Kenda stays nimble; aims to prove performance

PHOENIX — Kenda Rubber Co. Ltd. prides itself on living in the margins — offering high performance at a great price — to give tire dealers plenty of wiggle room to make a sale.

Despite moving capacity for North America to Vietnam from Taiwan, a summer shutdown due to the COVID-19 Delta variant and the continued supply-chain issues around the globe, the company said it has remained focused on growing its U.S. presence by proving its worth.

"You've got to have the right sizes, and you have to have the right look. And the people who have it, they have to find it performs better than they expected," Brandon Stotsenburg, vice president of the automotive division of American Kenda Rubber Industrial Co. Ltd., said.

The Taiwan-based company has evolved over the years, investing heavily in its research and development capabilities. The second generation of Kenda's off-road Klever line is a prime example, the company said.

Kenda Tire USA Inc. showcased the Klever line for a group of tire dealers, wholesalers and media during the Kenda Light Truck Boot Camp in Phoenix, held Sept. 27- Oct. 1. They led a team of Jeeps along a route known as the "backway to Crown King," north to Senator Highway to Prescott, Ariz.

The trail through Prescott National Forest is terrifying when you feel as if you are about to roll off a cliff, but it's beautiful otherwise. That's sort of the point of off-roading, where the rush comes at a crawl.

The tires on an off-road vehicle need to perform under high stress and impacts in important moments. Of course, in the tire dealership, customers care about price.

Kenda said it believes its Klever off-road line stands out in the market because it offers what consumers want: top-tier performance at a value price.

The Jeeps for the trip — a mix of new Gladiators and Rubicons — were fitted with the Klever A/T2 (all terrain), R/T (rugged terrain) and M/T (mud terrain) as well as Tier 1 competitor tires for comparison.

The two-day journey tested the vehicles on loose soil and gravel, tough rock obstacles and even some mud. The pressure on the tires was not lowered — a usual thing in off-roading — because Kenda wanted to show what its tires could do when driven straight off the highway and onto the trail.

"When Kenda first came out (part of a joint-venture with Cooper Tire & Rubber in the early 2000s), it was a half a step above entry level," Mr. Stotsenburg said. "It was high quality, but the design characteristics weren't there. Kenda was just learning how to do passenger and light truck products."

The game changer in North America, he said, was building the Kenda American Tech Center (KATC) in Green, Ohio, south of Akron. The company said it is the third largest R&D center in the Akron area — behind Goodyear's and Bridgestone's.

At the KATC, which opened in 2015, the team designs tires for the North American market, assists in design of European products and seeks to improve the overall development process.

"Tires are one of the most complicated things to design. Everything is non-linear," Dave Shavers, manager and chief engineer of tire development at KATC, said.

The team of engineers have optimized the tires using virtual modeling. Being able to test a tire before its manufactured has made the whole process more efficient, he said.

Once engineers receive the criteria for a new tire (based largely on response from dealers), Kenda builds and tests computer models until they reach the criteria. Then the engineering team optimizes the tire to address concerns, such as weight or the look of the tread pattern.

"There are 20-plus components in a tire, and (through computer modeling) we can look at and test each to figure out what works," he said.

Once the tire is produced, it goes through extensive testing as well before hitting the market. The company said this method improves quality and performance and decreases a product's cycle time. It also makes scaling a line a faster process, the company said.

"With the second generation (of tires), we've reduced SKUs and increased product quality," Mr. Stotsenburg said.

He said Kenda is so proud of its product quality, it would put Kenda tires up against any competitor.

The difficult part is convincing dealers to see Kenda for what it has become, not what it was.

"We need to educate the wholesalers and dealers and give them the tools they need," he said.

"Our retailers can make a good margin on the sale. It's a great step aside product offering equal or almost equal quality as a Tier 1, but cheaper for the end user — and bigger margins for the retailer," Mr. Stotsenburg said.

The company has approached the design of its second-generation tires with three goals: realistic mileage warranty, full-line brand, and benchmark and validated testing.

The A/T2 is the least aggressive tire of the Klever line, designed to give consumers more highway driving benefits while maintaining the integrity of an all-terrain tire.

The Klever R/T exists in a "tweener" segment, according to the company, positioned as a best-of-both-worlds solution between the more highway, original equipment replacement-friendly A/T and super aggressive M/T.

The M/T is the company's most aggressive tire of the line. While the product is near the end of its cycle, the company said it still sells well. Kenda unveiled its second-generation, the Klever M/T2, at the SEMA Show in Las Vegas. The M/T2 improves upon the previous version — the M/T — in terms of mud, rock and loose material handling, as well as improving wet and dry handling and cornering, the company said. The product will launch in 2022.

Along with the M/T, R/T and A/T2, the Klever line also includes the Klever XT UTV tire for all- and ultra-terrain vehicles.

Expansion of future line sizes is something the company said it continues to evaluate depending on feedback from dealers.

Taiwan-based Kenda Rubber Co. Ltd. has proved to be nimble this year.

Mr. Stotsenburg credits Jimmy Yang, president of American Kenda Rubber Co., for the company's agility.

"We act quickly and can make decisions quickly, so as we identify market changes, we can move quickly," he said.

When the U.S. imposed high import duties on Taiwan passenger and light truck tires earlier this year, Kenda moved all of the manufacturing capacity for North American production to its plant in Vietnam, which was not assessed import duties.

Early in the pandemic, Kenda continued to produce tires when other tire manufacturers around the world were shut down.

In late July, however, with the Delta variant raging, the Vietnamese government asked Kenda to stop production. The shutdown lasted 50 days.

"Jimmy Yang, our CEO, has been putting a lot of effort into the safety standards to show the government the plant is operating safely," Mr. Stotsenburg said.

Kenda is not sure what impact the lost production will have but is planning accordingly to mitigate possible issues, he said.

"Kenda is a manufacturer in the United States as well an importer of tires to the United States, and we are seeing on both sides of that how the supply chain is effecting what we're doing.

"It's becoming increasingly difficult," Mr. Stotsenburg said.

Container costs have nearly tripled, vessel space is at a premium, and, he said, railroad lines and port systems around the world are also stressed.

Despite the challenges, he said, the company is focused on future growth. With more than $1 billion in global sales last year, Kenda is considered the 24th largest tire maker in the world by Tire Business based on sales.

"We're passionate about our brand, and what we've created," he said.