Powering Through Collaborative Synergy – Oct 2023 – 2

Sumitomo Rubber and Stamford Tyres: A Time-Tested Partnership

In the world of business where alliances are often formed and dissolved with the changing tide of the industry, a few enduring partnerships stand as shining examples of resilience, trust and shared success. The partnership between Sumitomo Rubber and Stamford Tyres is one of them.  

“Sumitomo Rubber’s partnership with Stamford Tyres began in 1975 when Wee Kok Wah, the founder of Stamford Tyre Group, knocked on Sumitomo Rubber’s door in the 1970s. What started as a modest collaboration involving Ohtsu tyres has since blossomed into a regional partnership, mainly encompassing markets in Southeast Asia. Stamford Tyres currently distributes the Falken brand of tyres in 23 countries,” said Sumitomo Rubber Asia (Tyre) Pte Ltd (SRAT) Managing Director Takehiko Asai. 

Throughout this remarkable partnership, he shared that the two companies not only embraced success but also weathered and triumphed over various challenges, including cyclical business fluctuations, the Asian Financial Crisis and Global Financial Crisis.

“In 2012, Sumitomo Rubber took a strategic stake in Stamford Tyres, demonstrating the company’s unwavering commitment to fostering a long-term partnership with this esteemed organisation. Today, Stamford Tyres remains an important partner in this region,” he added. 

Asai assumed the role of Managing Director at Singapore-based SRAT in January 2022. His involvement with the tyre industry began when he joined Sumitomo Rubber in 1998. For the first 15 years, he worked in the domestic sales department, where he was involved in sales and commercial tyre product planning. From 2014, he worked as a product planning manager at Sumitomo Rubber’s head office, where he worked hard to build a global product portfolio. His extensive experience and leadership in product planning and sales equipped him with the insight and skill necessary for further growth in the region.

He took the time to visit three of the local Falken dealers during his field trip to Malaysia, together with Sakie Takagi, Sales and Marketing Manager, Lee Kok Chiang, Assistant Manager, SRAT, Ivan Reijan, General Manager, and Ku Seng Yeow, Head of Sales Channel Development, Stamford Tyres Malaysia, to KM Road Master Sdn Bhd, Kerteh Kemaman, Terengganu, CS Kuantan Service Centre, Kuantan, Pahang, and Soon Jaya Tayar Sdn Bhd, Melaka. These dealers have more than 15 years long-standing cooperation with Stamford Tyres Malaysia. This effort is aimed at strengthening the bond with the dealers and enhancing their relationship.

Further growth potential in SUV and 4×4 segments 

When asked about the importance of the Malaysian market for Sumitomo Rubber, Asai highlighted the country’s essential role in the company’s regional strategy. “Malaysia is undeniably one of the top three new vehicle markets in Southeast Asia, boasting a substantial middle-class population. As of 2022, the nation registered approximately 23 million active vehicles, with a record of 720,000 motor vehicle sales in the same year, marking the highest total industry volume (TIV) ever recorded in the country. 

“Malaysia is an attractive market, characterised by robust demand per capita for automotive products, including tyres,” he added. 

A trend that he noted was an increasing preference for SUVs and 4×4 vehicles, indicating a promising avenue for further growth. This shift aligned exceptionally well with Sumitomo Rubber’s portfolio, particularly the Falken brand, as it opened a high-value tyre replacement market. 

“Falken SUV and 4×4 tyres are expertly designed to meet the needs of on-road and off-road driving. Sumitomo Rubber‘s development of the new Azenis FK520L was in response to the evolving demands of premium vehicle drivers who demand exceptional cornering performance, superior wet road handling and high mileage. It took the company about six years to develop this new product and the preparation process started in fact just after the launch of FK510 in Malaysia. The letter ‘L’ in the tyre’s name emphasised its longevity and prolonged tread life. The Azenis FK520L, with its European cousin Azenis FK520, marked the next evolutionary step following the acclaimed Azenis FK510, drawing inspiration from Falken’s triumphant European motor sports involvement. The FK510 received numerous accolades and top ratings from esteemed European tyre industry organisations, including ADAC (Allgemeiner Deutscher Automobil-Club/General German Automobile Club), one of Europe’s largest automobile federations. These achievements underscore the performance and quality standards set by Sumitomo Rubber’s flagship tyres.”

According to him, the FK520L offered a host of advantages over its predecessor, FK510, making it an exciting addition to Falken’s tyre lineup. One of the standout features of the FK520L is the adoption of the Sustainable Silica Dispersion Agent, an all-natural biomaterial developed through Falken’s motor sport expertise. This innovative material forms strong bonds with rubber (hydrophobic) and silica (hydrophilic), resulting in enhanced bonding between these components. This, he pointed out, led to extended tyre life without compromising performance on either wet or dry roads, offering drivers exceptional longevity and grip. 

“Just like its race-winning motor sport tyres, the FK520L is reinforced with Aramid, a high strength synthetic fibre, making it structurally stronger to provide greater stability and more precise steering behaviour. Featuring a new ‘Diamond Cut’ tread, developed by Falken using its advanced 4D nano-simulation technology in Japan, it enhanced the tyre’s ground contact, cornering and dry braking performance.”

Additionally, he said, the optimised road contact area of the tyre ensured even wear and improved road contact. The effectiveness of the design was also reflected in the outstanding performance of the tyre in wet and dry conditions. As the flagship of the range, Falken engineers made no compromise during the tyre’s development to achieve optimal surface traction and driving performance. With these characteristics, he shared, Falken targeted drivers of heavier performance cars and SUVs, offering a balance of high performance and comfort elements.

Towanowa – Sumitomo Circular Economy Model 

Sumitomo Rubber recognises and responds to the global trends that shape the future of the tyre industry. Asai noted that the two most prominent trends the company was addressing were the global efforts to achieve carbon neutrality in light of the expanding impact of climate change and transformation of social mobility with the rise of CASE (Connected, Autonomous, Shared, Electric) and Maas (Mobility as a Service).

Responding to these challenges, he said Sumitomo Rubber introduced ‘Driving Our Future Challenge 2050’, a long-term sustainability policy that set forth specific Challenge Target Themes to guide the company’s efforts by placing a strong emphasis on ESG (Environmental, Social and Governance). As part of the company’s commitment to the environment, it devised a comprehensive Circular Economy Business Model known as Towanowa. 

“Towanowa, Sumitomo Rubber’s Sustainable Value Ring, is designed with the objective of achieving the efficient movement and circulation of resources and goods within the tyre business. It features a dual-ring structure, comprising a ‘Sustainable Ring’ and ‘Data Ring’, connecting five key processes. The synergy between these two rings ensured the constant exchange of various data, supporting the company’s goals of reducing material waste and minimising CO2 emissions, and offering new value to our customers in safer and higher performance tyres as well as better solution and services.” 

For instance, he explained, the ‘Smart Tyre Concept’ leveraged Towanowa to advance proprietary technologies such as ‘Performance Sustaining Technology’ and ‘Active Tread Technology’. The former innovation addressed the common issue of the decline in tyre performance over time as result of wear and other factors while the latter was a specialised compound that optimised rubber performance on wet or icy roads and more to improve safety and performance.

At the same time, he said the company also harnessed the wealth of Big Data collected through its proprietary ‘Sensing Core Technology’. This data, he highlighted, empowered the company to continuously develop high-performance tyres and enhance the quality of services that the company provided.

“All these efforts ensure Sumitomo Rubber remains at the forefront of innovation in the tyre industry and at the same time, contribute to a more sustainable future. Sumitomo Rubber is committed to driving positive change and making a meaningful impact in response to these global trends.” 

Challenges and opportunities 

The company faced several challenges in the ever-evolving tyre market. However, Asai stressed that the company remained committed to addressing these challenges and had strategic plans in place for the future. 

“The presence of Chinese-branded tyres has intensified competition in the market, posing a challenge to the company’s Falken tyre brand. Sumitomo Rubber focuses on offering a high-performance/value proposition to Falken tyre enthusiasts. The company’s commitment to quality, safety and reliability sets it apart from Chinese branded tyres, delivering performance equal to or better than other premium brand competitors.” 

For years, he noted that consumers continued to believe that the ‘freshest tyre is the best’ over proper tyre storage. “Sumitomo Rubber recognises the importance of educating consumers about the significance of proper tyre storage. The company is actively working closely with distributors on inventory management and distributorship efficiency to minimise the impact of this challenge. It is equally important to help consumers make informed choices based on tyre storage conditions rather than just the year of manufacture.” 

The year 2023, he commented, could be considered the inaugural year for Malaysia’s adoption of electric vehicles (EV). Many electric vehicle manufacturers such as Tesla, BYD and other supply chains had announced plans to establish a presence in Malaysia. Furthermore, the Malaysian government continued to pave the way for electric cars through various schemes and incentives. Therefore, the rise of EVs was expected to accelerate and by 2030, it was expected to constitute 15 per cent of all new passenger car sales.

The increase of EVs in the country is expected to alter the tyre sales mix. As EVs have specific tyre requirements. Asai said Sumitomo Rubber was already prepared for the shift by launching a series of EV tyres in Europe and China. In response to the growing adoption of EVs in Malaysia, he revealed plans to introduce similar EV tyre solutions in the near future. 

“We would adapt to the changing market dynamics and cater to the evolving needs of the automotive industry, making sure that the company’s tyre offering remains relevant and aligned with emerging trends,” he concluded.