It was because of that experience and expertise as a distributor that officials at Davanti decided to take the gigantic step from distributor to contract manufacturer.
"There were various frustrations I suppose with each brand, so in the end we decided to create our own brand," Mr. Cross said. "It was designed from the perspective of a distributor, because we understand the market, because we understand what distributors are looking for, we felt we could do a better job than a typical manufacturer. It's very much market-oriented."
The key component for distributor, he said, revolves around margin opportunity.
"There's no shortage of brands, probably 200 brands out of China and countless more from other countries," Mr. Cross said. "To select which brand to cooperate with, we feel distributors are looking for the ones with the greatest profit opportunity."
Profit opportunity means a quality product, with an extensive size range, more than the majority of the competition, he said.
"But most importantly, we have to find the right distributors and work with them exclusively," Mr. Cross said. "If we have the right partner, we're not looking to them to say, 'How many tires can you buy?' It's very much, 'Try the product, we know you're a great company,' and when you enjoy the profit that you can get from the brand, you're not going to have anybody competing against you.
"That will create the motivation to start building volume."
A typical manufacturer, he said, is looking to move volume and is "less selective about who they cooperate with, which then can create complications with competition between distributors, and that's the last thing we want."
He said Davanti works closely with the distributors to ensure the brand is positioning properly. "We don't want them take it and then destroy the position of the brand overnight. They have to respect how we want the brand to be sold."
Davanti began to transform from a distributor to a distributor/contract manufacturer in 2010. Mr. Cross said the transition could have been done in less than half the time, "but we took the view it's very much a rather 'be-right' than 'be-rushed' approach."
Davanti anticipates having 1.5 million Davanti units produced in 2018, "and we're gearing up with investment to grow capacity to 2.5 million in 2019," Mr. Cross said.
Five years ago, Davanti had 80 employees. Today, that number is 300, with plans to grow further.
The Davanti portfolio features:
- DX240, passenger, 10 sizes, 13-14 inch rim diameters;
- DX390, high-performance passenger, 53 sizes, 14-16 inch;
- DX640, ultra-high-performance passenger, SUV, 111 sizes, 16-22 inch;
- DX390, and DX640 run-flats, 6 sizes, 16-17 inch;
- DX740, H/T, SUV, 12 sizes, 16-18 inch;
- DX420, commercial taxi tire, 1 size, 16 inch;
- DX44, commercial van tire, 28 sizes, 13-16 inch;
- Terratoura A/T, all-terrain, 10 sizes, 15-17 inch;
- Wintoura, all-weather, 36 sizes, 14-17 inch;
- Wintoura+, winter UHP, 29 sizes, 16-19 inch;
- Wintoura SUV, winter SUV, 13 sizes, 16-19 inch; and
- Wintoura VAN, winter, 14 sizes, 15-16 inch.
The newest addition to the lineup is the all-terrain Terratoura, which was on display at the Panama show.
"There's a lot of demand for all-terrain. That's a growing part of the market in a lot of countries where they are already present, and that's one of the reasons we've been pushing to get the Terratoura into the market," Mr. Cross said.
The Davanti brand is sold in 14 countries, including most of Europe, the Middle East, Southeast Asia, the Caribbean, Canada and South Africa. The majority of its tires are sold in the United Kingdom, where Mr. Cross said consumers are drawn to the value of a Tier 2 product.
"From the U.K. perspective and a European perspective, there's movement from Tier 1 to Tier 2," Mr. Cross said. "The Tier 2 proposition is becoming more attractive...and we believe Tier 2 is a growing part of the market."
Antidumping duties thus far have prevented the brand from pursing the lucrative U.S. market.
"(Duties) have made it very difficult when we compete against brands which have their production outside of China," Mr. Cross said. "They have an edge over us at the moment. It's something we are conscious of, and as we develop over the future, we'll no doubt look at ways to combat that."
That might mean contracting with another manufacturer in another country not affected by duties.
"That's still not going to happen in the short term, or medium term, and we have a lot of markets to focus on in the meantime," Mr. Cross said. "However, the tariffs don't make it impossible — they make it difficult but not impossible. But we still have an opportunity to introduce the brand into the U.S. in the meantime."
