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Under Kontrol

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Under Kontrol

At Hankook Tire America Corp., control — or more accurately, “Kontrol” — is the new buzzword. The tire manufacturer used last month’s Specialty Equipment Market Association Show as a vehicle to introduce its Kontrol Technology to the North American market.

Hankook’s new Ventus R-S3 Z222 tire is the first product for the North American market that contains the technology, which is based on four pillars: performance, safety, comfort and environment.

Kontrol already has been available in a newer Hankook tire, the enfren, in South Korea, as well as in China.

“The Hankook proprietary technology within Kontrol Technology isn’t new,” says Bill Bainbridge, director of brand communications for Hankook. “It’s continuously developing. 

“As a relatively young brand, Hankook needs to develop its identity and create brand equity. To this end, we want to be known as a technology-focused, market-driven manufacturer. Kontrol Technology is the ‘packaging’ as we go forward in communicating with dealers and consumers the essence of Hankook.”

Meanwhile, the company is making progress on several other fronts. Hankook’s newest distribution center in Aurora, Ill., a Chicago suburb, has helped the company achieve better supply. (The warehouse, Hankook’s sixth in the United States, opened last spring.)

Hankook also is working on several future original equipment fitments, including one with “a very popular brand name that has manufacturing plants in Mexico and will soon sell vehicles in North America,” says Bainbridge. 

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The Hankook brand currently enjoys 3.6% of the total U.S./Canadian OE consumer tire market, according to Modern Tire Dealer research. In North America, Hankook supplies OE tires for the Ford Focus, Edge, E-250, F-150 and other vehicles. (In addition, it has global fitments with General Motors Corp., Kia, Hyundai and other auto manufacturers.)

Bainbridge believes Hankook’s OE presence will boost its replacement tire market share. “OE feeds consumer. It’s an acknowledgement the consumer recognizes.”

Hankook’s North American business is on solid ground despite the challenging economy, he says. “Our business is double digits ahead of last year.”

Parent company Hankook Tire Co. posted sales of $1.06 billion during the third quarter, the third consecutive quarter it achieved more than $1 billion in sales.

Sales were driven by 40% year-over-year gains in the ultra-high performance tire category.

Hankook Tire Co. is expected to produce 74 million units in 2008, according to Bainbridge, “which will be a high-water mark for us.”

The company is “looking at opening a sixth plant, but we’re still in the investigative stage.” Last year, Hankook executives told Modern Tire Dealer the firm planned to increase capacity at its factories in Geumsan, South Korea, and Jiaxing, China.

“We’ve been very successful financially,” says Bainbridge. “We’ve made some very good decisions to get to where we are. We’re making wise decisions about how to expand production.

“But we’re being a bit cautious. We’re looking hard at the next six to 12 months to make sure the decisions we make about expanding capacity are the right ones.”

Independent tire dealers will continue to play a crucial role in Hankook’s North American development, he adds.

The company has 400 direct dealers and distributors who represent around 3,600 points of sale.

“When our company came (to North America), it was founded on wholesalers. They’re very important to us.

“As a company that’s trying to create more brand value, we want to continue to cultivate our wholesale business and grow more with direct retailers.”    ■

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