According to legend, Aeolus is the three-character mythic Greek ruler of the winds. As it took three entities to control the wind, it is little wonder that a company that grew up producing off-road equipment and truck tires has added a third option to its menu: consumer tires.
And, with the expiration of the Section 421 added tariff on imported China-made consumer tires, Aeolus Tyre’s plan to enter the U.S. market could not come at a better time, according to its U.S. general manager Mike Leverington.
The former Kumho Tire USA executive is tackling the ground-floor prospect with vigor, and plans to lay out the entire plan at the Global Tire Expo/SEMA Show this month in Las Vegas. There, he plans to meet with interested dealers to outline the tiremaker’s plans and program, which initially will include a pair of performance passenger radials.
Over time, as production builds at Aeolus’ new high-tech radial consumer tire plant in China, the brand will expand to include six passenger tires and three light truck/SUV lines.
We met with Leverington and toured the new plant during a recent visit to Aeolus at its headquarters in Jiaozuo, Henan Province, a heavily industrialized city of 3.6 million some 370 miles (as the crow flies) southwest of Beijing and hard against China’s main coal mining region.
Aeolus was founded in 1965 as the Henan Tyre Factory, and today it is publicly traded on the Shanghai exchange; Aeolus is part of the ChemChina Rubber Group, which includes four tire companies – Aeolus, Yellow Sea, Happiness and Torch. The ChemChina Rubber Group, in turn, is part of the giant state-owned ChemChina, which holds a 42% share in the Aeolus operation.
Globally, Aeolus (The most common pronunciation we heard – whether by Americans or Chinese – was ‘yoe-lus’) posted $1.6 billion in sales last year, making it the 20th largest tire firm, based on Tire Review research. In North America, Aeolus is probably best known for its radial medium truck tires, which are imported and marketed by the Alliance Tire Group. All told, Aeolus brand tires are exported to some 120 countries, with Europe as its largest non-domestic market, according to chairman Wang Feng.
The new consumer tire push in the U.S. (sorry Canada, there are no current plans to include Canadian distribution), though, is all Aeolus, with Leverington at the helm. The plan, according to Leverington, is to build a strong container-based program in the U.S., opening a formal sales office and eventually securing warehouse space to allow the brand to better meet customer needs.
New Plant
Leverington said the tiremaker will have two distinct passenger lines available for sale by the close of 2012, with more to come in 2013, including tires for pickup trucks and SUV/CUV-specific tires.
Meeting dealer orders will fall to a brand new passenger and light truck tire plant erected at a complex near Aeolus’ headquarters in Jiaozuo. Specific detail about the plant – size, output, equipment, etc. – was sparse, but Aeolus officials said that once fully fitted, the plant will turn out 15 million passenger and light truck/SUV tires per year, five million of which will be exported to the U.S., if plans come to fruition.
At the time of our visit, the plant was still fairly empty; tires were being produced from mixing through curing, and new single-stage builders, imported from Europe, were being installed, tested and worked into production.
The plant was inaugurated last year, but only recently began any notable production. Right now, the plant output was set at 8,500 tires per day. To meet its established production goal, the plant will have to produce some 43,000 tires per day, meaning it will need 25-30 of the high-tech builders in addition to additional compound mixers, bead builders, calendars and component cutting and prep stations.
First Products
In the U.S. consumer market, Leverington said Aeolus will focus on the touring performance, luxury touring, high performance summer and all-season and UHP summer and all-season segments.
Starting things off will be two performance lines – the Aeolus SteeringAce AU01 and the Aeolus PrecisionAce AH01 – both of which should be ready for delivery this year.
The SteeringAce is a summer UHP line with an asymmetric tread pattern “designed for precise steering and excellent handling characteristics on wet and dry roads,” he said. Purported to be fuel-friendly, the tire features four circumferential grooves with a solid center rib for handling and hydroplaning resistance, and a micro-siped tread for traction. While exact specifications are not yet available, Leverington said Aeolus initially will offer 35 sizes covering 16- through 20-inch fitments.
The PrecisionAce AH01 is a summer HP line that initially will include 22 sizes over 16- through 20-inch wheel diameters. Also with an asymmetric tread design, the PrecisionAce was developed to deliver “an excellent balance for high performance handling and ride comfort on wet and dry road conditions,” he said. As with its sister tire, the PrecisionAce has four circumferential tread grooves and a solid center rib, but adds jointless bead wire construction for ride comfort and overall performance.
In the light truck/SUV segment, Aeolus plans to focus its attention first on the HT and AT segments with the Aeolus CrossAce AS02 and Aeolus CrossAce AS01, respectively. Those tires will be available in 2013, with others to come later.
Market Strategy
Aeolus doesn’t plan to be just another entry-level Chinese brand for American drivers. Leverington said there are plenty of those available, and Aeolus’ earned quality reputation gives it a distinct advantage to a position as a “global value leader.”
While Aeolus has no consumer tire track record, the tiremaker has earned countless quality certifications and awards, including ISO9001 quality management certification, and a strong reputation in Europe. Looking forward, Leverington said the plan is to grow Aeolus into a strong top Tier 3 or low Tier 2 tire, putting them toe-to-toe with Nexen, Falken, Maxxis and Nitto.
In the future, he said, the brand wants to be “a top China brand in the U.S. market utilizing a full-line program.” Even as specific market demographics are being considered, Aeolus wants its tires to appeal “to the mass public that is seeking exceptional value” – a combination of price against real-world performance.
One thing is known: Aeolus’ “green” tire efforts in truck/bus radials will extend to its consumer products. The tiremaker promises that Aeolus passenger and light truck tires will be the first green tires by a Chinese maker. Raw materials will be selected and no aromatic oils will be used in the product. Production processes at the plant will reduce emissions and recycle water. Aeolus said its tires will be low rolling resistant, producing “up to 5% improved fuel savings.”
For now, Leverington is busy contacting independent distributors and dealers, working on training materials and product brochures, and looking to build a professional sales team to carry the Aeolus message across the U.S. The sales team, as with other plans, will grow as sales volume allows.
“Obviously, we will expand our efforts as our brand expands into the U.S. market,” an Aeolus official said. “In addition, it is our plan to establish a U.S. subsidiary as early as 2013 to provide closer support for our new client base. Eventually (and based on sales acceptance) we plan to establish additional distribution opportunities with a U.S.-based warehouse.”
