Atturo Tire Corp. is expanding into new product segments. Michael Mathis, Atturo’s president, explains why and discusses some of the company’s other initiatives.
MTD: How was the first half of 2024 for Atturo?
Mathis: From a high-level perspective, year-to-date, this is shaping up to be Atturo’s best year ever. We’re up more than 10% from our budget.
MTD: What do you attribute that to?
Mathis: A number of things. From a macro tire market perspective, the industry is still kind of recovering from the unevenness of the prior few years and is getting back to some semblance of normalcy. The vehicle make-up continues to trend in Atturo’s direction for our core LT/SUV product mix. Miles driven are up. Gas prices have kind of mitigated. And I think the consumer was spending ahead of inflation - or in spite of it. So there were things that were favorable for the industry and tier-three brands, in particular.
I think there’s been a pretty consistent trade down in tiers by the consumer, so that business is falling to brands like Atturo. We’re picking up the business of people who otherwise would have been a tier-two brand buyer.
MTD: Last summer, you told MTD that Atturo is broadening its product portfolio. How is that effort coming along, why is it important and how does it benefit Atturo’s dealers?
Mathis: The effort is well on its way. Our new all-weather performance tire, the AZ810, has arrived and is shipping. Deliveries have already begun in some regions. It’s a brand-new tread pattern for us that is an expansion of a performance tire segment that we’ve been in for a long time. It’s covering a whole new segment of the market for Atturo and it gives our distributors an Atturo product to sell into those categories. We're building the Atturo brand out to be a more complete product offering for our distributors.
MTD: Atturo continues to invest in a lot of consumer brand marketing, including a new partnership with the Chicago Cubs. What’s the underlying strategy behind these investments and in what ways are they bearing fruit?
Mathis: This has been a strategy of Atturo’s, really from the start. We certainly do our share of B-to-B marketing, but the vast majority of our marketing efforts are spent directly on reaching consumers. The goal is to increase brand awareness and improve the level of brand acceptance by the consumer, so when that retail dealer proposes Atturo to them, that’s not the first time they've heard about the brand. The program we're doing with the Cubs is one of many programs we have going for the year. We restarted our fourth round of national TV commercials and that's something that will be ongoing throughout the year. We, of course, have always done a large number of consumer events – in-person events – as well as doing other print and digital marketing. Adding the sports marketing – while that's a somewhat local and regional type of effort – bolsters the brand in a comprehensive way to make it an easier sell for that dealer and distributor.
MTD: Is Atturo making any investments in its manufacturing capabilities?
Mathis: Our main investment in that regard is in product development – both in tread pattern design and sizing. From a functional and aesthetic standpoint, I think some of the new tires we’re rolling out are some of the most refined and quite frankly, greatest-looking tires we’ve produced. We continue to improve the overall appearance of our tires, which is one area I think the industry doesn’t respect enough, as far as a want of the consumer. If you listen to what consumers look for when they’re anonymously searching online – not what they say to the guy at the tire shop – they care about how their tires look, not just how they perform. That's something I think needs to be more fully embraced, so we're certainly trying to do that. When you talk about manufacturing investment from a private brand standpoint, we're making sure we’re having our tires built at factories that are sharing our commitment to the quality and appearance of the product.
MTD: What’s Atturo’s current fill rate?
Mathis: Of the supply chain challenges of the last few years, I think we’ve largely overcome those to the point that at the end of the first quarter, our inventory was probably at the highest level domestically that it had been in the last three years. We’re expecting we should be able to build upon that and maintain some consistency there. And that’s really been our mantra – making sure we always have that tire ready.
MTD: Atturo has always been selective when it comes to signing distributors and dealers. What’s the strategy there?
Mathis: We certainly are selective in our distribution partners and the dealers that we work with directly, simply because we want to make sure we can provide the kind of service that they expect. We want to make sure we work with people who are able to educate their sales team and educate their associate dealers about the product, how to sell it and how to position it, as opposed to simply looking for commodity products to move in volume. We’re not so much focused on trying to be the volume leader with our distributors as much as we want them to look at Atturo as one of their margin leaders.
MTD: What can dealers expect to see from Atturo in the second half of the year?
Mathis: In the second half of the year, I think you will start to see the fruition of these new product developments. We have a new product launch that will be coming up soon and then continued expansions of sizes across our product range through the rest of the year. There are still additional market segments where I think there's tremendous opportunity for our brand to build upon the success we’ve had in some of our different categories, whether that’s the LT segment or the muscle car performance segment, where we’ve done so well, along with the powersports category, which is one we got into last year and has started to blossom for Atturo.
