The U.S. tire market is arguably the toughest in the world. That’s why Yokohama Tire Corporation (YTC) hired veteran auto aftermarket executive Jeff Barna as COO. Here, Barna shares what he sees as the latest tire industry trends and challenges.
What trends do you see in the U.S. tire industry?
BARNA: Regardless of trends, people always revert to value. There are trends that are influenced by the economy and new car sales, technology, selling on the Internet, female buyers, millennials, etc. However, the one transcendent answer is to provide value. This means not only visualizing trends but translating them into solutions for customers.
The one trend that stands out most is the effect technology and the Internet will have on buyer behaviors in the future. Since we’ve elected to not compete with our customers by selling direct to consumers, we need to better partner in ways that help them thrive as the market shifts. Co-developing strategies to elevate their presence on the Internet and then supporting them with dynamic supply chain capabilities will be imperative.
What challenges do you see facing the U.S. tire industry?
BARNA: The three primary challenges I see are how the industry’s going about right-sizing capacity, how we’re managing supply chain, and overall spending.
Starting with right-sizing of capacity, it’s a dynamic manufacturing landscape. There are huge investments in brick-and-mortar manufacturing on U.S. soil. During the next 3 to 5 years, we’re going to learn a lot about supply and demand, and forecasting to a relatively mature market with new in-region manufacturing. Announcements come every week on multi-hundred million dollar commitments and it’s very exciting, but there’s a lot of unknown.
In respect to supply chain, I’ve been blown away by some of the worst fill-rates I’ve ever seen in any industry. I think it’s embarrassing and admit that as a result we are not achieving our potential in some segments. This is an industry that has the capability to be a lot better in order to serve our customers and their needs in the future, especially as they aspire to better manage working capital in respect to deployed inventory. There’s a tremendous amount of work to be done here.
Finally, I’m not convinced that a company needs to spend $200 million a year in TV advertising to achieve growth in this market. I’m concerned there really isn’t any evidence to substantiate the level of spending you see today. It would be great to see my company on TV every night, but a lot of what I see resembles a keeping up with the Jones’ mentality. I’d rather redirect our spending on grassroots marketing approaches that drive dealer loyalty and pull-through. We intend to calibrate very closely to where our customers ask us to invest to help them create traffic in their service bays. ■
For More Information:
Yokohama Tire Corporation is the North American manufacturing and marketing arm of Tokyo, Japan-based The Yokohama Rubber Co., Ltd., a global manufacturing and sales company of premium tires that’s celebrating its 100th anniversary in 2017. Servicing an extensive sales network throughout the U.S., Yokohama Tire Corporation is a leader in technology and innovation. The company’s complete product line includes tires for high-performance, light truck, passenger car, commercial truck and bus, and off-the-road mining and construction applications. For more information, visit www.yokohamatire.com.
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Modern Contractor Solutions, July 2017
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