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[Power Korea] Hankook Tire: Pride of Korean tires

Korea’s largest tire maker aims for global top 5 by 2015

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Published : 2013-02-25 19:44
Updated : 2013-02-25 19:44

Hankook Tire has devoted its 72-year history solely to tire making.

The nation’s first and largest tire maker, which produces some 90 million tires every year, has grown into the world’s seventh-biggest tire manufacturer today.

Last year, when global tire makers were struggling slowing sales, Hankook Tire was the only one among the top 10 that posted robust growth.

Between 2008 and 2012, the company saw its global sales increase by an annual average of 15 percent. Last year, it logged 7.291 trillion won ($6.7 billion) in sales, almost doubling from those in 2008.

The company aims to enter the global top five by 2015. 
Hankook Tire CEO Suh Seung-hwa. (Illustration by Park Gee-young)

Hankook Tire paved the way for global expansion starting with its first exports to Pakistan in 1962.

Following the establishment of its first Middle East branch in Kuwait in the 1970s, the company extended the number of regional offices to 18 in the 1980s, taking advantage of increased trade, low exchange rates and cheaper oil at the time.

Currently, Hankook Tire operates four head offices in China, Europe and the United States with 29 local branches marketing its tires in some 180 countries.

More recently, the company is stepping up efforts to seek future growth engines in emerging markets.

In 2009, the company established an office in Egypt as a regional base to enter Egypt and other North African markets. It is also seeking new sales sources from regions such as the Commonwealth of Independent States and South America.

The relentless expansion and strong growth have been largely driven by the company’s continuing emphasis on research and development efforts since its establishment back in 1941.

In the 1970s, Hankook Tire’s research center started with a small lab where only 35 researchers used to work day and night. Later, a full-fledged research center was established in Daejeon, some 164 kilometers south of Seoul, in 1982.

The company invests about 5 percent of its sales every year into R&D, while it has research centers set up in six countries including Korea, China, Germany, Japan and the United States.

Each research center develops tires that are optimized to respond to different weather and road conditions from individual regions. They also work on premium products ranging from ultra-high-performance tires for motor sports to environment-friendly, next-generation tires.

In January, the company announced the expansion of its Korean research center in partnership with the London-based Norman + Partners, an architectural firm founded by renowned architect Norman Foster.

In collaboration with him, a new seven-story building will be built on the 99,174-square-meter site to accommodate futuristic facilities such as automatic tire storage and smart information systems.

Hankook Tire, the first Korean company to start tire production more than seven decades ago, is now working together with the five major global carmakers ― General Motors, Volkswagen, Toyota and Renault-Nissan and Hyundai Motor Group.

Its global partnerships sped up in the 1990s when the company shifted the focus of its marketing strategy from the domestic market to overseas markets.

Until then, the company largely focused on elevating product quality, realizing the importance of value-added management to make the next business leap.

Following the first order from Volkswagen Mexico in 1991, the company signed a deal with U.S.-based Ford Motor in 2003, stepping up efforts to expand its presence in the United States.

The company, whose tires are already favored by Audi and Mercedes-Benz at the German auto racing DTM, also became the first Korean tire maker to provide original tires to BMW’s News 3 Series in April last year.

“Hankook Tire is one of the fastest-growing tire makers in the world as it has continued investment for balanced growth,” said CEO Suh Seung-hwa, who took office in 2007.

“We will strengthen our status as a global premium brand that is equipped with cutting-edge technologies and quality products.

By Lee Ji-yoon (jylee@heraldcorp.com)

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