Kumho Tire (CEO: Kim Chang-kyu) is poised to strengthen its partnership with The Yokohama Rubber Co., Ltd.

On Sunday, Kumho said it has started negotiations on delivering OEM products to the Japanese tire maker. The two companies have already been co-developing next-generation tires after forging a strategic R&D alliance with each other in May last year.

“Negotiations are under way on issues including specifications, volume and start of shipment. We will consider gradually expanding shipment volume depending on orders secured by our plants in China and the demand for OEM products,” said a Kumho official, “We can start delivery as early as this year if we make rapid progress on the negotiations.”

The deal, if agreed on, would help Kumho raise the utilization rate of its plants in China. Amid concerns that this year might see global tire makers struggling to fill idle capacity in China with U.S. authorities expected to slap anti-dumping duties on tires made in China, Kumho could use the potential OEM deal to bolster its ties with Yokohama as well as to increase the utilization of its Chinese factories.

The South Korean tire manufacturer recently announced plans to relocate its Nanjing factories by 2016. Armed with state-of-the-art technology and equipment, the new environment-friendly factories are expected to produce high-end tires that meet the needs of the market. Kumho plans to use increased competitive edge of its products manufactured in China as part of its bid to respond proactively to the increasingly difficult market conditions.

The Yokohama Rubber Co., Ltd., based in Japan, started business in 1917 and is mainly engaged in tire manufacture. In 2014, the company posted consolidated revenues of JPY 625.3 billion with JPY 497.6 billion coming from tire sales. It has 14 tire factories in eight countries (excluding the ones under construction) with some 21,000 employees.