Hankook: More market share!
In photo: Shawn Denlein, left, senior vice president of sales, and Byeong Jin Lee, president, say the new Ventus S1 noble2 ultra-high performance all-season tire is the major product launch for Hankook Tire America Corp. this year.
"In the long-term, we want to have 12% to 15% market share in North America.” That was the key point Hyun Bum Cho, chief marketing officer of Hankook Tire Co. Ltd., delivered to Hankook Tire America Corp. dealers who gathered in Cancun, Mexico, last month for the company’s annual dealer meeting.
Cho’s candid presentation set a positive tone for the dealer meeting. Cho said he currently believes Hankook has about 5% share of market in the United States.
His company has been adding capacity at a rate of 5% to 6% per annum, which he believes is well above the industry average. Cho also said the company is 80% certain it will build a plant soon in the U.S, and it is talking with various state governments in this regard.
Cho pointed out that Hankook views original equipment tire placements as very crucial to growth and to building Hankook’s brand. He told dealers that OE fitments are a better investment than running a $250 million consumer advertising campaign for brand development.
New OE fitments are in the works, with the company interested in “German premium car fitments to increase our shares. We want to be a global brand and want drivers to use our tires. We do not want to be a niche (Ferrari) tire maker.”
Cho ended his remarks with a bold statement of intended growth: “We will become a global brand, and I might sound cocky, but I truly believe this.”
The Hankook meeting, which was attended by roughly 200 people from 65 dealerships in the U.S. and another 11 dealerships from Canada, took place shortly after the parent company had posted corporate sales of $6.4 billion for 2012, a 13.7% increase over 2011. Overall, the company had operating income of $836.8 million, up 65.7% from 2011.
Goals for 2013
Shawn Denlein, Hankook Tire America’s senior vice president of sales, was also upbeat in his comments to dealers. He said the company just had a 20% sales increase to $1.2 billion in 2012; the company also increased its market share.
Denlein said the company has set the following goals for 2013:
1. deciding on the U.S. plant;
2. enhancing the company’s “One” dealer program — although no details are being revealed at this time;
3. increasing Hankook’s share of market to 5.4%; and
4. increasing sales to $1.4 billion.
The company is investing heavily in the launch of its Ventus S1 noble2 ultra-high performance all-season tire. The tire debuted at the 2012 SEMA (Specialty Equipment Market Association) Show, but it wouldn’t become available to dealers until March 2013. The tire is W-rated, and will be available in 40 16- through 20-inch, 30- to 55-series sizes. The line has a UTQG rating of 500/AA/A.
Hankook is also looking to increase its presence in the winter tire market. It is launching a Winter i*cept iZ T-rated tire in 14- to 18-inch rim diameters. The studless tire will come in 24 sizes.
The company also announced a second winter tire, the Winter i*Pike RS performance tire. It is T-rated and will come in 13- to 18-inch rim diameters with widths of 45- to 75-series. This studdable tire will come in 37 sizes.
Denlein echoed Cho’s comments about OE fitments. He pointed out a strong partnership with Ford and Lincoln brands in the U.S., along with Hyundai, Kia, VW, Chevrolet, GMC and Chrysler vehicles.
In a private meeting with MTD, Denlein said OE fitments currently represent about 35% of Hankook’s total business in the U.S. The intent of the company is to keep the ratio at this level.
Hankook is continuing to expand its “behind the plate” signage program with major league baseball teams. Denlein announced that Hankook will be at 28 different ballparks, with the new additions for 2013 being the Boston Red Sox and the Chicago White Sox. Continuing with sports marketing, Hankook is sponsoring “Fox College Football” and “NFL on Fox” on television to deliver its consumer message.
Denlein said the further addition of court-side signage at NCAA basketball events will help the company target younger consumers.
Hankook is still working out the details for distribution of its new value-driven brand, Kingstar, which gives the company three brands (Hankook and Aurora are the other two). Current Hankook dealers can purchase Kingstar from the warehouse, but the company is evaluating the distribution of it to see who will be best to carry the brand.
Commercial Tire Group
Turning to the truck tire side of the business, Brian Sheehey, director of sales and marketing for Hankook’s Commercial Tire Group, discussed new OE fitments at Freightliner Trucks (a division of Daimler Trucks North America LLC), Navistar Inc. and Blue Bird Corp. Even as the company grows its OE fitment business, Sheehey was quick to state that “we are not going to ship tires from replacement to OEM.”
Sheehey said the company has three goals for the commercial business in 2013. The first is to increase personnel by 50% in sales, thus allowing the company to develop closer relationships with customers.
Secondly, the company wants to increase its growth through its dealers, and lastly, it wants to have a 30-day back order fulfillment.
The company announced several new truck tires. The DL12 is a multi-application drive tire due out late this year. The AH15 and AM15 tires feature rib and all-position designs, respectively. The other two are size 445/50R22.5 wide-base tires: the DL07 and TL07. ■