Nash: My plan is to be president of YTMX and executive advisor to the OTR group in the U.S. I don't want to give up my passion for off-the-road tires so I'll be committing time to be both in the U.S. and Mexico.
Question: Is the distribution system in Mexico similar to the U.S.? What have been the challenges getting the new subsidiary rolling?
Nash: There haven't been many challenges at all. We have had to set up systems to accommodate business processes and transactions, but we have been working on those for years. In fact, because we were already doing business in Mexico even before the subsidiary, we have gained market experience that's made setting up YTMX that much easier.
Question: How do you plan to distribute the tires? Is it through a distributor or will you allow both distributor and retailer to buy from YTMX?
Nash: We prefer to distribute the products through the independent dealer, but can sell to the distributors.
Question: When it comes to dealers, is your strategy going to be quality versus quantity?
Nash: We will look for dealers who also provide service to the end-user. That is, dealers who are going to fit the tire on the vehicle. The dealers in Mexico we've been working with feel like we're one of the few manufacturers who really wants to partner with them. That's why we've been successful so far: we're partnering with a lot of dealers.
Question: Which market in Mexico – commercial, consumer or OTR – looks more promising for Yokohama in the near future?
Nash: Because Mexico has many mine sites and lots of natural resources, we've done extremely well in the OTR segment by selling giant earthmoving tires. However, I also see a great future for our commercial truck tire line-up and consumers in Mexico like high-performance products. In short, we've got the tires people in Mexico want and are buying, so now we're going to establish new dealers who can sell and service the products for us.
Question: What does YTMX do for Yokohama's presence in the OE market in Mexico?
Nash: It's going to give us the ability to improve supply directly to the OEMs and to improve service to the end consumer. We currently supply tires to OE factories in Mexico from our U.S. company. In the future, we plan to supply those factories from YTMX. We also work closely with the service divisions of car manufacturers in Mexico such as Chrysler. Anyone who has purchased a vehicle in Mexico with Yokohama tires on it is now going to have more reliable places to find and replace a tire.
Question: So you'll ship OE tires to YTMX?
Nash: Initially, we will focus on OE replacement tires to make sure customers that purchase a new vehicle equipped with Yokohama tires receive good service and can find replacement tires as needed.
Question: Is Yokohama planning to produce tires in Mexico?
Nash: There will be no manufacturing in Mexico at this time. Everything else in the supply chain will function just like YTC in the U.S.
Question: So you'll source tires from YTC's plant in Salem, Va., as well as from Japan and other overseas facilities?
Nash: Correct. We will support our dealer network with whatever is necessary to grow their business in Mexico.
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...