At the start of 2013, Jeff Schumaker took over as managing director of Cooper Tire Europe, moving to the company’s Melksham headquarters in order to take up the role. 
But Schumaker’s appointment wasn’t a U.K. debut, but rather a return to the country and to familiar faces. Schumaker’s first stint in the U.K. took place roughly a decade ago in 2002-03 when he was mentored by then managing director Ron Shield and worked alongside his immediate predecessor in Melksham, Julian Baldwin, who was then marketing and motorsports director.
Roughly four months after Schumaker took up the reigns at Cooper Tire Europe, Tyres & Accessories visited the company’s Melksham headquarters to see what direction the company is taking following the most recent change of leadership.
According to Schumaker, a return to the U.K. was always in the back of his mind but, with Baldwin having been MD for some seven years, it was said to have been something of a surprise when the opportunity opened up in the summer of 2012. Surprises aside, now that he’s in post the first move has been the further prioritization of sales and marketing considerations – something that is being rolled out across the whole Europe, Middle East and Africa (EMEA) region as opposed to Europe alone. And this has meant scheduling a punishing 15-countries-in-nine-months tour of the region, its facilities and key partners.
Of course with Western European tire demand in general down some 10% to 12% year-to-date at the time of the interview, it is not surprising that keeping the sales volumes fluid is a priority to the new managing director. But headline figures like this have a tendency of obscuring the subtleties associated with the enormous breadth of market conditions across a region as diverse in size, language, climate and requirements as EMEA.
While we know Europe as a whole is “challenging” to say the least, the U.K. is said to be in a “flat to small growth” state, while other markets such as Russia, the Middle Eastern region in general and South Africa are described as “seeing continuing growth.” Granted, this is not enough to offset the weaknesses of the whole European continent, but it does demonstrate the variety of conditions.
So, with such conditions in mind, how does Schumaker hope to address these realities? And with some of the largest tire manufacturers considering their European production needs, does volume restructuring figure in his plans?
“Supply/demand is pretty balanced,” comes the reply. Really, he says, it is about rebalancing the company’s supply to suit the complex route market the company intends to serve. Cooper’s Serbia plant is likely to play an increasingly significant role in this as its production is ramped up to capacity in the months and years to come.
With Schumaker specifically referring to the plant as an “opportunity to get localized” and offer “low cost supply across the entire region.” Of course Eastern Europe as well as the growing Russian market, which has a free-trade agreement with Serbia, are focal points, but there is a wider scope to deliver product from this factory where deliveries were previously arriving across the water; sourcing such tires locally clearly reduces lead time massively.
With this in mind, it is no surprise that the Serbia manufacturing lineup closely resembles the products that had previously been sourced from China – namely T to H-rate tires. The larger, higher speed rated tires as well as 4×4 products are still made in Melksham alongside motorsport and motorbike tires. There have been some “slight” changes in output in Melksham, says Schumaker, but this is now likely to stay the way it is for “the foreseeable future.”
So, while there will inevitably some back and forth between the two factories, for the time being each has their own game plan. And this is particularly likely to be the case as long as the Serbia plant is continuing on its development path.
Of course this setup, which requires a manager to balance local market production considerations with close-by but low cost manufacturing, is not new to Schumaker, who has experience at Cooper’s Corporación de Occidente, S.A. de C.V. production plant in Mexico. Having lived there for four years, there are said to be some striking similarities between this market and Russia, such as credit and currency volatility. Likewise, theft and stock security are said to be big issues in Mexico.
Are there headaches working in markets like this? Of course, but these challenges also bring with them some of the strongest opportunities. As far as production is concerned, Schumaker offered this advice: “In Serbia as in Mexico you have to be careful to fill it with volume, but not kill it with complexity.”
As far as brands are concerned, this means Cooper and Avon-branded tires are being produced in Serbia alongside a Serbian-market orientated third tier Mentor product. And of course this highlights how production choice at each plant is being determined by product type and size rather than by brand. All of which segues nicely into the conversation on the company’s brand strategy in general.
Moving forward, it seems clear that the company is putting renewed emphasis on the flagship Cooper brand, which will be made up of a full range of T- and H- to Y-rated products in summer, winter, 4×4 and light truck fitments.
As a footnote, it is worth mentioning that all of Cooper’s U.S. plants had been converted to clean oil technology by January of this year, which means the complete range is now available to the European markets. Previously it was only the Texarkana plant that was compliant. This conversion is a big practical and logistical change, but also means there is further impetus to bring the Cooper brand to Europe.
This means we will see the introduction of the CS-Sport line in Europe in the autumn as well as launching the successor to the CS6 (which is expected to be called the CS8) in the second quarter of 2014. All of this will be supported by more advertising and promotional investment than we have seen recently.
Furthermore, this is expected to bring with it an additional focus on consumer marketing as opposed to the business-to-business oriented approach of the past. Or in other words, the marketing department has identified that now is the time to familiarize the end-consumer with the brand and this specifically means an inside back cover advertising campaign in well-known men’s title FHM.
This is being supported by marketing effort across different media platforms. The company’s new Facebook page is a notable example of this. Cooper will continue to work with dealers to develop the value of the brand and its prevalence in the minds of those selling it. And it is worth making clear that this is a pan-regional approach (across EMEA) that will result in similar specific examples in other key markets.
Meanwhile Avon, a brand which is well known in the U.K. and able to achieve slightly higher prices than Cooper, will focus more on on-road and passenger car fitments (including some winter sizes).
The strategy here is one of positioning and clarification rather than any kind of removal of Avon, Schumaker explained, answering rumors that this was the end-game Cooper had in mind. This will come as a relief for those loyal to Avon in the U.K., where this brand is a clear leader over Cooper in terms of marketshare and able to bring in roughly £1 a tire more than its counterpart.
However, it has to be said that his position is nowhere near the same in the other European markets, hence Schumaker’s summary of the approach: “We are not removing the Avon brand, but will rather promote Cooper.” Indeed, there are said to be seven additional Avon sizes coming and investment in this brand is also continuing. The firm has also produced a new Avon Facebook page.
As far as the company’s other brands are concerned, private brands aside, Starfire is exclusive to First Stop, the Chinese-produced Austone and Chengshan brands are not being imported into Europe by the company themselves, Dean (a brand that is available in both the U.S. and China) is not expected to receive a European introduction, and Mastercraft remains a North American stronghold with the company leaving this to importers for the time being.
“Three brands are plenty. Too many may result in confusion and our advertising investment needs to be focused,” Schumaker explained. (Tyres & Accessories)
