Hankook Gains Ground on its Goals
Continued growth in the U.S. and Canadian markets will be the key for Hankook Tire Co. Ltd. to reach its self-imposed goal of being the industry’s fifth largest tire company by 2020. This is the message about 80 key distributors and dealers of Hankook-branded tires were told at the company’s annual Partner’s Day Meeting in Los Cabos, Mexico, last month.
Shawn Denlein, (see sidebar below) 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.
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%.
Being a first tier brand with overall market share of 5% 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 Hankook says makes it the fifth largest manufacturer in terms of production. The company wants to be capable of producing 130 million units by 2020.
Its Clarksville, Tenn., plant should be ready for production of passenger tires in April. Hankook hopes to have a 1.7 million tire capacity by year’s end and be at a level of 5.3 million 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.
The first stage production is slated for the replacement market and when the second stage of production begins, OE production will start, according to Hankook.
New product launch
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. The company is planning to increase its marketing budget by 40%. Hankook is moving away from its “Be One With It” worldwide advertising campaign and will be utilizing a targeted campaign for the U.S. market. The ads will feature the tagline “Never Halfway.”
On the commercial truck tire side of the business, Hankook execs said the biggest thing that they were doing to grow the business was the company’s National Account Broker program. This national account program is designed to allow Hankook to penetrate larger fleets, something it could not do before. Hankook says it has added people on the TBR side of the business and they have the potential to start TBR production in the Clarksville plant sometime in the future. As yet, nothing has been decided.
At this time, Hankook says it has no plans to launch online sales direct to the consumer, “but we watch it because there’s always something going on with this platform, so if we do it, we want to make sure we understand it and do it right.” The company believes the jury is still out on how successful it is. ■
Denlein leaves Hankook for position with Monro
After the Hankook Partner’s Day meeting, but before Modern Tire Dealer went to print, Shawn Denlein, senior vice president of sales for Hankook Tire America Corp., resigned from the company effective March 3. He had been with Hankook for the last four years.
Denlein has joined Monro Muffler Brake Inc. as its senior vice president of tire merchandising. He reports directly to Monro President and CEO John Van Heel.