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Vee Rubber increasing tire production capacity in Thailand due to proposed tariffs on Chinese tires

Published August 28, 2018
The company said its tire production capacity will be increased by 40 percent before the spring selling season.

BANGKOK, Thailand (BRAIN) — Vee Rubber Corporation, the parent of Vee Tire Company, is adding staff and expanding production in Thailand in response to demand from OEM and aftermarket customers in the U.S.

The company said its tire production capacity will be increased by 40 percent before the spring selling season.

The Trump administration has proposed a 25 percent tariff on a wide range of bike products from China, including bike tires. The U.S. Trade Representative is expected to decide next month whether to go ahead with the proposal. 

But Vee officials said they are already seeing increased demand from the U.S. industry. 

"We're taking swift steps to add capacity to our factories, which essentially means hiring and training additional staff," said Veerawat Sukanjanapong, brand director for Vee Tire Co. "Our tires are made by hand, which requires skilled, trained labor."

Jason Rico, the company's North American sales manager, added, "We're in a unique position to help brands and distributors that have been buying in China, and need a new supplier. We already own the machinery for this expansion, as well as our own rubber plantation."

Vee has five factories including a mold-making facility in Thailand, one factory in Vietnam, and one in India.

Most brands that have tires made in China are scrambling to prepare. Rico said the proposed tariff "is simply not a livable solution for American companies or consumers.” 

WTB, for example, has a long and close relationship with the Innova tire factory in China, which makes all of the brand's higher-end tire models. WTB's president, Patrick Seidler, told BRAIN last month that there is little time to switch factories before the tariff could take effect.

"If this happens, we will lose customers, lose margin and not make a profit. If we lose money, we have less to invest in the company and less money to employ more people here," Seidler told BRAIN. 

"In the short term, we are expediting shipments of tires into this country to get our fourth quarter inventory in place. That’s all we can do; we don’t know how long this will last, no one does."

Topics associated with this article: Tariffs

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