle CEO Gustavo Lima said his firm is honored to be Triangle's partner in the U.S. market.
“The reason this has been done is because Triangle wants to assure customer service in North America, their market access for information, and testing and sizing information, and just information that the company needs to go forward,” he said. “They want efficient distribution and branding, which today is a major focus of Triangle.”
“The U.S.A. joint venture will be led by very high-level U.S.A. tire industry executives who will be in charge of the project, with the Triangle joint venture directors support and overall guidance.”
— Gustavo Lima, Oriente Triangle CEO
Mr. Lima told Tire Business the new firm will be based temporarily at Oriente Triangle's Miami office, but that will change with the appointment of the joint venture's president. The executive team is expected to be announced in January.
“The U.S.A. joint venture will be led by very high-level U.S.A. tire industry executives who will be in charge of the project, with the Triangle joint venture directors support and overall guidance,” Mr. Lima said. “We have been interviewing various executives and the search is continuing.”
Triangle Tyre along — with the yet-to-be-named president of TTNA — will establish the joint venture's distribution policy, Mr. Lima added.
“Established distribution agreements will be respected, with the U.S.A. divided into three marketing areas,” he said. “The complete marketing program will be developed and implemented by 2015.”
The operations plan for the new firm calls for regional distribution centers in the U.S. Potential distribution locations are being analyzed and Mr. Lima said his company's target is to have inventory in place by February.
As for its sales target for the Triangle brand next year, Mr. Lima said that is largely dependent on the results of the U.S. Department of Commerce's International Trade Administration's investigation against Chinese passenger and light truck tires. The deadline for a decision on whether or not to impose antidumping and countervailing duties on those tires is set for Jan. 20.
“We are waiting for the antidumping/countervailing hammer to fall to determine the path forward,” he said. “Triangle has a very strong TBR, ST trailer and OTR radial programs that will be our focus if the duties restrict the PCR/LTR tire lines.
“We are in this venture for the long haul. Triangle is determined to establish the Triangle brand in the world as a premium tire manufacturer that happens to be located in China.”
As part of its efforts to improve branding, Shandong, China-based Triangle is implementing a new branding strategy for tires in the North American market.
According to Tire Business' annual ranking of the world's tire makers, Triangle is considered the third largest tire maker in China and 15th largest worldwide, based on its fiscal 2013 sales of $2.7 billion.
Zhong Shen, global product manager for Triangle, said the principles behind its new branding strategy include using product names that can be easily associated with key segment attributes; ensuring greater clarity in its product lineups compared with the numbering system currently used; and being more consistent with naming in order to reinforce Triangle's brand equity across markets.
Triangle is represented in Canada by Dynamic Tire Corp.
The company also shared its plans to launch two consumer tire lines for North America by mid-2015.
The new offerings, both developed in conjunction with its Akron-based A3T L.L.C. technical center subsidiary, are the Triangle Protract value segment tire and Triangle Sportex premium ultra-high performance (UHP) tire.
Features of the Sportex include an optimized tread contact patch and large tread blocks for improved dry handling; three main center grooves with assisted lateral oblique groove for water drainage and wet grip performance; and an asymmetrical tread design with optimized pitch sequence, three silencer slots and high-angle CL radial groove for reduced noise during driving.
Triangle said the tire will be available in 34 W- and Y-rated sizes with wheel diameters from 16 to 24 inches. The tire maker will roll out 21 sizes during the second half of 2015 and add another 13 sizes to the line in 2016.
Key markets for the tire include North America, Latin America, Europe, China, Eastern and Southern Asia and Australia.
The Protract, part of Triangle's value offerings, was designed with advanced digital simulation to optimize the tread design for reduced rolling resistance, the company said. Features include low-rolling noise characteristics, even when worn; a narrow shoulder block, lateral grooves and four central grooves for improved grip during wet breaking; and solid longitudinal ribs for durability and handling.
The tire will be available in 33 sizes with wheel diameters ranging from 13 to 17 inches and speed ratings from T to V, Triangle said. The company will launch 25 sizes in 2015 and add another eight in 2016. Key markets for the product include North America, Europe, Latin America and China.
Triangle said it will support both launches with sales volume incentives, a trade media campaign and a dedicated end-user marketing campaign.
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