What do the changes to Falken mean for tire dealers?
The alliance between Sumitomo Rubber Industries (SRI) and Goodyear Tire and Rubber Company has ended, meaning big changes for Sumitomo’s U.S. business units. It will mean a few changes for dealers, too. Here’s what you need to know:
The split between the two companies means Falken Tire Corporation will become part of the new Sumitomo Rubber North America and Goodyear Dunlop Tire North America will be renamed Sumitomo Rubber.
The change will happen in two stages, with Falken Tire Corporation will be incorporated into Sumitomo Rubber North America on January 1 and the Goodyear Dunlop name change occurring by the end of March 2016.
Also by the end of March, responsibility for sales of Dunlop-branded Light Vehicle tires to Japanese original equipment manufacturers and sales of Dunlop Motorcycle Tires will transfer to Sumitomo Rubber North America.
What tire dealers need to know about the Falken renaming
Firstly, the Falken Tire product line will still exist and the company expects it to grow. The change is within corporate naming structures. Falken Tire Corporation as a corporate entity is changing its name to Sumitomo Rubber North America, and under this new corporate identity there will be some products (other than Falken Tires) that will fall under Sumitomo Rubber North America.
Falken Tire Corporation president and chief executive Richard Smallwood said the renaming would not affect dealers a great deal, but the realignment of the business would allow it to deliver better fill rates and a shorter time frame when developing North America-specific products. That means more stock in your store, faster.
“Tire retailers can expect to see higher fill rates, quicker delivery of product, and product more finely tuned for the market,” he said. “Eventually, our goal is to have all development for North American products to be conducted here, in market, so that we can better meet the unique requirements of the North American Customer.
“We expect to receive our first production from Buffalo sometime during the fourth quarter of 2016.”
It would also bring the business closer to the dealerships they supply, Smallwood said. Having a private test track in Huntsville, Alabama, will provide advantages when developing new products for the original equipment and replacement markets.
“And for those dealers we enter into Private Brand programs with, it allows us to work much more collaboratively in designing the unique products they are coming to us for,” he said.
“Another great aspect of having a test track located in the U.S. is that it will allow us to further strengthen the relationships with our original equipment manufacturer partners.”
Who is responsible for what after the split?
The newly renamed business will operate three separate sales divisions:
• Dunlop Motorcycle Tire in New York will be responsible for Dunlop Motorcycle Tire sales to original equipment and replacement markets.
• Falken Tire, in California, will be responsible for replacement sales of Falken, Ohtsu and private-branded products for the light vehicle and commercial markets.
• Sumitomo Rubber North America Original Equipment Sales, in Michigan, will be responsible for Dunlop-branded light vehicle tires for Japanese original equipment manufacturers and Falken-branded original equipment sales for all North American original equipment customers.
Sumitomo Rubber North America will provide centralized administrative and logistics support to all three sales divisions.
Changes will allow Goodyear to grow in U.S.
Sumitomo Rubber North America chairman and chief executive Keni Onga said the changes would allow dramatic growth in the business.
“The dissolution of the alliance between SRI and Goodyear will provide us the opportunity to quickly and dramatically enhance our service levels to our customers in North America,” he said.
“We now have local manufacturing, test facilities, and enhanced technical capabilities, all of which will help us better meet our customers’ needs.”
Falken’s Smallwood to head-up Sumitomo in North America
Falken Tire’s Richard Smallwood will become Sumitomo Rubber North America president and chief executive.
“Having gained a manufacturing facility, test track, and enhanced technical resources, coupled with our new multi-year sponsorship agreement with Major League Baseball and eight new product lines, we feel very confident in our ability to provide our customers the tools they need to profitably grow their business over the long term,” he said.
Sumitomo Rubber North America will maintain its headquarters in Rancho Cucamonga, California.