According to Rick Phillips, Yokohama Tire Corporation's director of Commercial Sales, 2012 could not have been any more contrasting from 2011. In this industry interview, Phillips, a 35-year tire industry veteran, discusses what the challenges were within the commercial tire industry in 2012 and how they will affect 2013.
Question: How would you sum up 2012 for the commercial tire industry? Was there anything that surprised you?
Rick Phillips: 2012 was very surprising. In the 35 years I've been in the industry, I've never seen two years back to back that were as different as 2011 and 2012. The unpredicted swing in supply and demand, and also the price of raw materials, made 2012 somewhat of a challenging year.
Question: What were the main differences between 2011 and '12?
Phillips: In 2011, we were coming out of the recession and had a bigger spike in recovery than expected. There was a lot of pent-up demand and very little supply – and the industry wasn't ready for it. This created a lot of product shortages in the industry. On top of that, the prices of raw materials increased dramatically. In 2012, it all switched: we saw demand slow down considerably, which caused inventories to build, and the price of raw materials reversed course and decreased.
Question: How did the different yearly scenarios affect Yokohama?
Phillips: Yokohama actually fared well in both years. The challenge in an unpredictable market is to maintain a high level of service for your customers while adapting and adjusting to the changes that are occurring. We were successful at doing this because we actually gained market share both years. In 2012, our total volume actually was down a little bit – like the rest of the market – but overall, we were able to gain market share.
Question: How were you able to maintain that high level of customer service?
Phillips: We place a very high priority on all aspects of customer service. It's very important to us that we are able to meet the needs of our customers. Everyone who touches the customer in our organization is empowered to a certain degree to make decisions that add value to our relationship with that particular customer. There are a lot of things that we have no control over but our level of service is something we can control and we do take that seriously.
Question: What are the hot industry topics right now?
Phillips: Fuel efficiency continues to be the hot topic. Fleets are trying to deliver more freight and burn less fuel. Tires contribute significantly to the overall fuel consumption of a vehicle, so the key is trying to make tires that are truly fuel efficient without sacrificing mileage and retreadability. We rely on our technology to accomplish just that without sacrificing the other elements.
Question: You're a big advocate of fleets maintaining the proper air pressure in their tires. Why is that important and how are you relaying the message?
Phillips: The single most effective piece of maintenance relating to tires is just keeping them properly inflated. This year, we developed a web-based air pressure calculator tool that calculates the correct inflation pressure by simply entering the tire information and load weights by axle. We're trying to be as creative as we can to come up with more solutions to help fleets lower their tire costs. Having properly-inflated tires is critical to help manage fuel consumption and ensure the wearability of the tire and the sustainability of the casing.
Yokohama Tire Corporation is the North American manufacturing and marketing arm of Tokyo, Japan-based The Yokohama Rubber Co., Ltd., a global manufacturing and sales company of premium tires since...