Australia is Kumho Tyre’s ‘company treasure’

KUMHO Tyre considers its Australian subsidiary a “company treasure” and is trying to replicate its success in other global markets including the UK and parts of Europe.

 

Its 5.3 per cent share of the Australian market is Kumho’s largest after South Korea and China, ranking it joint-third with Hankook – after Bridgestone and Goodyear-Dunlop – for national sales volume.

 

Speaking with GoAuto at the Ecsta PA51 performance tyre launch near Goulburn in New South Wales, Kumho Tyre Australia sales and marketing director David Basha agreed there were parallels between the company’s example-setting performance here and Mazda Australia’s status as a global standard for other export markets.

 

“We actually had our global director of sales (Changrin Suk) here, the number-two man in Kumho under the CEO, he calls Kumho in Australia the company’s treasure,” he said.

 

“They are now implementing a lot of what we do here in the UK and parts of Europe.

 

“A lot of the time they’re saying to their overseas branches, ‘Look at Australia, look how they market themselves, look at how they do things’.”

 

Mr Basha, a 30-year Kumho Tyre Australia veteran, explained that Australia is one of the only countries in the world where Kumho owns its warehouses and distribution and that this was key to its success.

 

“Our level of market share is the highest of anywhere outside of Korea and China and our distribution arrangements, our retail partnerships are the best in the world outside Korea and China,” he said.

 

“We decided very early on that we’d put our energies into having a lot of stockists. If you go back to the start, tyres are a low-interest product, a low-involvement product, so 99 per cent of the public have very little knowledge and very little care; it really comes down how well you get the tyres on the shelves of the tyre dealers.

 

“All of that is something we did in Australia and we did it ourselves with very little input from Korea. It’s something we’ve built here and the Korean headquarters of Kumho has really allowed us to grab the baton and go with it.”

 

Mr Basha said Kumho’s strengths in distribution, its mid-level pricing and use as original equipment by big-selling South Korean brands – including Holdens built there – had helped insulate it from Continental’s $350m takeover of Kmart Tyre & Auto Service (KTAS) last August, resulting in a rebranding of the 260-store network to Mycar.

 

“At first we thought it was going to be a big problem for us, but Mycar is saying they still see a place for Kumho in their portfolio,” he said.

 

“They believe our distribution systems are the best out of any of their suppliers, so they want to continue with us at this stage.

 

“Since Continental took over, their purchases of us remain the same; we’ve got a very strong relationship there.”

 

Though ongoing sales to Mycar and relationships with other major national chains not owned or affiliated with tyre brands such as Bob Jane and Tyrepower, Kumho has access to almost 21.6 per cent of the retail market, plus another 44.3 per cent made up by independent outlets, small chains and car dealerships.

 

“The closed market is owned or franchised by tyre manufacturers,” said Mr Basha. “It’s very hard for the 200 other brands to sell tyres into those stores.

 

“The rest of the marketplace is made up of independents and unaffiliated chains and we believe we have the largest market share in that portion of the industry.”