HANKOOK Tire, the first tire manufacturer in Korea, has been maintaining its title as the nation’s No. 1 tire manufacturer since it was founded in 1941. Even today, the company sells the most tires for automobiles in Korea. In the midst of the global economic crisis, with the U.S. automotive industry hit hard, all related industries are getting hit by the crisis, generating various negative side effects. Many companies across the world have reported losses and closed manufacturing plants. However, Hankook Tire is one of the few companies reported to have generated a positive outcome in contrast to other suffering tire companies around the world.
Hankook Tire is certainly leading the industry as one of the fastest growing tire makers in the world. Hankook Tire takes up a quarter of the Chinese market and is quickly expanding its market share in Europe as well, pushing out an additional five million tires at its Hungary Plant thanks to an additional EUR 230 million investment.
Hankook Tire’s outstanding performance in the global market, marking 19.1% in global operating profits, proves the high-quality of its products and services. During the second quarter, sales increased 13.1% YoY and 10.8% QoQ, with operating profits increasing 83.2% YoY and 310.2% QoQ. The company’s Chinese and Hungarian operations saw the most significant increases in QoQ and YoY sales and operating profits.
Hankook Tire has strategic future plans for growth called ‘5-1-1 Strategy’, meaning it will strive to be the world’s 5th ranking global tire manufacturer, will bring $1 billion EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) and will manufacture 100 million tires per year by 2014. To bring this strategic goal to reality, Hankook Tire is committed to making ongoing investments of 5% of its revenue in R & D and constructed capacity expansion plans for sales increase. The plans include factory expansion to increase production capacity at its Korean Keumsan plant and Hungary Plant. The Korean Keumsan plant expansion is expected to be completed in 2010 with a top production capacity of 460 million annually while expansion of the Hungary plant is expected to create a production capacity of 10 million annually.
Hankook Tire has adopted and implemented very aggressive marketing activities, secured distribution channels through localization and contacted end users consistently.
Hankook ensures competitiveness in the fierce market by supplying all types of tires for a wide range of automobiles as well as providing premium OE (Original Equipment) products for both compact and luxury segments.
Hankook has been increasing its market share in Europe since 2004 and currently holds a 5.8% share, ranking 6th. As a marketing tool to strengthen brand awareness among European nations, the company participated in motor show events such as IAA and Essen Motor Show and sponsored high profile motor sports including the LeMans series, LeMans 24 hours, Nurburgring 24 hours, VLN and IRC. The company was also able to increase its brand awareness by supplying quality tires to premium automakers such as Audi and Volkswagen for OE production.
China is considered Hankook Tire’s home outside Korea, with double digit growth in sales since 2005. Hankook certainly has an advantage in China as it was the first overseas tire manufacturer to enter into China. The company has also been practicing aggressive marketing activities, including selecting Chinese diving star Guo Jing Jin as a spokesperson.
Hankook Tire has been consistently investing 5% of its revenue in R & D, boosting competitiveness and its reputation as a maker of high-performance tires. About 6% of Hankook Tire’s employees, more employees than from its corporate division, are dedicated to R & D. As a result, Hankook has become an increasingly important supplier of customized, quality solutions to the world’s leading automakers, such as Chrysler, Gm, Ford, Audi, Fiat, Renault, Volkswagon, Volvo, Hyundai, Kia, Mazda and Mitsubishi.