Kumho Tire USA Inc. is building its house, according to Harry Choi, its president. Its current focus is on constructing a strong foundation, focusing on some major Ps – price, product, promotion, and people – Choi told dealers and distributors at the tiremaker’s annual dealer meeting, held in early December 2014, in Vieques, Puerto Rico.

Over the past few years Kumho has struggled with pricing issues, fill rates, personnel turnover and having an old image in the market. But in 2015, the tiremaker is working on turning those things around, Choi said.

Part of its current five-year plan, which includes 2014, the tiremaker hopes to sell 10 million units locally and gain a 3.5% marketshare in the U.S. by 2018, Choi said.

“This number seems very ambitious,” he said. “Yes, it looks tough, but I say it can be realized with our best efforts and your help.”

One major component of Kumho’s plan will be personnel, Choi said. During 2014, the sales team was strengthened under the direction of Kumho’s new national sales vice president John Hagan, who came on board shortly after Kumho’s dealer meeting in December 2013.

“We worked really hard in 2014 to have a stable environment in the sales organization and in the field,” Hagan said. “We put internal policies in place and we have clear direction going forward within the sales team.”

Moving forward Hagan has set the goal of being the “easiest tire manufacturer to do business with.”

“I emphasize ‘goal’ because this is not a light-switch system. This is something we are working towards,” he said. “We want to know your problems and within 24 hours we want to get right back to you.”

Hagan said in the past Kumho has often failed at responding quickly. He noted that Kumho understands it needs to change and needs to be more proactive with its dealers.

“We want to be transparent with you. We’re not going to sugarcoat problems because that doesn’t help anybody. We’re going to tell you what we can do and what we can’t do,” Hagan said. “It’s a partnership. Our goal is not to be the yes/no company. Our goal is now, ‘How do we solve the problem?’ We’ll put all the cards on the table and work through the problem.”

In addition to changing internal policies for its sales staff, Hagan said the tiremaker has been working on internal systems designed to speed up processes to best support customers.

One personnel weak spot for Kumho remains the long-empty vice president of marketing position. Choi said the tiremaker will continue to look for the best person for the position and won’t hire just because the role is empty.

New Plant Coming

Another challenge Kumho faced in 2014 was fill rate. Choi noted that during the year Kumho had fill rate issues due to increased OE demand and the pending U.S. duties on China-produced tires – the tiremaker moved molds from China to South Korea in preparation.

Now that Kumho’s transfer of molds is complete, fill rates will be better, Choi said. Additionally, the expected opening of Kumho’s plant in Macon-Bibb County, Ga., in January 2016 will help with fill rate.

The first phase of the $410 million plant will produce four million passenger and light truck tires annually. Initially the plant will produce OE tires, replacement units will come later, Hagan said.

“Even if we start by producing OE, that frees up capacity for replacement in other factories,” Hagan said.

Depending on the marketplace the plant could undergo a second stage of expansion, Choi said.

Marketing Plans

In 2015 Kumho will also be making a strong push to raise brand awareness. “If we elevate the brand, it makes us stronger as a company and it makes it easier for dealers to sell our product,” Hagan said.

One way Kumho is lifting brand awareness is through its partnership with the NBA. The tiremaker is the “Official Tire Sponsor” of both the NBA and NBA D-League.

“This is a win for us,” Hagan said. “Being the ‘Official Tire Sponsor of the NBA’ brings a lot of collateral with it. Not just the brand building, but also the sales side. We can capitalize and engage our customers and consumers as well.”

Hagan noted that with its NBA sports marketing, the tiremaker can reach consumers via several different avenues including television, print, digital and social media.

During the 2015 NBA All-Star Week, Kumho plans on “taking over New York City,” Hagan said. The tiremaker plans to have a strong presence throughout Madison Square Garden and the Barkely Center as well as at the All-Star Jam session. Additionally, Kumho will have bill-boards in Times Square and wraps on trains running to and from the game. The event will provide millions of impressions for the brand, Hagan shared.

In addition to its NBA sponsors-hip, Kumho will be focusing on social media platforms, as well as online advertising on streaming networks such as Pandora and Hulu in 2015.

Focusing on Dealers

In 2014 Kumho made backend enhancements to its Premium Fuel Dealer program. Hagan said the associate dealer program will also continue to have quarterly promotions, and Kumho will give dealers a better heads-up for those programs so they can plan accordingly.

Additionally, Hagan asked dealers to share what local market charity events they’re involved in, as Kumho would like to help support those efforts with funds, tires and so forth. It’s the tiremaker’s plan to get more involved at the local level, he said.

One big announcement for Kumho’s dealers is the introduction of an Apple iOS app. Developed for iPhones and iPads, the Kumho app will allow users to browse products and check out detailed information about those tires. Additionally, the app features pictures and videos and an email-based sharing function. Hagan noted that the app would function as both a training tool and a sales tool for the consumer.

The app should be available for download some time in the first quarter, Hagan said, and eventually there could be an Android version of the app, as well.

New Products

Another way Kumho is making changes is by refreshing its product portfolio. The tiremaker announced six new tires that will be rolled out by mid-2016. But looking forward, Kumho said it plans to refresh its product offering annually from there on out.

“The new products are more competitive, meeting the demands of today’s environment,” Hagan told Tire Review. “We, for many reasons, didn’t refresh our offerings, so our dealers have been starving for new products. With all these new products, its refreshing the brand and its refreshing the enthusiasm of our customers.”

With its new products, Kumho is also focused on fixing its pricing policies moving forward. “In the past we had consistency and price-policy problems in the market,” Choi said. “We are trying to eliminate the spot deals and make a very stable and consistent pricing policy.”

Newly announced tires include:
• Ecsta V720: an extreme summer performance tire set to release in the second quarter of 2015. The tire is built for speed, and delivers unsurpassed corning, wet handling and extreme grip, according to Kumho. The tire will be available in 15- to 18-inch wheel diameters.

• Ecsta 4X II: a premium all-season UHP tire, available starting in the second quarter in 53 sizes between 15- and 20-inch diameters and with V and W speed ratings starting in mid-2015.

• Solus TA71: an all-season grand touring tire, to be available in the second quarter of 2015 in 38 sizes, covering 15- to 19-inch wheel diameters. The tire offers superb wet traction, winter handling, as well as a smooth, responsive ride, the tiremaker said.

• Solus TA11: an entry level all-season touring tire, set for a third quarter 2015 launch, will be available in 44 sizes over 13- to 18-inch wheel diameters.

• Road Venture AT51: an on/off-road light truck/SUV tire that is set for a second quarter 2015 launch. It will be available in 43 P-metric and LT-metric sizes, over 15- to 20-inch wheel diameters.

• Crugen Premium KL33: a pre-mium all-weather tire for SUV/CUV applications will be available in the second quarter of 2015, the tire will be available in 30 sizes between 16 and 20 inches. The tire comes in T, H or V speed ratings.

Kumho also discussed its Solus TA31, a high performance all-season, released in September 2014.

In addition to new products, Kumho said it simplified the naming for its consumer tires. Kumho now uses a four character naming system. The first two characters identify performance and season, and the set of two numbers identify the tire’s grade, from entry level to super premium.