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Sumitomo Rubber Industries Ltd. Plans to Increase its Production Capacity in United States

United States: Sumitomo Rubber Industries Ltd. is targeting twofold increase in its manufacturing capacity for passenger cars and light trucks by end of the year 2019. The company is eyeing to manufacture 10,000 tires per day at its Tonawanda factory in New York.

The company has allocated a budget of USD87 million for its expansion at its New York plant. Sumitomo Rubber Industries Ltd., originally a Japanese company is represented as Sumitomo Rubber North America LLC in United States. Sumitomo sells its tire products under Falken and Ohtsu brand names in North America.

It believes that production capacity expansion will enhance its ability to manufacture tires for SUV’s which are exhibiting constant demand in North America. This expansion plan will also help the company to reduce lead time and supply high performance tires to all its buyers across North America. The company also plans to transfer some of its tire production to its plant located in the city of Amati, Thailand.

According to a recent report published by TechSci Research,United States Tyre Market Forecast & Opportunities, 2020”, United States automobile market is the second largest automobile market in the world, with a motorization rate (including passenger cars and commercial vehicles) of more than 790 vehicles per 1,000 individuals, in 2014. Increasing disposable income due to strengthening US Dollar, falling oil and food prices, and rising standard of living, are resulting in an increase in production and sales of vehicles in the US. Steady growth in sales and production of automobiles, expanding automobile fleet, and favourable government policies, are anticipated to propel growth in the US tire market over the next five years. Passenger car tire segment accounted for the largest volume share of more than 80%, in the market in 2014, followed by light commercial vehicle, medium & heavy commercial vehicle, OTR and two-wheeler tire segments. Major tire players operating their tire manufacturing facilities in the US include Bridgestone, Goodyear, Continental, Pirelli, Michelin and Yokohama.

TechSci Research believes that, by increasing production of passenger cars and light truck tires at Tonawanda plant, the company would be able to increase its share in United States tire market by meeting the demand of SUV tires and reducing sales lead time.

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