Giti Tire Realigns to Better Serve Dealer Partners

Giti Tire Realigns to Better Serve Dealer Partners

After a decade of battling tariffs, Giti Tire executives discuss how the company has changed to better service dealer partners.

After a decade of tariff troubles and restructuring manufacturing, Giti Tire USA says it is poised to grow with its North American dealer partners into 2023 and beyond. Tariffs, followed by the pandemic and supply chain woes greatly affected the Singapore-based manufacturer. Yet, opening its North American manufacturing and R&D center in 2017 proved to be a strategic supply chain piece, and its leadership says it is ready after adjustments to serve today’s market.

“The good thing is, we are still here, and we are moving along,” said Wai Yeen-Phang, CEO of Giti Tire (USA) Ltd. “If you look back, we have had challenges, but what we have achieved… We have reinvented our structure. We are very integrated, and that is very important if we are to continue to make ourselves relevant to the market. We want to work with all of our partners in today’s environment.”

Hear from Phang and David Poling, Giti Tire USA’s director of tire development and product marketing, as they outline the future of Giti’s operations in North America and offer a look at the company’s business today.

Maddie Winer, Editor, Tire Review: You mentioned how Giti did some realigning of its manufacturing due to tariffs not too long ago. How have the results been from that reorganization?

Wai Yeen-Phang, CEO of Giti Tire (USA) Ltd.: Whatever had to be done was done. At this moment, our manufacturing facility [in Richburg, South Carolina] has stabilized and is actually gradually growing.

The US market, even today, is quite balanced in the sense that local manufacturing and imports are roughly 50/50 or so. That is our ratio as well. I believe that it will stay that way for some time, because even if all the manufacturers were to decide to do something about it, it still takes time.

Winer: Can you give me an update on the Richburg facility? With supply challenges for everyone, what does capacity look like there in relation to other manufacturing Giti has around the globe?

Phang: Manufacturing throughout the pandemic affected the whole world. But, coming out of it, we had a reasonable portion of supply embedded into the local market. But building up our facility has taken time. Then, there are the overall challenges, including the labor situation in the whole country, but our journey has to carry on. We looked at the setup of the factory and the processes to make sure that we were still able to catch up and hit our set direction [of capacity].

From the day we started, the factory was designed to be able to reach 30,000 standard tires per day. It depends on the product mix, but the factory is set to do this, and we are still moving in that direction. It’s just a question of the constant changes in the mix to stay relevant to the market. There might be minor changes here and there with the installation of new equipment. Every few years, we review and realign the factory according to manufacturing requirements.

We have been affected by labor shortages, but we have the core team [at the plant] and now we’re adding to the workforce to make things better. We are making headway despite all these challenges, and we are making great headway on product development.

Winer: Speaking of products, in 2019, Giti launched the Maxtour LX followed by the Adventuro HT. How have those been received by the market? What’s to come in 2023?

David Poling, director of tire development and product marketing: Both have been received very well in the market, both Maxtour LX and our Adventuro HT and Adventuro ATX. We all drive on those tires. We can’t produce enough, quite frankly.

Through the pandemic, we’ve continued filling up our development pipeline, but in trying to get through the pandemic and labor shortage, we need to figure out how and when exactly we want to start to launch these new products. That’ll be our next challenge. For 2023, I don’t think we’re prepared to say exactly what’s coming yet.

Winer: Are there any segments you all have your eye on?

Poling: Yeah, we’ve developed around a lot of the emerging segments. The all-weather category has really grown over the past five years. This new category between A/T and M/T, the R/T market, [has grown]. We’re preparing to fit products into both of those markets [all-weather and rugged-terrain]. We always test against the No. 1, No. 2 and No. 3 companies in the world so that we know our products are going to stand up against those from a performance standpoint. We feel we offer a lot of value to consumers by giving them a Tier 1 product at a price that’s not Tier 1.

You know, we also have OE fitments with VW, and so I think you’ll see more to come from the GT Radial line with OE and replacement lines in the future.

Winer: Many tire manufacturers have noted how working with the OEs has helped them learn how they need to design tires for the future, like for EVs. How is Giti handling tires for EVs?

Poling: We’re working with OE manufacturers on regular passenger and light truck tires as well as those for electric vehicles. Globally, we have R&D road maps on how we’re going to tackle these issues. With those types of tires, you have the increased weight from the battery, the increased torque. It really merits a new design in the tire. There are a lot of new technologies we have to roll out. There are new materials that we’re constantly working on as well as new designs. I think even the OEs are feeling their way through what the tire requirements are going to be [for EVs].

We’ve discussed the possibility of specific lines for EVs, and we need to go through more development with the OEs and even better understand [what’s needed]. Our China R&D Center has had a lot more experience and exposure to [EV tires], and we share our technology globally.

We do all our own design work, but we also tap into this global R&D network, which helps us quite a bit. So, we might see specific lines. Those will be short lines though, right now. It just depends on how fast EVs come out. The size proliferation that EVs are causing right now is crazy… We have high load tires now coming out of Europe. You’ll see more LT tires that are going to go on electric vehicle trucks to support the weight. So, this size proliferation just keeps getting worse.

Winer: What does supply and demand currently look like for Giti?

Phang: The market is the market. The US market has very defined selling seasons. It’s always this constant challenge of balancing supply and demand, especially where local manufacturing is not able to meet the total needs of the market. About a year ago, supply was an issue, and since then, I think the supply chain scenario has gradually improved. The challenge will still be local freight and stuff like that.

We’re participating in a major market [North America] that’s saturated with players. We have a very fragmented environment, so this is where the challenge is, but we have opportunities if we realign and reinvent ourselves. In the future, if you ask what the market scenario will be, it’s anybody’s guess. There’s this global upheaval and inflation that is beyond all of us that has impacted the local market and economies.

All we can say is we are ready to face the changes accordingly. I think this is the future of what the world is going to be.

Winer: What do you want dealers to know about Giti going into 2023?

Phang: Giti and the GT Radial brand are in a better position with more clarity in the market. We are in a better position to support dealers and grow our business.

Poling: Mr. Phang noted how we deliver to the market, so I think because of our R&D being located at the plant, we’re uniquely positioned to serve the market and be flexible. We do all our own design work and our hardcore engineering right there. Then, we do the manufacturing and product marketing, so we reach into the market to understand the market needs, the sizing…then that flows all through one team, through the design and into the manufacturing.

So, it’s highly integrated. I think it uniquely positions us to serve the market. It’s unique in my 35 years being in the industry. The other thing is the flexibility we enjoy if we need to change a product. We can accomplish that in the plant. Having that end-to-end development is a huge advantage. It helps improve our efficiency and drives our costs down.

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