Yokohama considering US, Mexico for new plant

Mexico City –Yokohama Rubber Co. Ltd (YRC) expects to announce later this year where it will build a new consumer tire plant in North America — in the US or Mexico.

“I expect a decision sometime this year,” Humberto Gómez, managing director of Yokohama Tire Mexico S. de RL de CV (YTMX), told ERJ’s sister publication, Tire Business recently.

Gómez said YRC already has decided to increase its production capacity in the North American Free Trade Agreement region. The new factory will be built either in the US or Mexico, he confirmed in a telephone interview.

“The (vehicle manufacturing) OEMs are the trigger,” he added, referring to a 2006 YRC plan – or “road map” – to double Yokohama’s original equipment sales globally by 2020.

Mexico – where a dozen major light vehicle companies either have assembly plants or are in the process of building one – is under consideration for the new plant because it’s on target to be assembling 5 million cars a year by the end of the decade. The country is the world’s seventh largest auto producer.

In an interview with Tire Business in early 2015, YTMX President Gary Nash said YRC was studying the feasibility of building a tire plant in Mexico, adding that the study was “at the beginning stages.”

YTMX began importing consumer, commercial and off-the-road tires into Mexico officially in May 2013. Since then its sales have grown by “close to 500 percent,” Gómez said.

“We are very happy. The market is very challenging, but fortunately the high end of the market is looking for Yokohama tires. We are a late entry but as somebody said, it’s better late than later.”

The company ended 2014 with 15 full-service retail outlets in Mexico and 2015 with 56. That has grown since to 73 and “will end this year with 100,” said Gómez, who added: “We also have our first Yokohama truck centre in the state of Querétaro.”

According to Gomez – who worked for Bridgestone Corp. for three decades before retiring, only to be persuaded by Mr. Nash to return to the industry with Yokohama – the Japanese company is recognized as a premium brand in Mexico “and our business model is very well accepted.

“My first objective was to open 25 Yokohama stores per year. (But) we’re going to achieve 100 stores in half the time we had forecast.”

Group Michelin recently disclosed it’s planning to build a $510 million tire plant in the state of Guanajuato, north-central Mexico. Production at the 1.58 million-sq.-ft. plant is expected to start in late 2018, with a capacity initially of 4 million to 5 million tires a year. The expected employment was not disclosed.

Elsewhere Goodyear is will under way with its $550 million tire factory in San Luis Potosí, 120 miles to the north of the city of Guanajuato. Production there is scheduled to start by mid-2017.

Pirelli Tyre SpA broke ground in June on a $200 million expansion of tire capacity at its 4-year-old car and light truck tire plant in Silao, also in Mexico’s Guanajuato state.

Production at the plant is scheduled to begin in the second quarter of 2017, Pirelli said, with an initial annual capacity of 2.5 million tires.

Pirelli said the new plant strengthens Pirelli’s position in Mexico and its growth at a worldwide level, and will increase its market share by meeting the requirements of export and domestic customers.

The expansion will bolster the Silao plant’s focus on the premium segment, Pirelli said, with production of high- and ultra-high-performance tires for cars and SUVs, for the NAFTA region markets.

The tire maker’s first plant at Silao covers more than 1.4 million square feet with an annual output of around 3 million tires last year and plans to grow to 5 million tires.

With this new investment, the workforce will be increased by 400 employees to more than 1,800, not including 400 ancillary workers.

Bridgestone is adding capacity at its plant in the State of Morelos, which borders on Mexico City to the south.

YTMX’s Gómez, who was the Brazil-based president of Bridgestone Latin America when he retired, said that one of the reasons for Yokohama’s success in Mexico is that “we are not very interested in big wholesalers. We concentrate more on retail.”

“In passenger tires, we are doing very well in high-performance and ultra-high performance tires.”

He said low-priced Chinese-made tires represent as much as half of the Mexican aftermarket.