Mid-Year Report: Nexen has ‘ample' inventory to meet future demand

John Hagan, executive vice president of sales at Nexen Tire America Inc., said he believes vehicles miles traveled will spike as people get back on the road, and demand for tires will increase in the months ahead. He told Tire Business that Nexen will be there to meet that demand.

Q How would you describe business thus far in 2020?

A Challenging. 2020 has been a year of daily new challenges and the need to rise and meet them head on. While we always strive to showcase our support to our community of dealers and end users in various ways, it's been especially important that we do what we can to communicate this support system.

Q What are some of the key changes the company has made in order to keep employees and customers safe during the COVID-19 pandemic?

A Working from home and communicating with our customers and respecting their wishes on visits/meetings.

Q Do you expect any supply difficulties in the second half of the year? Why or why not?

A No, our factories are producing at normal rates in order to supply the three current warehouses, and we have ample of amount of inventory to support our customers' needs.

Q Nexen recently opened its third distribution center, near Columbus, Ohio. What are the advantages of that? How big of a region will the D/C service? How will that help your customers there—

A The third D/C will help us reach more parts of the U.S. in even quicker delivery times and more efficient distribution of fulfillment and logistics. In addition, our factories are producing at normal rates in order to supply the three current warehouses.

We have ample of amount of inventory to support our customers' needs.

Q What are some of the pleasant suprises you are seeing in the industry?

A People coming together; the communication between our customers and the Nexen Team has been very positive.

Q The United Steelworkers union has petitioned for antidumping and countervailing duties on passenger and light truck tires made in Thailand, South Korea, Taiwan and Vietnam. What is your company's reaction to that?

A We are working with the (International Trade Commission) and engaging in any and all conversation to ensure that the ITC knows and appreciates our position in regards to this petition. We are hoping for a positive outcome in regards to South Korea in general.

Q How might additional duties impact the industry?

A It is difficult to say at this time. Too early in the process.

Q Where do you see the industry markets heading during the second half of 2020?

A Getting back to "normal." While there will be a new normal and things will take time to get through all of our cultural phenomena over the course of 2020, people are anxious to get out on the roads, stretch their legs, breathe in new air. With more people getting back out there, there will be more of a demand for tires to get them there. Nexen aims to be prepared to meet that demand and support our dealers in every way possible.

Q Nexen recently rolled out the Roadian GTX, an all-season touring tire designed for the CUV and midsize-SUV segments in North America. How is that product being received? Is that a segment that has growth potential?

A While demand has been down for the obvious reasons across all segments, the Roadian GTX is still performing well. It's an excellent crossover tire in the fastest growing segment in the U.S. We anticipate once people start getting back on the roads again, this tire will continue to perform well.

Q Do you expect to roll out any additional products in 2020? And do you foresee any price hikes or any major investments in the second half of the year?

A No. Not at this time

Q How has the UHP market fared in light of the proliferation of LTs, SUVs and CUVs? Are you seeing growth and potential for future growth? Any new innovations in the segment?

A Sales of CUVs and SUVs are rapidly growing. This has led to an increase in UHP tire sales for CUV/SUVs. We will continue to see this UHP market shift in this direction, and we will continue to offer fitments for consumers' preference in vehicles.