How has the COVID-19 pandemic changed the way you do business?
The continued impact of the pandemic globally and the strong post-pandemic bounce back in the American economy continue to create disruptions to the supply chain and logistics.
The supply-demand equation is out of kilter. The availability of containers, cargo ship space to move the containers; and port congestions, both loading and unloading, continue to pose significant challenges for importing tires.
Logistics cost increases, both ocean freight and domestic, combined with raw-material cost increases, will continue to be a challenge for the remainder of 2022. We anticipate that the supply-chain issues will continue into the first half of 2023 but will hopefully improve in the second half of 2023.
What is the status of your factory in Richburg? Have you been able to retain/recruit employees?
Production capacity was progressing ahead of schedule prior to COVID. At the present, we are adding equipment and expanding our workforce to reach full implementation of the master plan.
What continues to drive your growth?
Our products continue to be well received by our OE and replacement market customers, as well as the end users of our products. Our passion and commitment to the U.S. market is stronger than ever.
How important is the North American market to continuing your growth?
After well over 25 years in the U.S. market, Giti put down roots in South Carolina (in 2017), primarily to be more responsive to the market demands and to implement timely supply to our distribution channels. That commitment in the plant was progressing ahead of plan prior to COVID. We are anxious to regain the pace of the original plan.
Our passenger/light truck tire plant and technical center in Richburg represent a major commitment by Giti to the North American market. Our company continues to devote capital and human resources to the South Carolina facilities to help supply the North American replacement and original equipment tire markets.
What are you telling dealers who are unable to get certain tires?
As we work through the industry-wide disruptions in supply and workforce, Giti is poised for post-COVID growth. We are working closely with our customers to analyze the current and future product demands of the U.S. market. We are aggressively implementing R&D and manufacturing strategies to address those trends.
What are some of the pleasant surprises in the industry?
People are driving again. Even with the additional costs, our mobile society is again mobile. Miles driven has a direct impact on the tire industry as a whole.
What kind of trends are you seeing? How is your company reacting to them?
The replacement passenger and light truck markets continue on the path of larger rims, lower aspect ratios and higher speed ratings in general. Our plant in South Carolina was built around these trends. We continue to expand our lineups to meet these emerging sizes.
The strength is still in CUV growth, with consumer expectations centering on comfort and safety. Our GT Radial Maxtour lines, and in particular the Maxtour LX, fulfill the expectations for this group of consumers. The Maxtour LX delivers a premium ride and all-season performance with a 70,000-mile tread life warranty.
In the light-truck category, the GT Radial Adventuro HT, with a 60,000-mile tread life warranty, addresses the strong growth rate for SUVs and light trucks used for street travel and the expanding delivery markets.
For those who desire to get off the beaten path, the GT Radial Adventuro ATX line provides the look and the ability to venture off-road and travel back home in comfort and style. The Adventuro ATX, with a Three-Peak Mountain Snowflake (3PMS) rating, offers excellent balance between on and off- road performance.
The GT Radial Maxmiler Pro is designed specifically for the greatly expanding delivery segment and the range of delivery vans in the market today, including the Ford Transit, Nissan NV and RAM ProMaster.
With record inflation, are consumers looking even more for value-added tires?
"Value" is the key word. Consumers are looking for the optimum balance of price versus performance. As always, tire dealers play an essential role in advising their customers on which brands provide "good quality at a value price" for the customer's particular vehicle and driving needs. During times like these, we believe consumers are even more discerning in their tire selection and open to advice from their tire dealer.
What is the most compelling initiative your company has or is taking to address sustainability?
Reducing the impact on the environment in every production procedure has been a major initiative at Giti for many years, and the results have been encouraging. For instance, between 2017 and 2021 the company has reduced water withdrawal at its production facilities by 9%. During that same time period, NOx emissions from the plants have been reduced by 56%, SO2 emissions by 67% and GHG emission intensity has been reduced 14%.
The company deploys numerous initiatives at our passenger/light truck tire plant in Richburg, SC, to minimize its environmental footprint, including a hybrid cooling system that takes advantage of outside temperatures, hydrogen-powered fork trucks, and the utilization of water-based inks and reusable oil containment.
How do you explain the recent spate of price increases?
The cost of shipping containers has skyrocketed. Drayage costs at the ports have also gone through the roof due to port congestion and lack of manpower at the ports and in trucking. Much higher raw material costs have also hurt tire manufacturers.
We don't think these factors will stabilize in any significant manner for the remainder of 2022. Most economists are predicting high levels of inflation to persist through the remainder of this year and into the foreseeable future beyond. The wild card in all of this is a recession, which is looking more and more likely.