Giti focuses on us investment and aims for measured growth
David Wilson Journalist and editor of the magazine Retreading Business
On-going profitable growth in both OE and replacement markets, the completion of the process of polarising their two brands, and, above all, the completion and leveraging of their recent investment in car tire manufacturing facilities in the USA will be the strategic priorities of Singapore-based tire maker Giti Tire for the foreseeable future. This was revealed by the company’s Executive Director, International Marketing and Sales, Chris Bloor, during an exclusive interview during the recent Asian Retread Conference in Kuala Lumpur, Malaysia. Of particular importance, said Bloor, was the company’s widely reported investment in the car tire plant in Chester County, South Carolina, which is currently in the ramp up phase.
“We consider this investment to be strategically wise given the current increased trade tensions around the world,” he explained. “Many Asian companies have talked about investing in North America, but not many have actually done it. The US investment is of key strategic importance for us, and the completion of the ramp up phase is currently our number one priority,” he added. Giti tires are selling through a number of major channels in the USA including Wal Mart and Discount Tire. In terms of global development, Giti is looking to continue its measured growth in many global markets, both as OEMs and replacements.
“We have made modest gains in the car tire sector with some OE groups such as VW and PSA,” explained Bloor. “We want to continue to expand our OE presence in order to establish and develop our technical credibility and to underscore the Giti brand. In the passenger sector this has been achieved both in Europe and elsewhere. We are also starting to enter the CV market at OE level, and in Asia we are now OE suppliers on Volvo and Daimler as well as on Schmitz Cargobull for trailer tires.” In the meantime, Giti has continued the process of separating and positioning their two tire brands, Giti and GT Radial, more precisely. Giti has been developed as the company’s premium brand, being also the brand used at OE level, with GT Radial being offered as a mid-range alternative. In Europe the company’s TBR range has now switched entirely to Giti.
Although Giti is developing these core company strategies proactively, Bloor is not slow to acknowledge the current challenges provided by the market, not least the heightening trade tensions in the market place and the growth of trade barriers on a global basis, which are forcing tire manufacturers with production facilities in China to consider relocating production in other Asian countries. “The consumer will ultimately be the loser as a result of this trend with less choice and higher prices,” he commented. “Ultimately these are short term disturbances with no longer term benefit.
“We are an Asian tire company with plants in China, Indonesia and the USA,” he continued, “so we can rebalance our manufacturing accordingly, but the cost of moving assets around is both high and inefficient, and the landscape remains unpredictable. Managing the situation requires high dexterity in supply chain management. We are already supplying tires to Europe from Indonesia. Indeed, the plant is now supplying European customers with the vast majority of the tires they had previously been supplied with from China.”
In terms of developments in other global markets, the picture is again one of controlled and steady growth.
“Our Middle East business in Dubai is now starting to bear fruit,” said Bloor. “We have a small team covering the Emirates, Saudi and Turkey, which is making satisfying progress. Meanwhile, we continue to have our established distribution channels in South America (mainly car). This is maturing well in spite of the geopolitical issues in Brazil. We feel South America remains a big opportunity.”
In Europe, Giti’s business is based in Hanover under Torsten Geherrman, and operates from Germany and the UK. In other markets the company uses nominated dealers. They also have an R&D company in Hanover under Stefan Fischer, whose mission is to produce concepts and adaptations for the European market. Testing is carried out using the facility at MIRA in Nuneaton in the UK.
Overall, the aim for the coming years can be described as “more of the same.”
“We live in uncertain times,” says Bloor, “so there are no big expansion plans or acquisitions on the cards.”
On the issue of the company’s continued perception as a Chinese brand in certain quarters, he says; “It’s not where it’s made, it’s who makes it. We rightly communicate the fact that we are a Singaporean global tire player. We try very hard not to be perceived as a Chinese tire company, because we’re not. People tend to use this argument as a lever to try and pressurise pricing. This is outdated logic, but it is a battle we have to fight every day.”
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