Sameer Africa has begun distributing a cheaper brand of tyres in the market to tame onslaught by Asian rivals, increasing competition and signaling eminent drop in the product costs for motorists.
The strategy hinged on pricing is geared to defend its market share and protect its business from Asian that controls 50 percent market share, selling their products and half the price of the local manufacturer.
The first batch of imports from Chinese top tyre manufacturer, Summit arrived in the country, Thursday last week as part of a licensing agreement with Summit to make the tyres under its specification and supervision.
Sameer said the new brand has been customized to serve clientele under its economy segment.
“Products under this brand are priced competitively with Cheaper imports from Asia,” said Sameer Chief executive officer, Allan Walmsley.
The company will be reviewing performance of the new brand over a year’s time before it revives earlier plans to diversify its business to production of rubber products.
Its new product range was to include footwears like Gumboots, hoses, moulded rubber items, hose pipes and rubber sheets.
However, low return on investment of the rubber business is another factor the company is putting on hold its diversification plans.
“The cost of rubber is currently at its lowest. We are waiting over the next period to re-visit our plans,” said Walmsley.
The Nairobi Securities Exchange listed company is eying expansion beyond East Africa to include 11 more countries in the COMESA block.
“Its one of our major expansion drives in conjunction with a foreign equity firm,” the company intimated saying it is in the process of scouting for the partner.
Last year, Sameer lost exclusivity of selling Bridgestone brand after the latter found a new suitor to rival the local company- Sameers new partner is expected to control a huge stake to fit Bridgestone’s space.