FULLERTON, CA – Yokohama says it is pulling all the stops to battle a fill-rate problem that developed when the U.S. economy started to improve last year.

Takao Oishi, president and CEO of Yokohama Tire Corporation (YTC), said a major slowdown in production in 2009 led to a “problematic fill-rate situation in the year that followed.”

In a company-controlled interview released to the media this month, Oishi said, “2009 was a rough year, but 2010 was a big improvement for us overall. We’re still struggling, though, with issues that are affecting everyone in the industry, such as the escalating costs of raw materials and fill-rate problems.”

He said Yokohama has always run lean and efficiently, traits that helped the company when the economy slowed down in late 2008. With tightened budgets, hard work, and strong corporate communication, Yokohama managed to launch new products, including the AVID ENVigor consumer tire and the101ZL commercial truck tire.

“In some ways we did much better than expected (with them), so, unfortunately, we now have a fill rate issue,” he said. “We are pushing our parent company and our Salem (Virginia) plant to increase production as much as possible and as quickly as possible.”

The company has invested $13 million to expand production at the Salem plant, and is investing in plants in Thailand and the Philippines to increase production and help bolster supply in the United States.

Oishi said he is closely watching currency trends as a potential roadblock to North American success.

“As you know, this fluctuates constantly, and with the continued weakening of the U.S. dollar, the conversion against the Japanese yen has been on a downward trend in general,” he said. “This offsets profitability that we post. It also makes it difficult for us to calculate on a consolidated basis our performance with that of our parent company.”

While freight volumes are a positive harbinger for the tire industry, it is tempered by a forecast decrease in the U.S. GDP.

“2011 will be slightly stronger than 2010 but all tire manufacturers – including Yokohama and its competitors – will face the same problem on supply, as well as the rising costs of raw materials,” he said.

“The rising cost of materials is a major challenge because you can’t prevent it. This makes it tough on everyone, especially the tire makers.”