Rick Phillips, Yokohama director of commercial sales, assumed leadership of the division in January 2011. He recently offered his take on the current state of the business, as well as an outlook for 2012.
Phillips said that for Yokhama, demand continued to outweigh supply in 2011, making it "very frustrating to not be able to meet the expectations of our customer base." He noted the Japan earthquake/tsunami presented an additional set of issues the tiremaker had to manage through. "We actually recovered quite well and the impact was less than what it could have been given the severity of the situation."
Addressing increased costs, Phillips said, “Although raw materials have fluctuated of late, they have increased dramatically over the last two years. These include transportation, insurance, labor and related expenses. We have had to bear these costs but also pass some of them along, unfortunately. However, if you consider the past couple of years in aggregate, we still have not recouped the full impact of all the rising costs.”
As was the case one year ago, Yokohama is entering 2012 “with very little beginning inventory,” Phillips noted. “This alone will be a challenge but add to it a demand that’s forecasted to remain at high levels – especially within the OEM segment – and further pressure can only be expected on the replacement market. Although costs are probably not going to rise at the rates seen by tire manufacturers this year, they are likely to continue to escalate.”
Commercial tire demand will continue to be greater than supply, at least through next summer, he added. “Despite reports on the economy being on the brink of another recession, the trucking industry remains strong. Commercial equipment sales and future orders remain high, as does the demand for freight. It’s also interesting to note that amid all the bad economic news, we actually have had eight consecutive quarters of GDP growth. Not every quarter witnessed robust growth, but growth was achieved nonetheless.”
Phillips said Yokohama is exploring “a number of options all over the globe” to expand production, that would including the possibility of building a facility in the U.S. “We will continue to conduct research and will make a decision based on what is the most appropriate strategically for Yokohama on a global scale.”
In 2012 Yokohama will release the new RY647 steer tire, which the company said will offer a highly-retreadable casing, be extremely fuel-efficient and exceptionally resistant to irregular wear; as well as the 709ZL drive tire, a shallow and “ultra-fuel-efficient” drive tire and the latest addition to the company’s Zenvironment lineup.