Hankook Tire poised to build its first US plant
Company trying to narrow gap with bigger rivals such as Michelin and Bridgestone in developed markets
Cho Hyun-Shick, president of Hankook Tire, during a news conference in Seoul, South Korea, yesterday. Photograph: SeongJoon Cho/Bloomberg
Hankook Tire is poised to build its first US plant in a move to bolster its presence in the world’s second largest car market, as the South Korean tyremaker aims to join the ranks of the top five global tyremakers.
The company is the world’s seventh largest by sales in its sector, with a strong presence in emerging markets including China, the world’s largest car market, where it is the biggest manufacturer with a 15 per cent market share.
Hankook has been trying to narrow the gap with bigger rivals such as Michelin and Bridgestone in developed markets by burnishing its brand value, partly via motorsports marketing. It is the official supplier to Deutsche Tourenwagen Master, a Europe-wide tour of 10 races, and has ambitions of becoming the Formula One supplier.
“We are in talks with three US states – Tennessee, South Carolina and Georgia – to build a plant, and we will decide the final site by the end of this year,” Cho Hyun-shick (right), the company’s president for overseas expansion, said yesterday.
The US is Hankook’s third largest market after China and Europe. The company controls 5 per cent of the market for replacement tyres and 7-8 per cent of originally equipped tyres in the US.
The new plant will have an annual production capacity of 5-10 million units, according to Mr Cho.
The company also said it recently won its first contracts to supply tyres to Daimler for the new Mercedes-Benz S-Class and E-class sedans and to Nissan for the Altima sedan, which Hankook hopes will help improve its brand recognition in the premium market.
Analysts said opening a factory in the US is a good move, with the market there growing well. – Copyright The Financial Times Limited 2013