Seoul – Hankook Tire Co. Ltd has set its sight on further growth as part of its strategy to become a “top tier” tire manufacturer by 2020.
Hankook to start US tire plant in April, expects expansion
Currently ranked seventh in the world, Hankook announced, at a press event 18-19 Oct, its ambitions to be one of the top five global tire manufacturers.
The Clarksvilleو Tennessee, production plant in the US will be a major contributor to the growth, according to Hankook global marketing vice president Seung Bin Lim.
Currently at a trial stage, the phase 1 of the project is set to start full production by April 2017, slightly later than previously announced.
At this stage, the facility will produce roughly 5.5 million tires a year, which will mainly supply to the Mercedes and BMW manufacturing sites in nearby states.
“We are currently supplying those plants from Europe,” explained Felix Kinzer head of corporate communications, Hankook Europe.
Once on-stream, the US plant will free up capacity within Europe while providing further opportunity for growth within the Americas market.
Hankook projects that the Tennessee facility will be expanded into phases two and three in the future to meet the demands of the market.
The Seoul-based tire manufacturer expects production capacity to reach 135 million units by 2020, from 103 million units presently.
To that end, it is considering five locations for a new plant, potentially Mexico, Brazil, Middle East, East Europe and Russia.
The prime candidate, according to Kinzer, is most possibly the current production cite in Hungary which has room for further expansion.
If that is the case, the added capacity will be mostly focused on the TBR and LTR tire segment, he added.
The two segments currently hold a small 5% of Hankook’s production each, a figure Hankook is keen on increasing.
“Another current that we are now observing is a change by automakers to eco-friendly cars like hybrid or electrical vehicles,” said Bryan Woo, senior vice-president and head of global OE division.
With the change of the landscape, he said, Hankook also has to change plans too.
The company is now developing and producing tires for this segment, which requires further development of new materials and technologies.
Another key market Hankook is aiming to see improvement in, is the SUV market which has had a steady growth globally.
“The SUV market is now growing explosively, particularly in the Chinese market and the European market…. We are now working on partnerships with SUV-makers, such as Porsche Macan and BMW X5 and X6,” he added.
The Korean tire-maker has been investing in marketing of its tires as a premium brand, focusing on football in Europe and baseball in the US and Asia.
The marketing budget of the tire maker has grown from 3.5% of revenue in 2015 to 4.0% in 2016 and the figure is projected to increase to 4.4% next year.
This is a corrected version of a story run yesterday which contained a number of errors. We apologise for any confusion caused.