“… We are actually doing the work up front to make sure that we separate where we get these (tires) from, so you won’t have the same size coming from two different factories in two different countries. We’re managing our inventory and making sure that we don’t make the same size in two different places.”
Brennan said having local production is expected to help SRNA improve inventory management and give the company more flexibility in the face of changing market conditions in ways that are nearly impossible now.
“Let’s say we order on the 10th of August. That order that we sent to the factory on the 10th of August is for September production,” Brennan explained. “Depending on when it gets made in September, it’s about a month from the time it actually comes out of the mold before we get the tire.
“Basically, it can be up to a 90-day timeline,” he continued. “So we’re taking a forecast for what November’s supposed to look like, by size, by warehouse, and then guessing so that we can ship it and get it to that warehouse before we run out.
“And our fill rate stays high, but in reality you just have to keep more tires because you can’t really plan it out that well.”
With the Tonawanda plant running, the company will benefit from timely and more flexible manufacturing.
“Now we can send an order to the factory, and they can start being produced within the next week,” he said. “And the other thing too is we can get with the factory and change the production. ‘You know what, our sales just dropped in this tire. Take that size down and put this one in.’ ”
Brennan said local tire manufacturing is a must if the brand wants to extend its growing original equipment portfolio. He noted the company will add several North American fitments through 2018, but he did not identify them.
“There are a lot of fitments in the works now, and we’re trying to be as active as we can to expand our fitments for OE as fast as we can,” he said.
Regarding the Tonawanda plant expansion, the Japanese company said the project will “enhance our ability to produce tires locally for the North American market, focusing especially on expanding local production of SUV tires, which are in particularly high demand in North America.”
The move will allow the company to reduce sales lead times while enhancing its ability to supply high-performance SUV tires, environmentally friendly fuel-efficient tires and other high-value-added tires to customers in North America.
The plant—opened originally in 1923 by Dunlop Tyre Ltd.—has capacities for medium radial truck and radial motorcycle tires.
During the meeting, Brennan announced a price adjustment on several key consumer tires, including the Sincera SN250, Wild Peak A/T3W and Wild Peak M/T.
While the company’s newest products performed well at launch, slower-than-expected sell-out led to stagnant order growth from dealers, Brennan said.
SRNA determined that the impact of sales promotions on these tires was inconsistent and reduced prices on them in order to make the products more competitive.
At the same time, the company said it has cancelled its promotion on those tires for the third quarter.
Nearly a year has passed since SRNA’s Falken brand became the official tire of Major League Baseball, an agreement that has given the brand multiple promotional opportunities, ranging from virtual signage behind home-place to global marketing rights for post-season games.