Key distributors and dealers of Hankook-branded tires were on hand at the company’s annual Partner’s Day Meeting in Los Cabos, Mexico, to hear about the company’s progress toward its self-imposed goal of being the industry’s fifth largest tire company by 2020.
Shawn Denlein, senior vice president of sales for Hankook Tire America Corp. said Hankook’s parent company had total sales (converted to USD) in 2016 of $5.708 billion, up from $5.681 billion in 2015 but not at the 2014 level of $6.018 billion. Operating revenue stood at $950 million for 2016, up from $782 million in 2015 and $929 million in 2014.
This revenue still places Hankook as the seventh largest tire company. However, according to Modern Tire Dealer’s 2017 January Facts Issue, Hankook is gaining ground on Sumitomo Rubber Industries for the sixth position, currency exchange rates notwithstanding.
Denlein told dealers that U.S. and Canadian market growth will be key for Hankook to move into fifth place. The Americas in 2016 accounted for 22.6% of Hankook’s worldwide sales, second only to Europe at 30.4%. China stood at 19.2% and Korea at 17.4%; the Mid-East, Africa and Asia-Pacific region had the remaining 10.4%.
Denlein said being a first tier brand is also part of the company’s 2020 goals, and the company is using an original equipment presence to move itself forward. Worldwide, 35% of its sales came from OE fitments on some 250 models with 27 different car makers. The company told MTD that in the U.S., it currently has placements on 30 car models with 11 different manufacturers.
At the moment, Hankook has production capacity of 103 million units per year, a number that Denlein says makes it the fifth largest in production. The company wants to be capable of producing 130 million units by 2020.
The company’s Clarksville, Tenn., plant should be ready for production of passenger tires in April. Hankook hopes to have a 1.7 million capacity by year's end and be at a level of 5.3 to 5.4 million in 2018, with the capability of producing 245 SKUs by April of 2018. This is the first stage of the plant’s start-up.
Denlein pointed out that all of the first stage production is slated for the replacement market. When the second stage of production begins, OE production will start.
Denlein said Hankook will be launching a new premium touring all-season tire, the Kinergy PT H737, in the third quarter of 2017. This will be the first product launch of a new tire from the Tennessee factory. It will be available in 14- to 17-inch, 55- to 75-series sizes. The 30 SKUs will be T-, H- or V-rated.
The tire will replace the company’s current H727 tire.
In the first half of 2018, Hankook will launch a new H735 passenger tire line that will replace its H724 (which debuted in 2009) and its H725 touring all-season tire.
The company will be continuing its MLB marketing programs as well as adding nine NBA teams with sponsorship arrangements. Denlein said the company is planning to increase its marketing budget by 40%.