South Korean tyre company, Kumho Tire and Japanese tyre maker, Yokohama Rubber Co Ltd began discussing the supply of original equipment manufacturer (OEM) parts. Both companies also concluded a strategic coalition for research and technology last May, and are co-developing futuristic tyres.
The partners signed a Memorandum of Understanding (MOU) in late 2013 to start discussions of technology exchanges and a capital alliance premised on cross-shareholdings; and in middle of last year, they signed an R&D, and license and technology exchange deal.
To date, the firms are discussing supply scale, quantity, and supply start time, as well as the gradual increase of supply quantity in accordance with Chinese factory order trends and demand for OEM products. The supply will be immediately available this year if the partnership progresses fast, according to Kumho.
Kumho Tire expects that the supply contract with Yokohama Rubber will be helpful for improving the utilisation of its Chinese factories. As the US decided this year to charge anti-dumping tariffs to China-made tyres, which may decrease the capacity utilisation of factories in China, Kumho Tire plans to increase the utilisation of its Chinese factories by OEM supplying, which will enhance its coalition with Yokohama Rubber.
Relevant to this, Kumho Tire has decided to move to its factory in Nanjing, China by 2016. The company plans to build an advanced eco-friendly factory, which will high quality tyres with advanced facilities and technologies in accordance with market demands, which will enhance the companies’ products made in China, it said.