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Hankook pushes for OE

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Hankook pushes for OE

Hankook Tire Co. Ltd. has been very aggressive in securing original equipment fitments in recent years, and held a major press conference Sept. 2, 2013, in Seoul, South Korea, to announce its latest fitments.

Earlier this year, Hankook’s President and Chief Marketing Officer Hyum Bum Cho told North American dealers his company views OE fitments as crucial to the company’s growth and brand building. He said OE fitments are a better investment than running a $250 million consumer advertising campaign for brand development (see March 2013 MTD, page 64). Now, the company has released more information about its OE fitments.

The company said it has been chosen by Daimler AG as an OE supplier for the new 2014 Mercedes-Benz S-Class. The new luxury sedan will initially be fitted with Hankook Ventus Prime2 tires in size 245/55R17 102 W. The tires are not run-flat tires, and the company did not know if any of these cars would be available for sale in the United States market.

“The Mercedes-Benz S-Class is recognized as one of the finest luxury cars in the world,” said Seung Hwa Suh, Hankook’s vice chairman and CEO. “We are delighted that the Hankook Tire Ventus Prime2 we have developed for Daimler AG meets all aspects of our customer’s exacting requirements for their new Mercedes-Benz S-Class.”

The tires for the Mercedes-Benz S-Class are currently being produced at Hankook’s main factory for ultra-high performance tires in Geumsan, South Korea. The fitment began in June, according to Hankook.

In addition to the Mercedes-Benz S-Class announcement, the company said its UHP Ventus S1 evo2 in size 225/50R17W has also been selected for the company’s E-Class. The supply agreement begins this month.

Hankook also announced that it has been chosen as a supplier to BMW’s new 5-series with the Ventus S1 evo2 in size 225/55R17W.

This will be the fourth BMW model that Hankook supplies with tires. The tires will be on the 520i, 528i, 530i, 535i and 520d. As with the Mercedes fitments, the company did not know if any of these cars would be available for sale in the U.S. The tires are not run-flats.

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Suh said the company “wants to provide high-quality tires but also enhance our reputation with consumers” with the addition of the upscale German car maker fitments.

Cho put it this way: “We have achieved our own grand slam by now supplying all three German automakers (Audi, BMW and Mercedes).”

Cho said the recent announcements now place Hankook among the top tier tire companies in the world.

The company also said its Optimo H426 was selected by Toyota for its 2014 Corolla in size 195/65R15S; the same tire was selected for the Nissan 2014 Altima in size P215/60R16T. Both of these cars are being sold in North America.

Hankook has been active in the OE business during 2013. Earlier this year, the company landed a contract for the Honda Civic with its Optimo H426 tire in size P205/55R16H.

Hankook started its OE push in 1999. Despite the relatively short history compared to other competitors, OE sales have been continuously growing throughout the years, said Hankook.

Hankook has now established business partnerships with all of the global top-eight automakers.

Since 2009, Hankook has gradually built partnerships with various global automakers, including premium automakers BMW, Audi, Lincoln, Daimler Trucks North America (DTNA) and Chrysler.

In recent years, the company has expanded its OE fitment portfolio into German premium car makers Mercedes-Benz and BMW and Japanese automakers Toyota, Nissan and Honda.

Hankook has seen a sharp increase in OE sales since 2009, with OE sales reaching 37% of total (unit) sales in 2012. These OE shipments totaled $1.8 billion, which amounted to about 28% of the company’s total annual revenue.

Also, compared to the year before, OE supply contracts to global premium automakers jumped by 27.6%, led by factory-installation of ultra-high performance tires.

Hankook believes its OE business highlights its technology and quality. The company said, “Premium OE supply expansion is a part of our core mid- to long-term strategic objectives.

Having said that, we will continue our endeavor to further raise Hankook Tire’s brand equity as a top-tier company through extending our premium OE portfolio, and we will continually boost market share worldwide by raising product quality.”

About 58% of the OE tires manufactured from the company’s Geumsan plant are supplied to domestic automakers in Korea, while the rest (approximately 42%) are headed to overseas markets such as North America, Europe, Mexico and Japan.

In 2012, Hankook produced about 30% of total global OE tires at the Geumsan plant, which is equivalent to roughly 11% of total tires produced by Hankook’s global production network.

In addition, the OE tires manufactured at the Geumsan plant make up about 42% of its aggregate annual production capacity.    ■

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Hankook invests $240 million in new test facility

Hankook Tire Co. Ltd. is investing $240 million through 2020 to build a new proving ground and tire R&D facility in Sangju City, South Korea.

The company says the facility will have the largest proving ground in Korea, incorporating state-of-the-art test equipment. It will enable tire tests with ultra-high performance tire products, simulating extreme driving conditions. Tests on truck and bus tires also can be conducted at the new complex.

Upon its completion, the Hankook Tire Test Engineering Center will become the company’s key R&D facility that allows its engineers to design, produce, test and analyze tires as a one-package process in one location.

Hankook debuts airless concept tire

Airless concept tires continue to attract attention by tire manufacturers. This time, it’s Hankook Tire Co. Ltd. that showcased its iFlex non-pneumatic eco-friendly tire at the Frankfurt Auto Show in Germany in early September.

The iFlex uses organically connected spokes that distribute pressure so that the bottom of the tire is compressed while the top stretches. The company says this leads to a comfortable and smooth ride.

The up to 95% recyclable tire, made from highly elasticated polyurethane synthetics, is manufactured in conjunction with its rim. The company says the tire consumes less energy while rolling and it does not require air. This in turn results in lowering fuel consumption while simultaneously increasing vehicle safety.

There also is a wide selection of colors that can be applied to the center frame, outer layer and inner structure.

Company holds grand opening for 7th tire plant

Hankook Tire Co. Ltd. celebrated the grand opening of its seventh global tire plant in Indonesia last month.

The plant is located in Lippo Cikarang, Bekasi, West Java, and will act as an export base for the North America and Middle East markets as well as a regional business hub for the emerging Asian market, reaching the production capacity of 6 million tires per year.

Approximately 30% will be allocated to cater to the Indonesian domestic market, while the remaining 70% will be exported to serve the demands in emerging markets across the globe including the ASEAN region, North America and the Middle East.

Covering an area of 148 acres, Hankook Tire’s Indonesia plant is a modern manufacturing facility equipped to produce mainly passenger car tires, ultra-high performance tires and light truck tires.

At the grand opening, Seung Hwa Suh, vice chairman and CEO of Hankook Tire, said, “Today’s commemoration of the Indonesia plant opening marks yet another milestone in Hankook Tire’s ongoing growth as a global top-tier tire company. This is also a clear manifestation of our strong will and commitment for further growth together with Indonesia and other emerging economies. As a leading global tire company, we will continue our relentless efforts to supply customers around the world with more advanced, globally acclaimed tires via our new export base in Indonesia.”

With a groundbreaking ceremony held in June 2011, Hankook Tire commenced the construction of its seventh global manufacturing plant in Indonesia. The company currently employs approximately 1,400 staff members and will increase to a total of 4,300 employees by 2018.

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