Kumho Tire USA has weathered the storm of 2010 – a year riddled with the financial makeover of parent company Kumho Asiana Group, a sluggish economy and continued repercussions of the Chinese tire tariff – and is looking toward a bright future.
Somewhat appropriately, the tiremaker used the sunny backdrop of Los Cabos, Mexico, when delivering its positive message at the 2011 dealer meeting, which took place over the weekend.
“Even with all the challenges thrown at Kumho in 2010, and one of the worst economic downturns in recent history, Kumho has managed to keep the ship aright and forge a strong path toward the future,” said J.B. Kim, Kumho Tire USA president and CEO.
He explained that Kumho reacted to the challenging environment by changing the value proposition of its brand, realigning its sales force, restructuring its distribution network and changing its marketing focus, all of which occurred during “a time when the market continued to change more than anytime in history.”
“2011 will be full of changes for the U.S. market, but Kumho will be positioned to serve dealers’ needs both with new products and support,” Kim said.
Also on hand for the meeting was Kumho Tire Co. president and CEO J.H. Kim, who followed up with the remarks and promises he made to dealers at last year’s event.
“Last year at this time, I told you that Kumho tire will continue to be a significant supplier of tires to the U.S. marketplace, and I asked all of you to continue to believe in us as a valuable supplier,” said J.H. Kim. “I am proud to say my prediction had come true as a result of the wonderful support all of you have given to Kumho Tire USA in the past year.”
In 2010, Kumho forged a new agreement with its labor unions in South Korea in order to improve production efficiencies. “This will allow us to provide better product to you at a more competitive price,” J.H. Kim said. “As more than 60% of our production capacity comes from Korea, this was a major step in defining our future.”
He added the tiremaker also reorganized its management structure to speed decision-making and improve response time. “Even though you may not have seen the complete effects of this yet, you will feel the results in 2011,” J.H. Kim noted.
One major focus of 2010 was adapting to the U.S. tariff on Chinese-made tires. “Beginning in 2009 and into 2010, we were forced to realign the production mix of every factory we have,” J.H. Kim told dealers. “This alignment made it possible to modify which products were made in which factories so we can continue to bring Kumho products into the U.S. You have made it clear to us that you’d like more, and we will do our best to address your desires. You will see improvements in 2011.
National vice president of sales Armand Allaire explained to dealers the company’s supply chain management and logistics improvements, as well as its new client-centric focus. In 2010, Kumho Tire USA consolidated from five distribution centers to three. The remaining warehouses are in Rancho Cucamonga, Ca., Chicago and Atlanta.
“The consolidation allows what comes in to be more effectively packaged up and shipped to you. Our fill rates have improved because of this,” Allaire told dealers.
Kumho has changed to a “client-centric focus,” meaning that the tiremaker “cannot be all things to all people, therefore we must focus on servicing our key clients,” he noted. “We will focus on key retail and wholesale clients and align our products and services to our mutual interests.”
The result of the focus will be an improvement in the quality of products, procedures and relationships, Allaire added.
Boosting Brand Awareness
Vice president of marketing Rick Brennan presented tire industry and consumer trends that all point to a positive 2011, specifically a continued growth in business, a slow decline in unemployment and a steady growth in home sales and new construction. The end result will be increased consumer confidence. And to tap into that confidence, Kumho will continue to adapt its marketing strategy for better top-of-mind brand awareness, he said.
“We have to find a way to capture people in a moment of passion,” Brennan said. “If we can catch them at a football or basketball game when they are at the height of euphoria – and truly interact with them, not just have our name on a sign – then when it comes time to buy tires, they will associate the Kumho name with that positive connection. If we interact with a consumer when he’s having a positive time, he will remember us.”
Along those lines, Kumho will continue its sports marketing program, in which Brennan estimated Kumho staff personally interacted with one million fans in 2010. The tiremaker will shift away from general motorsports and instead place a focus on grassroots motorsports, car clubs and enthusiast groups. Kumho also will boost its Internet and social media presence.
The company also will increase advertising in trade publications and will create all-new point-of-sale materials, TV commercials, Internet ads, product videos and consumer promotions in 2011, according to Kumho Tire USA marketing manager David Koh. Kumho plans to partner with dealers for co-branding efforts in the trade ads and in stadium signage, he added.
New Rollouts
New for 2011 is the Ecsta 4X KU22, an asymmetrical all-season UHP tire designed to improve grip, cornering and braking both in wet and dry conditions, as well as in light snow, according to Kumho. The tire, which replaces the Ecsta ASX, will be available in July in 48 sizes ranging from 15- to 20-inch wheel diameters.
The Ecsta 4X is among Kumho’s tires that qualify for the tiremaker’s new 25% UHP Road Hazard Warranty, in which a consumer’s tire will be replaced if it has been damaged within the first 25% of treadwear, according to the company.
Also in 2011, Kumho will introduce additional sizes of the Ecowing KH30, which was introduced last year. Three SmartWay-certified tires – the KLD01e drive, KLS02e steer and KLT02e trailer – will replace original designs, which did not have the “e” and a fuel-saving image branded onto the tires’ sidewalls.
More details from the Kumho Tire USA dealer meeting will be available in the February issue of Tire Review.
