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May 11, 2015 02:00 AM

Import duties coloring brand landscape

Bruce Davis
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    By Bruce Davis, Tire Business staff

    AKRON (May 11, 2015) — The U.S.'s imposition of countervailing and antidumping duties on passenger and light truck tires from China — amounting to about 31 percent for most key companies, but up to 100 percent for many others — is starting to impact the tire brand landscape in the U.S. as some brands are being phased out and the producton of others being moved out of China.

    Tire Business research shows at least half a dozen Chinese brands have been affected in this way. Among the brands that have ceased distribution of consumer tires in the U.S. are Aeolus, Blacklion, Kingstar, etc.    

    Aeolus Tyre Co. Ltd. was one company particularly hard hit by the U.S.'s import duties decision, being assessed combined duties of 101.8 percent. Mike Leverington, general manager of Aeolus Tire America, said the company felt those level of duties would be difficult to absorb and instead decided to redirect its consumer tire export capacity to other markets.

    • This story appeared in the May 11 print edition of Tire Business.

    It should be noted the Aeolus commercial products are unaffected and continue to be distributed by Alliance Tire Americas.

    Additionally, Independent Tire Dealers Group L.L.C. dropped the Diamondback brand and Tire Alliance Group dropped the Auto Grip, Blacklion and Runway brands in favor of Achilles and Vee, produced in Indonesia and Thailand, respectively.

    Passenger tire imports from China fell 59 percent in the first two months of 2015, Commerce Department data show, contributing to a 13.2-percent drop in overall imports. In unit terms, the drop is more than a million tires a month.

    Thailand appears to be the winner in terms of which countries are taking up the slack for the dropoff in shipments from China. Imports from Thailand jumped 25.5 percent in the first two months of 2015, putting it nearly on par with South Korea as a source of tires.

    A portion of that gain can be traced to Linglong International Tire (Thailand) (LLIT), the Rayong, Thailand-based subsidiary of China's Shandong Linglong Tyre Co. Ltd., which opened the plant in early 2014 with annual capacity initially of 2 million tires with plans to quintuple that to 10 million.

    One company contributing to Thailand's rising exports is Foreign Tire Sales, which has shifted production of its Prometer line to Linglong International.

    Foreign Tire decided to make the move last fall and is ramping up production in Thailand as rapidly as possible, a spokesman said. The shift involved moving molds from China as well as providing LLIT new ones; the plan was delayed earlier by warehouse fires at the Linglong plant, but that's now been sorted.

    Separately, Linglong has set up its own U.S. subsidiary, Linglong Americas Inc., in Medina, Ohio, to help coordinate marketing and distribution in the U.S.

    In addition, Vee Rubber Co. Ltd. is adding roughly 3.5 million units of new capacity to its Bangkok car and light truck tire plant, in large part to serve growing U.S. demand for quality entry-level tires.  

    Other nations showing gains in exports to the U.S. are Canada and Mexico, up 16.9 and 11.9 percent, respectively, the data show.

    Other changes of note:

    Bridgestone Americas' Tire Wholesalers Warehouse (TWW) subsidiary has revived the LeMans brand, which has been out of circulation since 2010/11.

    TWW will launch the brand in July, with three product lines — Performance A/S, Touring A/S and SUV A/S, produced under contract in China.

    TWW will distribute the brand to dealers through its 22 warehouses and has set up a separate website, www.lemanstire.com, that will have details of the brand's launch, etc.  Bridgestone will market the brand as a Tier III product, according to TWW.

    Goodyear revamped its Kelly-brand economy tire lineup earlier this year, moving to a “power line” concept that will cover the performance touring, passenger, CUV, SUV and all-terrain segments with two offerings under the Kelly Edge umbrella.

    The power line revamp includes the launch of the Kelly Edge A/S and AT, in part to help retailers reduce their inventory. The A/S line replaces the Kelly Charger GT, Safari Signature and Explorer Plus models, while the Edge AT replaces the Safari ATR.

    Related Articles
    Aeolus down but not out of U.S. pass. tire market
    ITC votes in favor of duties on China tire imports (Update)
    Aeolus revamping global strategy
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