CYPRESS, Calif. — Toyo Tire & Rubber Corp. Ltd. and its North American subsidiary, Toyo Tire U.S.A. Corp., increased their sales and earnings in the first quarter of 2017.
The tire maker reported a 3.4-percent gain in revenue in North America to $398 million and 14.9-percent growth in "other" markets. Sales in Japan slipped 4 percent.
Roy Bromfield, president, Toyo Tire U.S.A. Corp., discusses business so far this year and expectations for the remainder of 2017.
•This story appeared in the June 5 print edition of Tire Business
Q: With the year nearing its halfway point, how would you characterize business thus far?
A: Toyo's business in the first half of 2017 has been solid, with overall growth exceeding the market, especially in light truck and commercial truck tire segments. We believe that this is a result of our customers responding favorably to our diverse and innovative product offerings, our growing brand strength and because we focus on being a high profit brand for our dealers and distributors.
What kind of forecast do you see for the second half of the year?
We are hearing of some softness in retail markets but are optimistic that as the spring turns into summer, this will disappear and retail sales will heat up. Commercial truck tire sales are robust, and we anticipate them staying that way.
Do you foresee additional tire price hikes in the second half?
We constantly monitor raw material movements and will raise prices, if necessary, to recoup raw material increases. It is too early to say if this will be the case for the second half.
What kind of trends are you seeing in the market?
The growth of the CUV segment in the U.S.A. is remarkable. We have already responded with the launch last fall of our Open Country Q/T, specifically designed for this important market. Moreover, our Celsius CUV, a variable conditions tire, offers year-round versatility plus winter-weather safety in one tire, again targeting the needs of the burgeoning CUV market.
What markets look to be strong, going forward?
The American love affair with light trucks, SUVs and CUVs continues. With our diverse range of products, from the Open Country series and Celsius CUV to the sporty Proxes S/T line, Toyo Tires covers rugged to refined offerings for our dealers to meet virtually every driver's need.
What are some of the issues that are causing challenges for your company?
We have grown Toyo at a very fast pace over recent years, which is a wonderful thing. But to meet this progression we have had to match our manufacturing footprint very carefully to our market growth, making sure we maintain high fill rates to our dealers and distributors.
What are some of the challenges facing the U.S. tire industry?
One challenge has been the about-face on truck tire duties for Chinese-manufactured truck and bus tires.
This has caused turmoil for dealers involved in the truck tire and retreading businesses in the U.S.A. Another challenge is how we as tire manufacturers will respond to the rapidly changing automotive landscape as autonomous vehicles, electric cars and other fast-evolving technologies meet both consumer and commercial mobility trends and advancements.
How has the new administration and/or political climate impacted business thus far?
For Toyo Tires, our U.S. replacement market results have been excellent since the elections, so we believe that we are operating in a positive business climate.