TOKYO — Yokohama Rubber Co. Ltd. (YRC) is consolidating its various off-highway tire (OHT) businesses into a single entity in a bid to reinforce its brand power and tap into growth potentials.
Yokohama will bring together its Alliance Tire Group (ATG) subsidiary with its own off-the-road (OTR) tire businesses under a new entity named Yokohama Off-Highway Tires. YRC bought ATG in 2016, spending $1.18 billion for the farm and OTR tire maker with factories in India and Israel.
The new company will have a global footprint with a leadership team based at offices in Tokyo, Boston, Amsterdam and Mumbai.
As the first step in this consolidation, Yokohama's OTR tire business in the U.S. will be combined with Alliance Tire Americas Inc. (ATA) at the beginning of 2021.
Yokohama Off-Highway Tires America Inc. will be based at ATA's head office in Wakefield, Mass., and headed by current ATA president Dhaval Nanavati.
Integration plans for rest of the world are being finalized and will be communicated in the near future, Yokohama said.
The consolidation move, according to the Japanese group, will result in a closer integration of Yokohama's brand power, diverse product lineup, and "superior cost competitiveness."
The unified global entity will offer the full-range of OHT, from small forklift tires to ultra-large radial off-the-road tires for applications in construction, industrial agricultural and forestry machinery.
Yokohama's ATG off-highway tire segment — which goes to market with the Alliance, Galaxy and Primex brands — reported sales of $660 million in fiscal 2019.
For the six months ended June 30, sales revenue declined 19.3% in the ATG segment to $278.5 million, reflecting reflected the adverse effect of the COVID-19 pandemic on demand worldwide.
The company also reports some OTR tire sales — including those of solid tire producer Aichi Tire Industry Co. Ltd. that is acquired in 2017 — under its Yokohama tire division.
ATG operates three tire plants — in Hadera, Israel, and in Tirunelveli and Dahej, India — and YRC recently disclosed plans to build a third OTR tire plant in India, budgeting $165 million for a factory in India's Andhra Pradesh Province.