The theme of globalization loomed large over Chinese tire manufacturer Triangle’s latest Global Business Summit, held at Shanghai’s Shangri-La Hotel.

While the chairman of the board Ding Yuhua’s conference-starting speech riffed on the theme with regard to manufacturing processes, employee base and international trends, the presence of delegates from around the world reinforced the world’s 16th largest tire manufacturer’s message.

In the coming year, Ding said that Triangle is seeking to “speed up the transformation and upgrade [its] manufacturing to synchronize with the global economy,” while focusing on the environmental standards Triangle now characterizes as part of the “mainstream” in the post-REACH, post-labeling landscape – in China as well as the rest of the world. This involves greater investment in green production technology that he says is yielding a “4% increase in energy efficiency yearly.”

Yet environmentalism – the key theme in the 2012 Beijing summit – took a back seat to globalization this year, as Ding concluded his introductory remarks by mentioning Triangle’s intentions to “build an international talent pool, developing global strategy and cooperation and using regional resources.” This too was the subject of the assistant mayor of Weihai Municipality Chen Ning’s welcome address, which opined that in a global “economic slowdown… upstream-downstream communication” assumes greater importance, stressing the importance of promoting “global cooperation” and “international partnerships.”

The key example of this from the conference – and certainly the most important news to come out of the meeting this year from a U.K. tire business point of view – was the announcement of Triangle’s purchase of a 10% share in its U.K. distributor, Norfolk’s TYM International, as well as similar investments in Australia (Consolidated Tyre Co.) and Russia (SP-Tyre) in the first phase of the manufacturer’s “capital strategic collaboration project.”

This is one of the ways in which Triangle is demonstrating practical ways of implementing its globalization approach, as recommended by the conference’s first major guest speaker, economist Zhang Guoqing of the Policy Research Office at China’s Ministry of Commerce, who spoke in general terms about the opportunities and challenges facing Chinese companies attempting to globalize their operations. With a background of rising domestic demand for globally produced products, Zhang Guoqing reported that “43% of Chinese companies will pursue global growth strategies – more than in other Asian countries.”

However, he continued that reports were suggesting that some Chinese companies are not performing very well, with the result that Chinese enterprise globalization is reaching “only a medium level.”

The economist suggested a number of reasons for this, which mainly fell into two categories: first, he suggested that Chinese companies face a “culture clash” problem, including both the “legal and social frameworks” of other countries. Second, he talked about the “mismatch of Chinese quality or strength and companies’ large size” – in other words, too much growth “without reference to the quality of their technology.”

To tackle the latter challenge, he advocates shifting the primary focus to quality in order to “change the economic model from low to middle level.” One of the effects of upgrading the Chinese model should, he theorized, be “to use global resources better” and ultimately “create Chinese multinational companies.”

On the former, Zhang believes that the “biggest threat to Chinese companies is the inability to understand and adapt” to other cultures. With this in mind, he suggested that it was the “responsibility of Chinese companies to act with sales representatives in local markets,” which neatly coalesces with the idea of using global resources more effectively. Such a move is not a new idea for Chinese tire manufacturers, and Triangle’s action in buying shares in regional distributors in the U.K. – to go alongside its own sales office in Ireland – Australia and Russia certainly increases the brand’s involvement with its downstream distributors around the world.

Reacting to Triangle’s investment in TYM International, general manager Steve Eke expressed his satisfaction that he was pleased to have converted “the customer-supplier relationship into a partner relationship” with Triangle. Brian Tampaline, member of the sales team at the Consolidated Tyre Co., characterised the building of his own company’s relationship with Triangle in a similar way, when he spoke from the platform at the global business summit, mentioning the close working relationship distributor has built with manufacturer.

“Consolidated Tyre Co. has been distributing Triangle brand tires in Australia for more than a decade. Triangle is a core product in our company and we dedicate ourselves to the expansion and promotion of Triangle tires in Australia.”

The company partners with regional tire wholesalers in each state of Australia, and “actively supports them to gain market share. Most of our original distributors are still with us and several of them are here today. During the initial years, we recognized that we needed to distinguish the brand from its competitors, so we began to focus on Triangle as a product that can compete with established tire market leaders in quality, performance, value and reliability. We attended trade shows and advertised in industry journals, always with an emphasis on the Triangle brand name.

“This approach met accord with the market and enabled us more effectively to promote the brand, including significant penetration into the TBR and OE market. Triangle quickly became one of the best-known brands on the Australian tire market. The successful market penetration against established global brands in all market segments.

“Although our sales continue to grow, we recognize fierce counter-attacking from the established brands, suggesting that we need to move to another level to further expand our market share. In particular the passenger car tire market in Australia is very competitive. The top three global brands occupy more than half the market share through their comprehensive retail networks. Other brands such as Hankook, Toyo, Maxxis and Kumho successfully secured their market shares through local retail franchises. Therefore our next target is to build Triangle retail and service networks to support the brand.

“We work closely with Triangle market research. With the latest data published by the Australian Bureau of Statistics analyzing vehicle registration and new car sales data; attending domestic and international trade shows; and reacting to product feedback from our customers. The market research is important to us to understand our competitors, and to provide data such as new fitment sizes to the factories.” The Consolidated Tyre Co. also exhibits Triangle at many important Australian tire shows, and advertises the brand in “the most professional” trade publication.

Similarly, SP-Tyre representative Albert agreed displayed the sort of closeness in relationship Triangle now has with its Russian distributor, exemplifying the segments in which Triangle may wish to grow in the country. Triangle, he told the 400 visiting delegates, can now boast 5% of the Russian OTR market, compared to the market leader Belshina’s 49%. Like Tampaline, he mentioned how other tire manufacturers had “implemented tire service centers successfully in Russia,” such as Michelin with Tyreplus. He expressed his desire for Triangle to follow suit; to “disseminate its message through service centers.”

Partnerships are not limited to regional distributors too, as another speaker explained. Sophia Xing, country purchasing manager, Caterpillar China said: “In 2005, Caterpillar started business [relations] with Triangle Tyre. In the eight years that have passed, Triangle has already become a strategic partner of Caterpillar. In the years to come we are expecting to see a [continuing] close collaboration with Triangle.”

While this investment in its global partners forms one part of Triangle’s strategy – developing a closer relationship with existing distributors – it is equally the case that the company is developing its own globalized marketing strategy. One example of this has been the company’s operation in India, which began in 2012. General manager of Triangle’s India office K.C. Pillai spoke to delegates about how the company sees the Indian market specifically, what Triangle can do there and what it already has done there.

“India is a huge market for all categories of tires,” he said. “In 2013, India has got a total commercial tire market of around 16.5 million tires, from which around 5.7 million are radials – about 35% of the total market.” This market is growing very fast, but the expense of radialization is making local producers reluctant to proceed, Pillai explained. However, Triangle has tested its tires in the market with some success, the general manager explained.

“We don’t want to sell tires in India; we want to market.” Triangle is looking to make itself a more desirable brand in India through its marketing, and this is where its local India office comes in. Pillai tells of how Triangle was already able to demonstrate to commercial tire customers in India the additional PPK value it offers over the market leader, yielding improved demand in the marketplace.

“Basically what I’m saying is that we want to market the tyres; we want to give the customer what they want,” he said. The company has a small staff on the ground in India to create this additional demand, and to exploit the growing market for products there. Pillai also exemplified the potential in the Indian OTR marketplace for one size particularly, 2400/R55, which Triangle identified as a growth size despite a generally stagnant market.

Generalizing this discussion of Triangle’s own marketing activities, the manufacturer’s director of customer engineering at the Global Business and Market Development Center Art Villasol – who describes his role as “global customer technical service support” – told delegates of Triangle’s evolved approach and “progression over the last three years.”

With a mission to increase “customer satisfaction, quality, performance and value,” Villasol says that “customer engineering has become central to Triangle’s activities. Summing up the point of events such as these, he says that the “voice of the customer is the eyes and ears of Triangle.” The additional support on the ground that Triangle is currently introducing is designed to expedite communication upstream in addition to providing marketing support downstream.

Finally the executive president of the Global Business and Market Development Center, Lin Bin summed up “the journey of Triangle’s globalization” with a concise explanation of the strategy. He described the driving forces behind globalization as being “the demand of the [global] market… the drive of technology improvements…” and adding value to the brand name, for which he used a famous analogy: “Without a brand name, Coca Cola is just a soft drink, there’s no added value. But with the name, you feel safe, because it doesn’t matter where you are, you can still buy the same quality.”

The history of Triangle’s development into this area began, Lin Bin said, in 2008 with the first overseas office established in Russia with an accompanying Russian website. Five years, sales “grew from a low to a high level in the country,” Lin Bin said, as a result of the marketing groundwork the manufacturer had completed from the Russian office.

Now this strategy has continued in India, as explained by Pillai, where Triangle has started with the service, hiring four technical engineers in the process. It also set up the U.K. and Ireland office “and now we are about to be working in the mainland of Europe,” Lin Bin said. The new office “will be there [in Italy] very soon,” he said. Finally there was the establishment of Triangle’s global marketing office in Shanghai. In terms of regional marketing centers, Lin Bin declared the company’s desire to build more. “We also want to create more with our business partners,” he said.

“Approaching the market, we want to change the business model from a sales (make the product and sell it) to a marketing approach; from Shanghai center we are going to do marketing ourselves, employing market services, technology, support etc. He also suggested that more customer-facing initiatives, such as the new drift team sponsorship in Japan, would be forthcoming. “Shanghai is the center,” Lin Bin continued, “but detailed action plans belong to regional offices and distribution partners.

“We want to deliver what the market needs in terms of marketing and product supply – to do this we have to use a regional approach… focusing on individual market requirements. Our target is that Triangle presents to each country physically, and to get closer to Triangle’s partners and regional distributors so that we can get closer to their culture and understand what they need.

“We want to build our brand image, creating more value for customers. You win, and we win automatically,” Lin Bin concluded. (Tyres & Accessories)