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Hankook's Williams Discusses Company's Growth Strategy

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"We have not slowed down production one bit and we would expect that to continue into 2023," says Rob Williams, senior vice president, North America sales, Hankook Tire North America. "With the Tennessee plant, the more products we can get out of there, the better we are."

| Photo Credit: Hankook

Hankook & Co. Is making significant investments in its North American operations. The company recently announced a $1.6 billion investment that will significantly expand production capacity at its consumer tire plant in Clarksville, Tenn.   

The capital infusion will more than double the plant’s annual passenger and light truck tire production to 11 million units and eventually will enable the facility to build one million TBR units each year. 

Hankook also continues to pursue key original equipment fitments and is preparing to formally launch its new Ion line of electric vehicle tires. 

MTD recently discussed these initiatives – as well as Hankook’s take on the North American market in general – with Rob Williams, senior vice president, North America sales, Hankook Tire North America, Hankook & Co.’s domestic subsidiary. 

MTD: Can you describe the performance of Hankook's business in the U.S. during 2022? What were the bright spots? What have the challenges been?   

Williams: 2022 was an uncertain market, but despite that we are meeting our expectations, if not exceeding them. We’re on track right now with market performance. And TBR is probably a little bit stronger.  

On the consumer side, our passenger tire business is holding up a little stronger than our light truck tire business. I think the (consumer tire) market is 95% to last year and we would be similar overall.  

Clearly, we’ve had some excitement with the announcement of our Tennessee plant expansion. Our Ventus S1 all-season has been a big success. We continue to grow our Dynapro family of tires with the XT and AT2 Xtreme, which have done really well for us. And we’ll have some exciting news in the next 30 days about our Ion EV (tire) launch.  

A little bit further away from the U.S., we’ve had some of our partners make the trip to South Korea where we’ve put up our new Technoring, which is the largest Asian test track.  

As far as dealers are concerned, I think everybody is saying the same thing. Inventory is clearly getting stronger for our dealers and for Hankook. 

MTD: Hankook is making a massive investment in its Tennessee plant. How would you describe supply coming out of that facility?  

Williams: First of all, the quality of the product is fantastic. Our productivity is getting better every day. Today, we’re still on pace to produce roughly five million tires out of our Tennessee plant and that’s going to be a mix between OE and replacement. Of course, we also share some (supply) with our Canadian folks.  

MTD: Does the Tennessee plant make the majority of the tires that Hankook sells in the U.S. or is it mixed with what you’re bringing in from overseas?  

Williams: It’s a mix. The demand we have in the U.S. is far greater than what we can produce in Tennessee today. We get roughly 40% of our product for both the OE and replacement markets in the U.S. (out of Tennessee) and then the remainder comes in from the plants we have in other parts of the world. 

MTD: Talking about supply, 10 months ago dealers were telling us that supply was a big problem. The pendulum seems to have swung the other way and dealers are telling us they have plenty of inventory on hand right now. Has that impacted your production? 

Williams: It has not. We have not slowed down production one bit and we would expect that to continue into 2023. With the Tennessee plant, the more products we can get out of there, the better we are. But we’re nowhere near the point where we have to throttle back on production. 

MTD: You mentioned the TBR business. Can you talk about Hankook’s activities on the medium truck tire side?  

Williams: The market has been very strong. We have been keeping pace with the market, so we’re very pleased with the results we’ve had on the commercial truck side.  

We continue to focus on two things – dealer growth and fleet growth – and we’ve been very fortunate that we’ve been able to grow the fleet segment quite nicely with the help of our dealer network.  

Our goal on the truck tire side is to get our product to the end user. And the key to success has been to get as many Hankook tires as possible on trucks in the U.S., with a strong focus on both the long-haul and the regional segments. 

MTD: And that creates pull-through for Hankook’s truck tire dealers...  

Williams: Yes, it absolutely does. We like a nice balance of local-bill business for our dealers and national accounts. We’ve been a tire that has been looked at by our dealer network as a value product. They know they can sell it on their local books and make a nice return. 

MTD: EVs are a small part of the market, but that will change over time. What opportunities to do see for Hankook in the EV area and how has the new Ion line been received by dealers and end users?  

Williams: We’re very excited about the launch of the Ion. We're working on what we call pre-order specials, where we get dealers to put their orders in early.  

We also want to do a lot of training on the product. We’ll have a full line of dedicated EV products for a well-rounded portfolio, so we want to get as many folks educated on the Ion product (as possible).  

I think everybody knows the demands that EVs present – whether it be wanting a quiet tire or low rolling resistance. You (also) want that additional traction and grip. I think we’re going to have a very strong mileage warranty, as well, because we are so confident about how well this product will perform. 

MTD: Hankook has been pretty strategic and active on the OE front in terms of securing fitments on EVs and traditional vehicles. How is Hankook’s OE strategy playing out?  

Williams: When we look at some of our OE fitments on premium vehicles like the Tesla Model 3 and some Audis, we’re confident that our Ion will be a great application. And we surely want to expand that to become a partner with some of these premium automakers.  

MTD: What are Hankook’s biggest growth opportunities in the U.S. market and what role will your dealer network play?  

Williams: I think we all know that larger rim diameter (tires) is not only a growing segment – it's kind of become the segment. In 2021, that 18-inch plus segment accounted for about 41% of our sales and that was up 5% from the prior year, so we expect that segment to continue to grow. And of course, with our Tennessee plant expansion, we expect to make more 18-inch-plus tires. So that’s going to be a big one.  

We talked about our EV products. Clearly that’s going to be a great opportunity for us. I spoke about the Ventus S1 all-season. I think we’ll be in full stride in 2023. And then in our Dynapro family, we’ve heard a lot of feedback about our RF12. And I think it will (present) a great opportunity to regain some momentum in the LT segment.  

I cannot underscore how important it is to continue to grow with our strategic partners – in share of account (and) looking for new ways to bring value to them. And we're looking to grow with new strategic partners as well. Our dealer network is what brings our products to market and (dealers) are one of the most important elements of our business and our success. 

MTD: What are your thoughts on the market in the coming year?

Williams: I think (the market will) go back to traditional pre-pandemic levels when you look at total number of units being sold. But I think the value-added (segments) will be key areas – the 18 inch plus, the light truck segment.  

We put a lot of time and effort into our technology and innovations. And we want to be a good partner. When you put that together, we’ll continue to gain market share.  

I think a lot of our dealers have a lot of inventory and it will be key for us to help them take that to the market and sell the product out. I think our programs and ease of doing business will help. We’re really excited about being part of that in 2023. 

 


 

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