Yokohama Tire Corp., the North American arm of Tokyo-based Yokohama Rubber Co., expects to release new wide-base single tires and a new steer tire in 2011. Dan King, senior vp of sales & marketing for Yokohama, previewed the upcoming tire products and shared the company’s views of the truck tire market in general in a recently distributed report.
“We have been testing a trailer and a drive super-single tire with various fleets,” King said. “We will probably be launching the trailer tire sometime in 2011, and following it up with the drive tire. That’s an interesting segment to watch. Some fleets truly believe it will save them overall costs because it reduces the weight on the vehicle and has tremendous fuel efficiency. Other fleets do not like the risk of having one tire go out causing more downtime. Others do not want the expense of the conversion and don’t believe it’s a payback. We’re definitely watching it closely.”
King said the company is also planning to debut a new steer tire in 2011. “We have a new long-haul steer tire called the 101ZL that we’ve tested and are now ready to introduce in 2011,” he said. “We think the timing’s good. Besides the 101ZL and super-single, we have a new lower positioned economy steer tire that we’ll be evaluating for 2011.”
According to King, the commercial tire industry is generally growing again after weathering the recession and, for Yokohama, business has actually increased.
“Simply put, demand increased,” King said. “In 2009, there was a huge reduction in inventory levels almost across the board, including the tire industry, and the retail and consumer packaged goods. Fleets, for example, went so far as cannibalizing tires from their other trucks that were not in operation. Because of the recession, there was a lot of risk to carrying inventory.
“However, in 2010, the economy began to turn around and trucks started to get back on the road. Actual vehicles on the road, miles being driven and freight being hauled, are very good indicators of commercial tire sales and where the economy is going. All of those show signs of improvement and that we’re heading in a positive direction,” he said.
According to King, the biggest problem for Yokohama and the tire industry as a whole has been “fill rate.” He said 2010 “was definitely much better than 2009, but it also came with its challenges. The biggest issue for Yokohama and the industry was fill rate,” he stated. “It started really in the middle of the year, and it’s been very difficult for us to reach our increasing demand. Yokohama had huge increases in demand – actually higher than the industry’s – and it’s been difficult for us to supply to that demand.”
There are two primary ways to deal with a fill rate problem, according to King, taking the existing production globally and reallocating as much as you can to a particular country or increasing capacity, which takes much longer. Yokohama plans to allocate more production from Japan and expand production at other plants. “That’s an investment in the future, he said. “In 2011, we still expect to see some issues with supply, as will the entire industry.”
King does not see the shortage of raw materials which has plagued the tire industry abating any time soon, either. “Unfortunately, we do not see it [the materials shortage] letting up, especially through 2011,” he noted. “We’ve had to announce a price increase that started in January. Unfortunately for us, it’s not as high as what we’re experiencing in cost increases, so we can’t pass on everything. We’re willing to absorb that for right now, but we do believe raw materials will continue to escalate through 2011.”
