Jiaozuo, China –Aeolus Tyres is refocusing its global and domestic tire strategy in response to pressures created by US duties as well as to the takeover of Pirelli by its parent group ChemChina.
The company is pulling its PCR business out of the US since the anti-dumping and countervailing tariffs, while still expecting a lower double-digit growth rate in the country this year.
Aeolus only started selling PCR tires in the US market as recently as early 2013. And, according to Jason Rothstein, general manager of Aeolus North America, it was enjoying a “halo effect” as a result of the brand image already built up by the company in the TBR sector.
However, the company suspended distribution of passenger tires in the US after it was hit with the highest duties on Chinese-made tires, which tallied at 120.6 percent.
Nevertheless, Aeolus still looks to a comeback in the US market, said Rothstein – speaking to ERJ on the sidelines of the company’s 50th anniversary ceremony held on 19-20 Sept in Jiaozuo.
“There is too much growth attraction,” he said, adding: “We offer a bit of value in terms of dollars per mile compared to tier-1 manufacturers.”
Elsewhere, the company is putting on hold its expansion projects for PCR tires – the plan was for capacity to increase from 5 million unit/year to 15 million unit/year.
This is, in part, to allow dust to settle over ChemChina’s acquisition of Pirelli, while the company is also actively seeking expansion for TBR and OTR tires in southeast Asia, South Asia, the Middle East and Africa.
Aeolus claims to hold a 2.5-percent share in the US TBR market.
According to Rothstein, Europe has been Aeolus’s largest overseas market, followed by the US – its largest export market as a single country.
In 2014, the company saw a 17-percent rise in export sales to €600 million while its total revenue dropped 4 percent to €1.1 billion due to a sluggish China market.
In addition to its exports ambitions, Aeolus has also appointed new senior executives to further develop the domestic market.
“Our domestic [replacement tire] sales rose by 50 percent in first half 2015 and we will have doubled or tripled OE customers by the end of this year,” said Guo Shuangxing, the company’s general manager of international sales and marketing.
“Our total revenue should be recovered in 2016,” he added.