Paolo Pompei, CEO of Nokian Tyres, discusses why the company’s “local-for-local” approach helps mitigate the sting of tariffs.

We’ve had an extremely good start and when I look at official, quarterly reports of the leading players of the industry ... we are very satisfied with the development of the business both in the U.S. and Canada and also our facility in Dayton, Tenn., has been performing very well now that we’ve finally completed our first stage expansion project. We’re achieving the daily output that we have targeted to achieve. So we are extremely satisfied with our performance.

The discussion about tariffs has created some uncertainty in the market, both in Canada, as well as the U.S. But we are managing this, considering our journey is set for growth. And we still have a lot of space for growth in North America.

People are very cautious in (making) decisions today and this is quite normal ... in a period of uncertainty. From our side, we’ve been quite prudent in taking decisions day by day. When we look at the statistics, the market is slightly down compared to the previous year, so no dramatic changes, but at the same time we can recognize people are looking at the market with a little bit of uncertainty – trying really to understand what will happen next. Particularly when we talk about dealers and distributors - if they will leverage more local producers, which I believe is a safe and correct decision, in any case, with or without tariffs - it’s always good to guarantee stability.

We are very proud of our business model itself because as you can understand, being local-for-local – meaning having facilities in Europe and facilities in North America – is giving us the possibility to tell our customers, ‘We're there. We’re close.’ So we’re really not concerned about any political discussion or any potential tariff that’s coming up in the market.

Not in particular, in the way that the majority of the products we sell in the U.S in  are made at our plant in Tennessee. The Canadian market is supported by winter tires from Europe, so this will not change. Again, I have to say we now have the flexibility to consider any strategic action.

Today, I would say more than 90% of what we sell in the U.S. is made in the U.S., so we’re not concerned about tariffs. Tariffs or not, we believe in a local-for-local business model. We believe that our customers can be safer working with us because we are close by (and) we have dedicated product ... for the market.

At the moment, we are basically leveraging the existing capacity we added at the end of 2024. The factory has been made to be three times bigger than what it is today, so we are there to grow and the factory has been built to expand -  to not really stay at the level where it is today.

: One hundred percent and this is a great asset for us, as well, because it’s giving us the possibility to actually improve our lead time to customers and the ability to produce more efficiently and deliver a higher output. The D/C is extremely convenient ... it’s well located in terms of logistics. We can reach almost anywhere in the country in 48 hours.

Pompei: The North American business is more than 20% of our global sales and this expansion that we just implemented is clearly indicating we want to grow more and grow faster. We are a player in sort of a niche business, in some ways. We’re targeting people who value safety in extreme conditions, in particular. Our advantage is winter tires, as you know very well, but we’ve used this experience to build a stronger portfolio in all-season and all-weather. We want to be a leader in highly profitable niches – highly profitable segments where we can make a difference and deliver value to our customers.

MTD: Speaking of products, Nokian continues to expand and refresh its lineup, most recently with the introduction of the Nokian Surpass AS01, which fills an important position in the company’s U.S. product screen. Can you elaborate on Nokian’s U.S. product strategy?

Pompei: Everything started many, many years ago with winter (tires) and then we realized that our expertise and know-how could be extended to all-season and all-weather to create a unique value proposition for our customers. The Surpass is an example in the UHP all-season segment. Our portfolio will expand in those three segments ... keeping winter tiers as a strong base in the northern part of the U.S. and Canada. You (also) will see more and more products that will have a higher content of sustainable, renewable and recyclable materials. Sustainability is an important item on our agenda. It’s really important for us as a company and (to) our shareholders.

MTD: Nokian continues to make progress building out its dealer base in the Sun Belt and other warm-weather areas. Why is this an important initiative?

Pompei: We try to be there whenever we can make a difference. We try to be wherever we can give our dealers a solution they can be proud of and a solution they can sell easily. When we hear a customer who’s extremely happy about our brand and our tires that they bought 10 years ago, 15 years ago and they still buy our products ... this is rewarding. For us, it’s really about not targeting the entire market, but making sure we're targeting consumers who value our brand and value performance and can remain loyal for the future.

MTD: What can we expect to see from Nokian during the rest of 2025?

Pompei: We’ve been in the North American market for many years, but we like to think we’re a young team and a young player. So obviously we have a lot of ideas – a lot of new products coming out (and) future potential expansion of our manfacturing facilities. I think you should expect to see a company that’s working a lot to consolidate and expand the brand in the market, reinforcing the value proposition of our products, and an agile team that’s really keen on (making) the Nokian brand available in the market and making sure we are expanding again in segments where we can make a difference.

We don’t want to be a generalist. We don’t want to be company that’s supporting everybody, everywhere. This is not our mission. We want to be a company that makes a difference wherever the customer is looking for safety - in particular, when weather conditions are extreme. We also want to educate our customers that Nokian is a sustainable solution.