Kumho Tire Quality Door Triggers Changes in Tire Industry

Since Kumho Tire broke out of quality doors, Kumho suffered a series of blows such as the suspension of production at the Tianjin plant, the free recall of tires, and the strike at the Changchun plant. In order to restore the credibility of Kumho Tire, Kumho Tire began a large-scale publicity campaign.

On the afternoon of June 24, Kumho (China) Tire Sales Co., Ltd. and Wanyu Racing Team formally signed the title cooperation agreement. Since then, Kumho Tire has officially become the title unit of the Wanyu Team in the China Rally Championship (hereinafter referred to as CRC). In other words, Wanyu Racing Team will participate in the 2011 China Rally Championship with the title of “Kumho Tire Wanyu Racing Team”.

Not only that, Kumho Tire's spokesperson told reporters that in order to promote the company’s tires, Kumho also participated in the F3 European series held in Europe to show that the company’s tire quality is absolutely top notch.

High-end brands peek at low-end market

According to the test reports of Bridgestone, Dunlop, Hankook, Goodyear, Delicatessen, Michelin, and Pirelli tires in the summer of 2011 by Testworld Finland, many tire brands are stronger than Kumho tires. Why, Kumho Tire will become China's largest tire supplier?

“One is the low price; the second is the large scale of production.” Li Jianan, a research fellow of China Investment Advisor Chemical Industry, pointed out to reporters that the reason for the large sales volume of Kumho tires in China is mainly due to the large supply and low price. In recent years, the domestic auto market has been booming, and vehicle manufacturers have chosen to supply guaranteed tire suppliers. The output of Kumho Tire is relatively large and will naturally be favored by vehicle manufacturers. Moreover, Kumho Tire's pricing is relatively cheap, and vehicle manufacturers will also prefer Kumho Tires in order to reduce production costs and increase the vehicle's price reduction space.

After Kumho Tire was caught in the “Quality Door”, the sales market of Kumho Tire was under the backlog and squeezed. It has been reported that high-end tire brands will take this opportunity to seize the low-end tire market.

Li Jianan analyzed with reporters. On the one hand, after the outbreak of Kumho Tire, high-end tires are said to capture the market, and some owners will also give priority to the use of mid-to-high-end tires with better performance and quality. The proportion will increase. On the other hand, after the outbreak of the Kumho Tire problem, the quality standards and related systems in China's tire industry will certainly be further improved, which is very beneficial to the healthy development of the domestic tire industry. Moreover, domestic tires are now attaching importance to the quality and performance of products as well as the promotion of brands. The market competitiveness of domestic tires will gradually increase, which will also have an impact on the pattern of China's tire market.

How Chinese Tire Enterprises Break Out

In fact, there is no lack of technology-sized companies in Chinese tire companies. For example, the tires A, Qingdao Double Star, etc., but there is a certain gap between the brand awareness and performance and foreign tires.

Li Jianan pointed out that the reason for this situation is mainly due to the excellent performance of foreign tires and high brand awareness. Under normal circumstances, consumers buy tires are more concerned about the tire's brand and performance. For a long time, due to the small scale of production and the backwardness of technical processes, China's tire companies are all low-end products with low technological content and poor product performance. Moreover, related companies lack brand positioning, and have not attached importance to promotion of the brand, which makes the brand of domestic tires weak. While foreign tire companies have advanced production technology, their performance is better than domestic brands. Moreover, these companies have abundant capital and have more experience in brand promotion. After entering the Chinese market, their brand awareness can be quickly improved. Therefore, foreign tires occupy a large market share in China's tire market due to their excellent product performance and high brand awareness.

From all kinds of publicity activities of Kumho Tire, the company attaches great importance to the promotion and operation of the brand. This is also a concept that China's tire companies lack. It seems that domestic tire companies should also increase their attention and promotion of their own tire brands.