Triangle moving to make its mark in Europe
In 2016 Triangle Tyre completed its initial public offering (IPO) on the Shanghai Stock Exchange. Back then Triangle’s top management promised that the company would invest in expanding its position in key markets – including Europe. Sure enough, in 2017 a new European leadership team was appointment and shortly afterwards a new European headquarters was opened in Milan. But around the same time, European anti-Chinese truck tyre import duties were also introduced. For many companies this meant the end of Chinese truck tyre business in tariff areas. So how has Triangle faired in this adverse business climate? Nearly two years after their appointment, Tyres & Accessories caught up with Triangle executives Corrado Moglia, general manager – Europe; Angelo Giannangeli, European marketing director; and Mirco Spiniella, business development director Europe in order to answer that question.
The short answer is that business is going remarkably well. No-one can deny that making money in the European truck tyre business with products produced in China is very challenging, but the first point the Triangle managers made was that the company has a far broader portfolio than truck tyres alone. Indeed, the company has been importing OTR tyres as long as anything else and has been experiencing strong sales of its passenger car products in recent years and especially this year. And it is this breadth of offer that has enabled the company to both sustain its unsurprisingly affected truck tyre business as well as develop its overall position in Europe.
The OTR tyre segment provides one example of how growth is possible in such and adverse business environment. Triangle makes a strong case for its brand being described as fourth or fifth in the market in the earthmover/OTR tyre segment. Firstly, the wider Triangle business has emerged from a particular niche strength in the OTR sector. What began with the supply of quality OTR tyres to the Chinese military has now grown into a respected internationally traded specialist brand. The fact that Triangle tyres are OE on Caterpillar machinery, while the brand also has relationships Terex and Volvo speaks volumes.
The volume of Triangle OTR sales also helps to make the case that the manufacturer is fourth or fifth in the world in this specialist sector. Because the company’s quality has been proved to be higher than other Chinese competitors, while prices are competitive with premium brands, very significant numbers of Triangle OTR tyres have been sold in Europe as replacements for other non-Triangle OE fitments. The result is that Triangle now holds an estimated 14 per cent market share in the European OTR tyre segment – far above any other Chinese player and knocking on the door of the world’s biggest tyre makers.
Overall, Triangle Europe experienced a 37 per cent sales increase in its full-year 2017 numbers, so moving forward it is about driving steadily and filling in any possible gaps in the firm’s offer. One point that the company is already addressing is in the port tyre sub-segment. Having launched a port tyre in 2018, Triangle is now working on broadening its range in this area.
Completely renewed car tyre range, aiming for performance sector
Triangle renewed its car tyre range in 2015 and revamped it again in 2017. However, the car tyre range – such as it was – arguably wasn’t marketed as thoroughly as it might have been. This is why the company launched the highest performance car tyres in its range during the last quarter and also ramped up marketing efforts with a product-introduction event in at the Portimao circuit in Portugal in June (see separate article for complete details of this).
Other marketing efforts are designed to reward the loyalty of dealers and partners that have supported the brand thus with additional product and marketing communications support. The strategy is evidently working as Triangle’s car tyre sales volumes that amounted to around 400,000 tyres a year in 2016 are expected to more than triple to around 1.3 million tyres a year by the end of 2019.
The next products on the passenger car horizon are Triangle’s seasonally-orientated products. The firm recently introduced an all-season option into its line-up. In addition, what company representatives are calling a mass market winter product is scheduled for 2020 launch, followed by a stud-able winter tyre in order to help Triangle reach the Nordic markets.
But it’s not just about volumes. There have also been concerted efforts to raise the bar in terms of quality. Market by market and country by country sales support has been a key part of this serving the interest of both distributors and the R&D term as market feedback influence the future and ongoing development of Triangle’s car tyres.
As a result, by the end of 2020, Triangle representatives expect to have completely renewed, refreshed and remarketed European-specific car tyre range.
Truck tyre range had to sacrifice profitability
It was more than a little fortuitous that Triangle’s OTR and car tyre divisions have had such a good time during the last couple of years. Triangle executives are open about the fact that – in the absence of a non-Chinese Triangle tyre production base – the company had to “sacrifice profitability” in order to maintain its place in the market.
To put this in perspective, by the end of 2019 Triangle’s truck tyre sales volumes should return to around 50 per cent of what they were in the pre-dumping days. However, production at Triangle’s North Carolina, USA factory (which will produce both car tyres and truck tyres) is said to be ramping up. When plans for Triangle’s North Carolina factory were announced the company said it planned to make 1 million truck tyres and 5 million car tyres a year at the factory. However, in light of the clear need for non-Chinese produced Triangle truck tyres around the world, senior managers as said to be “rethinking the ratios” in the USA. And what’s more, in addition to the North Carolina facility, Tyres & Accessories understands that Triangle is considering investing in another production base in a “non-tariff” market, although no firm decision about when and where has yet been made.
All things considered, Triangle Europe has weathered the tariff-derived storm remarkably well, with strong growth in OTR and the rapid re-development of its car tyre range supporting the rest of the business while production in the USA and perhaps another non-tariff market is organised.