Hankook: 'We will become a global brand'
The Hankook Tire America Corp. dealers who gathered in Cancun, Mexico, for the company's annual dealer meeting were treated to an unexpected and candid presentation by Hyun Bum Cho.
Cho, the chief marketing officer for Hankook's parent company, Hankook Tire Co. Ltd., was direct with his comments to start the dealer meeting.
“In the long-term, we want to have 12% to 15% market share in North America,” he said. (The company says it currently has about 5% share of market in the United States.)
Cho said 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 that 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 out tires. We do not want to be a niche (Ferrari) tire maker.”
Cho said Hankook wants to balance its worldwide business regionally, but he also told dealers that “we like America and Canada to grow our business.”
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.”
Goals for 2013
Hankook Tire America’s senior vice president of sales, Shawn Denlein, was also upbeat in his comments to dealers. He said the company just had a 20% sales increase to $1.2 billion in 2012 and the company also increased in 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 were 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 won't become available to dealers until March. 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.
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 has added Fox college football and NFL on Fox to deliver its consumer message.
Denlein said the further addition of courtside signage at NCAA basketball events will help the company target younger consumers.
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, have a 30-day backorder fillment.
The company announced several new truck tires. The AH15 is a wide base rib tire; the DL12 multi-application drive tire due out late this year; long-haul "ultra" wide-base tires called the DL07 and TL07; and the AM15, a wide-base rib all position tire.