LONDON — United Kingdom tire distributor Micheldever Tyre Services and Kumho Tyre U.K. Ltd. are ending a 15-year distribution partnership, in what has been described as a "mutual agreement."
The companies said Jan. 3 that the partnership would end in May, with the two working to promote the Korean tire brand until then.
The decision to terminate the agreement had not been taken lightly, said Tino Choi KTUK managing director — noting that it followed last year's acquisition of MTS by Sumitomo Rubber Industries Ltd.
"We firmly believe that this is the right course to take for the brand," Mr. Choi said. The strategy, he added, will contribute to Kumho's goal of becoming the "No. 1 mid-range tire" in the independent retail sector of the U.K. market.
For its part, MTS said the decision had been prompted by a "clash of long-term ambition" for the Kumho brand in the U.K.
"This is a disappointing conclusion to what's been a longstanding and mutually beneficial partnership," Micheldever CEO Duncan Wilkes said.
Since Kumho established a direct sales organization in the U.K., it had become "increasingly difficult" to work effectively in partnership with the tire maker, he added.
According to Mr. Wilkes, MTS did not share Kumho's vision for the future and the "view of what's in their best interests in the U.K."
Over the next six months, MTS said it will transition out of the relationship and move its business and customers' business to other brands.
Kumho set up its direct sales unit four years ago and has a distribution center in Leicestershire, a Kumho spokesman said. This has helped Kumho increase its network of independent retailers for passenger car tires and to re-enter the U.K. truck tire market.
"Following the transition period, the direct sales organization will need to focus further on working with independent retailers to promote the brand," the spokesman added.
The company works with more than 400 independent retailers, many of which are through Micheldever.
Kumho, the spokesman added, is now offering those retailers the opportunity to work directly with the tire maker.