Maxxis sustains gains in competitive tire market
Why enter established markets and deal with entrenched, dominant competitors when one could always go to new and untapped ones?
Somehow, this business strategy may have guided North Trend Marketing Corp. when, in 2001, it became the country’s exclusive importer and national distributor of Maxxis brand of tires.
Based in Cebu City, the company decided to first tap tire dealers around the Visayas and Mindanao area where 40 percent of the country’s tire market remained underserved.
“We saw growth here even during the mid-’90s when we were still a multiple tire brand seller. When we became the exclusive partner of Maxxis, it made sense to turn ourselves as the country’s preferred ‘replacement’ tire brand,” said Ronald Ang, North Trend Marketing COO.
For Ang, it’s not hard to market Maxxis tires to those looking to replace their worn out set. The $4-billion Taiwan-based brand offers a complete line of tires for cars, SUVs, busses, trucks, light trucks, and trailers.
In several markets in Asia, Maxxis is the original equipment supplier to Ford, GM, Toyota, Nissan, Volkswagen, Mitsubishi and Hyundai (Maxxis is the original equipment supplier of Nissan Almera here in the Philippines).
Maxxis is also the original equipment supplier of motorcycle tires to Yamaha, Honda, Suzuki and Kawasaki as well as original equipment supplier of scooter tires to Yamaha, Suzuki, Aprilia, Malaguti, Piaggio, MBK, Gilera and Kymco.
To be the tire supplier of big automotive brands means a lot for tire manufacturers as this partnership proves their capacity to come up with tire products with specific characteristics that complement the performance features of the vehicle.
“Just like its more expensive counterparts, Maxxis maintains several research facilities around the world, five in fact: in Taiwan, two in China, the United States and the Netherlands. These facilities, manned by hundreds of chemists and engineers, use state-of-the-art equipment to advance tire and compound design,” shared Ang.
Building more facilities
But while its competitors have shut down factories due to rising costs (especially natural rubber prices) and declining purchasing power, Maxxis in the past few years opened several manufacturing facilities in Chongqing and Xiamen in China, and in Taiwan.
In 2015, the company began constructing a manufacturing plant in the Indian state of Gujarat. It will be fully operational this year.
The biggest development happened in 2012 when the company opened a $150 million tire test proving ground located adjacent to its Maxxis International tire plant in Kunshan City, 50 km northwest of Shanghai.
The site covers 8 hectares, and comprises separate courses for testing tire performance at high speeds, braking, dry and wet handling, pass-by noise, ride, durability and noise, vibration and harshness.
The track also contains dedicated testing areas for hydroplaning and severe dry/wet maneuvering conditions, which has more testing capabilities than any other facility in China.
The testing facility is dedicated entirely to tire testing as it houses an impressive range of testing tracks and facilities within its 5.2-km perimeter.
Visiting this site last week, a group of motoring Philippine journalists and top North Trend performing partners toured the high-tech manufacturing facility and even rode high performance cars to experience how Maxxis tires are tested on different type of tracks.
“We showed our partners here in the Philippines that Maxxis is serious about tire research and development (three percent of Maxxis global sales revenue goes to R&D) and maintains some 400 engineers and scientists just to make sure the tires they sell (tires sold in the Philippines are sourced from Maxxis’ high-tech manufacturing plant in Thailand) are supported by world-class research,” said Ang.
Among the leading brands
Founded in Taiwan in 1967, Maxxis is currently among the world’s leading tire brands (currently aiming to become the 8th in the world) with operations in China, Thailand, Vietnam, the United States, Canada, Great Britain, Germany, Holland, Japan and United Arab Emirates (Dubai).
Its products are distributed in approximately 170 countries including the Philippines.
To strengthen the brand in the Philippines, North Trend tied up with a number of the country’s major tire dealers as well as small- and medium-enterprises, explained explained Jeffrey Ang, North Trend Marketing president and CEO, adding that the company relies on its network of strategically located warehouses that can store up to 300,000 tires.
“This means if one dealer needs a particular tire model, or is already running out of stock, we could immediately deliver these to them,” he said.
The company’s four satellite warehouses in the Visayas (Tacloban, Dumaguete, Bacolod and Iloilo) can easily deploy inventory in the region, while NTM’s three major depot in Cebu, Manila and Davao could easily service the needs of all its partners wherever they may be in the Philippines.
“Considering the fast-paced motorization of the countryside, we have improved the efficiency and reach of our distribution network.
“We now have more than 50 delivery trucks that are now being equipped with GPS device that could help us monitor progress of delivery and ensure safety of our delivery staff,” explained Emily Ang Quilacio, North Trend CFO.
She added that with the establishment of the company’s customer service system, North Trend can now handle any queries sent online or via phone.
“To keep out partners motivated, we regularly give out several perks including gift promos and travel incentives for top performers.”
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