China's Triangle Tire Opens Its First U.S. Manufacturing Plant
Facing off against U.S. tire manufacturing giants, Triangle Tire USA, a subsidiary of Chinese company Triangle Tyre Co., weaves a story similar to many other Chinese companies attempting to break into the U.S. automotive industry in recent years.
Triangle, based in Weihai, China, produces more than 25 million tires each year. The supplier operates five plants in Weihai and supplies original equipment tires to customers such as General Motors, Nissan and Volvo in the Asian market.
But like many other Chinese auto sector companies, Triangle concluded that the next chapter in its growth needed to be North America.
And strengthening the global brand meant investing in physical operations in the U.S. to prove Triangle is ready to take on North American customers, Manny Cicero, CEO of Triangle Tire USA, told Automotive News.
Last year, Triangle announced it will invest $580 million to build its first U.S. manufacturing plant, in Tarboro, N.C.
"Having domestic production is a total game changer for Triangle," Cicero said.
"It lets the market know that Triangle is very serious about the U.S. market and is making the investment to back that up."
The Chinese company already had been building a presence in North America. Triangle opened a technical center in Akron, Ohio, in 2011 and established its headquarters in suburban Nashville in 2016.
Triangle expects initial tire production to begin in 2020. When the plant reaches full capacity by 2023, the supplier says it will produce about 6 million tires annually.
A 2018 sales forecast by the U.S. Tire Manufacturers Association indicates this is a good time to enter the U.S. market. The association expects to see U.S. tire shipments for passenger vehicles, light trucks and trucks to increase to 319.8 million units in 2018, up from 316.7 million last year.
Still, entering the U.S. market means taking on some notable tire giants.
Major tire brands Goodyear, Michelin, Continental and Bridgestone accounted for 72 percent of 2017 U.S. and Canadian original equipment tire sales, according to Modern Tire Dealer, a news magazine that covers the tire industry.
But the challenge of breaking into a mature market isn't stopping new players from coming here, says Anne Forristall Luke, CEO of the U.S. Tire Manufacturers Association.
"The U.S. tire manufacturing market is always changing and demand for tires is constant," she said. "Since there is growth in the U.S. market, we expect tire imports to remain constant and interest by overseas tire manufacturers seeking to establish a U.S. tire presence to meet market demands."
Last year, in a similar play to Triangle's, Singapore-based Giti Tire invested in its first U.S. manufacturing plant.
With over 200 original equipment fitments in China, Giti dominated the Chinese market. Last year, the supplier invested $560 million in a plant in Richburg, S.C., and says the plant will produce 5 million passenger and light-truck tires annually.
Jim Mayfield, head of sales and marketing at Giti, says the China-oriented manufacturer is relying on its solid reputation and its existing relationships with automakers to win business in North America, despite being a newcomer.
"We do a lot of OE business around the world, so we have relationships with many OEMs," Mayfield said. "In China alone, we are one of the largest OEM suppliers, so we have relationships and we utilize those relationships to help facilitate the development of the business here in North America."
Cicero says Triangle, with a management staff of U.S. tire industry veterans and its own reputation to brandish, is confident it can grow in North America.
"The U.S. is unquestionably a mature tire market with many established manufacturers. However, the Triangle value proposition is a strong one," Cicero said.
But building a U.S. plant is complicated for some at the moment. This year, China's Wanli Tire Group halted its project to build a $1 billion plant in South Carolina. Its unexplained move has spurred speculation that Wanli is spooked — as other Chinese firms are this year — by U.S.-Chinese trade tensions. (www.chinatrucks.com)
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