Triangle Holds Annual Global Summit

The theme of globalization loomed large over Chinese tire manufacturer Triangle’s latest Global Business Summit, held at Shanghai’s Shangri-La Hotel. 

While the chairman of the board Ding Yuhua’s conference-starting speech riffed on the theme with regard to manufacturing processes, employee base and international trends, the presence of delegates from around the world reinforced the world’s 16th largest tire manufacturer’s message.

In the coming year, Ding said that Triangle is seeking to “speed up the transformation and upgrade [its] manufacturing to synchronize with the global economy,” while focusing on the environmental standards Triangle now characterizes as part of the “mainstream” in the post-REACH, post-labeling landscape – in China as well as the rest of the world. This involves greater investment in green production technology that he says is yielding a “4% increase in energy efficiency yearly.”

Yet environmentalism – the key theme in the 2012 Beijing summit – took a back seat to globalization this year, as Ding concluded his introductory remarks by mentioning Triangle’s intentions to “build an international talent pool, developing global strategy and cooperation and using regional resources.” This too was the subject of the assistant mayor of Weihai Municipality Chen Ning’s welcome address, which opined that in a global “economic slowdown… upstream-downstream communication” assumes greater importance, stressing the importance of promoting “global cooperation” and “international partnerships.”

The key example of this from the conference – and certainly the most important news to come out of the meeting this year from a U.K. tire business point of view – was the announcement of Triangle’s purchase of a 10% share in its U.K. distributor, Norfolk’s TYM International, as well as similar investments in Australia (Consolidated Tyre Co.) and Russia (SP-Tyre) in the first phase of the manufacturer’s “capital strategic collaboration project.”

This is one of the ways in which Triangle is demonstrating practical ways of implementing its globalization approach, as recommended by the conference’s first major guest speaker, economist Zhang Guoqing of the Policy Research Office at China’s Ministry of Commerce, who spoke in general terms about the opportunities and challenges facing Chinese companies attempting to globalize their operations. With a background of rising domestic demand for globally produced products, Zhang Guoqing reported that “43% of Chinese companies will pursue global growth strategies – more than in other Asian countries.”

However, he continued that reports were suggesting that some Chinese companies are not performing very well, with the result that Chinese enterprise globalization is reaching “only a medium level.” 

The economist suggested a number of reasons for this, which mainly fell into two categories: first, he suggested that Chinese companies face a “culture clash” problem, including both the “legal and social frameworks” of other countries. Second, he talked about the “mismatch of Chinese quality or strength and companies’ large size” – in other words, too much growth “without reference to the quality of their technology.” 

To tackle the latter challenge, he advocates shifting the primary focus to quality in order to “change the economic model from low to middle level.” One of the effects of upgrading the Chinese model should, he theorized, be “to use global resources better” and ultimately “create Chinese multinational companies.” 

On the former, Zhang believes that the “biggest threat to Chinese companies is the inability to understand and adapt” to other cultures. With this in mind, he suggested that it was the “responsibility of Chinese companies to act with sales representatives in local markets,” which neatly coalesces with the idea of using global resources more effectively. Such a move is not a new idea for Chinese tire manufacturers, and Triangle’s action in buying shares in regional distributors in the U.K. – to go alongside its own sales office in Ireland – Australia and Russia certainly increases the brand’s involvement with its downstream distributors around the world.

Reacting to Triangle’s investment in TYM International, general manager Steve Eke expressed his satisfaction that he was pleased to have converted “the customer-supplier relationship into a partner relationship” with Triangle. Brian Tampaline, member of the sales team at the Consolidated Tyre Co., characterised the building of his own company’s relationship with Triangle in a similar way, when he spoke from the platform at the global business summit, mentioning the close working relationship distributor has built with manufacturer. 

“Consolidated Tyre Co. has been distributing Triangle brand tires in Australia for more than a decade. Triangle is a core product in our company and we dedicate ourselves to the expansion and promotion of Triangle tires in Australia.” 

The company partners with regional tire wholesalers in each state of Australia, and “actively supports them to gain market share. Most of our original distributors are still with us and several of them are here today. During the initial years, we recognized that we needed to distinguish the brand from its competitors, so we began to focus on Triangle as a product that can compete with established tire market leaders in quality, performance, value and reliability. We attended trade shows and advertised in industry journals, always with an emphasis on the Triangle brand name. 

“This approach met accord with the market and enabled us more effectively to promote the brand, including significant penetration into the TBR and OE market. Triangle quickly became one of the best-known brands on the Australian tire market. The successful market penetration against established global brands in all market segments.

“Although our sales continue to grow, we recognize fierce counter-attacking from the established brands, suggesting that we need to move to another level to further expand our market share. In particular the passenger car tire market in Australia is very competitive. The top three global brands occupy more than half the market share through their comprehensive retail networks. Other brands such as Hankook, Toyo, Maxxis and Kumho successfully secured their market shares through local retail franchises. Therefore our next target is to build Triangle retail and service networks to support the brand. 

“We work closely with Triangle market research. With the latest data published by the Australian Bureau of Statistics analyzing vehicle registration and new car sales data; attending domestic and international trade shows; and reacting to product feedback from our customers. The market research is important to us to understand our competitors, and to provide data such as new fitment sizes to the factories.” The Consolidated Tyre Co. also exhibits