Sumitomo Rubber Industries will stop supplying original equipment (OE) tyres to Goodyear Tire & Rubber from its Buffalo plant in New York state from next year, according to reports in Japan.
Sumitomo said the Buffalo facility, which it acquired from Goodyear in 2015, will focus on its own Falken Tires brand – which mostly comprises high-margin tyres for SUVs and light trucks.
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Low fuel prices in recent years have helped increase lifted sales of SUVs and pickup trucks in the USA.
Other Sumitomo plants in the US will continue to supply OE tyres to Goodyear which are sold also under the Dunlop brand.
Sumitomo initially plans to increase production of Falken tyres for the North American aftermarket at its Buffalo plant but will also supply them to OE customers from 2019.
The company also said it plans to spend JPY10bn (US$91m) to replace ageing equipment at the plant and to double capacity to 10,000 tyres per day by 2019.
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By GlobalData
