Hankook Tire America Corp. has announced bold plans to grow its position in the United States. Rob Williams, the company's president, provides a progress report.
MTD: During Hankook’s Partners Day event, which took place earlier this year, you said Hankook is making a number of investments to grow its position in the U.S., including efforts to become what the company calls the “number one” EV tiremaker. Can you elaborate on that goal and how the new Hankook iON EV tire line has been received?
Williams: First off, the product has been very well-received by both dealers and consumers. We're trying to position ourselves to be one of the top-tier global EV tire companies and so far, we’ve done a very nice job of that with a very well-rounded portfolio of products. We're (also) working closely with OE EV manufacturers, trying to have fitments on some of their products.
We’re continuing with new technologies and innovations to make sure EV owners actually get a chance to experience the vehicle they purchased. We really feel like we’re going to be at the forefront, having a broad range of products, as well as products that are built to last.
MTD: Also during the Partners Day event, you provided details on the $1.6 billion investment that Hankook is making at its Clarksville, Tenn., plant. Why is this investment crucial for Hankook’s U.S. dealers and distributors?
Williams: Dealers and consumers certainly have embraced Hankook products, specifically when those products are produced in the U.S., so we wanted to enlarge that product offering. We’ll be going from five million to 10 million PLT units, as well as a million medium truck tire units.
MTD: Is Clarksville operating at full capacity?
Williams: Yes, it’s operating at full capacity. Typically, our goal is to do 15,000 tires per day, so after seven years of full operation, we are indeed at full capacity. And we want to make sure we can do that for both the OE and replacement markets.
MTD: Are you supplementing supply coming out of Clarksville with products coming in from other regions?
Williams: Yes, we are. We have eight plants worldwide, including the one here in Clarksville. So today, we do source product from South Korea, Indonesia, Hungary and to a lesser amount, our Chinese factories. But the majority of products sold here in the U.S. are produced out of Clarksville.
MTD: It’s been mentioned that Hankook is increasing its number of sales regions in the U.S. Can you elaborate on Hankook’s efforts to put more boots on the ground?
Williams: We want to make sure we have a touch point with our regional dealers. You have a lot more of them spread out, so want to make sure we get in front of our customers so we can work with them on their go-to-market strategy. That’s a big part of it.
The second part is that from a sale leadership perspective, we want to make sure we have good, solid sales leaders, so as a result, we’ve brought in some new folks to help us with our growth. We're looking at our growth ambition and new channels of development that we really want to grow and that can be things like final-mile delivery (and) fleet vehicles like rental car entities, as well as (the) club channel and e-commerce. We felt it was necessary to get more boots on the ground and be more laser-focused on how we want to grow and who we want to grow with.
MTD: What role will independent tire dealers play in Hankook’s growth in the U.S.?
Williams: The independent dealer channel, for us, is very, very important. Today at Hankook, we build a great product, an innovative product and a high-technology product and we in turn entrust that product to our dealer network to help us get those products to the market. We have various channels we engage in, whether it be a national retailer or an independent. The nationals are very important to us, but the independent channel is a bit unique. They’re typically smaller and they're typically very strong within the (areas) in which they trade, so we have to have folks on our side who know those markets extremely well.
MTD: What are Hankook's plans for the Laufenn brand in the U.S. market? How are you positioning it in relation to the Hankook brand?
Williams: Laufenn has truly become a brand of its own. It has a full line-up that covers all the needs of vehicles in the U.S. market. We really look at Hankook as a premium brand and want Laufenn to be strategically positioned so customers can have that value, high-quality, reasonably priced product. We’ve delineated Laufenn from Hankook and we’re really able to meet two different segments of the market.
MTD: How is Hankook working to expand its TBR business in the U.S.? You mentioned the ability to make TBR tires in Clarksville that will be in place after the investment at that plant concludes.
Williams: With the TBR segment, your end goal is to get products to the fleets, so today we work with a variety of commercial tire dealers who really help us (supply) products to those fleets. With TBR production at the Tennessee plant, that’s going to allow us to more efficiently diversify our product availability. Today, we get the majority of TBR (products) from South Korea and we do get some from China, but having it sourced in Tennessee will probably make it easier to have a wider range of products available at the right place at the right time for our customers.
MTD: What's your assessment of the overall state of the U.S. tire market at mid-year, including consumer tire demand?
Williams: Today, when you look at the consumer market, including some of the (domestics) and all of the products coming in from off-shore, the market’s up about 10%. And on the commercial side, it’s actually a little bit stronger. So all in all, I feel that's cause for optimism. I know dealers still have a lot of inventory they’re trying to work through, but the fact of the matter is that miles driven seem to be up and vehicle sales seem to be strong. It looks like the second half of the year will continue similar to the way it's been during the first half of the year.
MTD: Hankook’s parent company has said that it intends to become the world’s fifth largest tiremaker. (Editor’s note: Hankook Tire & Technology Co. Ltd. is the seventh largest tiremaker in the world, based on sales, according to the 2024 MTD Facts Issue.) What role will Hankook Tire North America play in making that a reality?
Williams: A very big part. Today, we represent about 25% of Hankook's global sales here in North America. But talking about the $1.6 billion investment in Clarksville, the fact we’re more than doubling (PLT tire) capacity and the fact we're adding medium truck tire (production), I think it's very clear that our ambitions are as strong or stronger than probably any other manufacturer.
We continue to gain on OE fitments. We continue to have very strong partnerships, both nationally and regionally. As we continue to design, develop, produce and bring to market premium products, the U.S. is vital to the overall growth of Hankook globally.
