At some tire company dealer meetings, there is some type of recognition of the past year’s achievements. It might come as sales awards or could mark the triumph of a certain dealer or highlight a corporate success.
At the Hankook Tire America Corp. 2012 Partner’s Day meeting in late January, recognition went in another direction. While recognizing its dealers for helping reach record annual sales, Hankook officials made it plain that they recognize both the tiremaker’s shortcomings and what it will take for it to reach its future goals.
“This business can only be successful by making long-term, continuous efforts and giving steady and consistent satisfaction to all our partners,” company president Soo Il Lee said in his speech to dealers. “I believe that the pursuit of a short-lived, quick profit cannot succeed in our line of business.”
Even as Lee thanked dealers for helping the company reach a record $1.2 billion in U.S. and Canada sales last year – and as parent Hankook Tire Co. hit a record $5.9 billion in global sales – he acknowledged that the “uncertainty of the U.S. and global economic environment (both in Europe and the Middle East) still casts a dark shadow over our business.”
Locally, Lee recognized Hankook’s fill rate issues and how they impacted dealers. “I admit that our fill rate was less than I would have liked, and I would like to apologize for that. In 2012, we will do everything we can – increase our production capacity and allocation to this market, make investments in bigger and better distribution centers, and operate our new back-order system.”
Lee also stated firmly that Hankook has designs on adding production more locally. “Our desire of having our own factory located in the Americas will be one of our ultimate efforts to improve service,” he told the dealers gathered in Punta Cana, Dominican Republic.
Short of that, Lee said Hankook globally expects to boost plant capacity to 90 million tires annually this year, up from 87 million in 2011, with the opening of a new passenger/light truck tire plant in Indonesia and other efficiency efforts. It is expected that around 2.5 million tires produced at that plant will be headed to North America.
A passenger/truck tire plant in Chongqing, China, also is expected to come on-stream this year and reach full capacity in 2015. At that point, the plant will hit 30,000 passenger/light truck tires per day and another 4,500 radial truck tires daily. While most of that will target the domestic China market, Hankook said some product also could be shipped to North America as needed.
With Lee reminding dealers that “actions always speak louder than words,” Hankook officials took the wraps off of an all-new (and still to be named) associate dealer program.
While details continue to be worked out, Hankook said it would be a multi-tiered volume bonus reward program, with three levels of rewards possible based on purchases and types of products sold. The tiremaker said there would be new POS items and more program details released later this year.
According to Hankook officials, they expect to open dealer registration in February-March, and start delivering program kits sometime in March. By the end of 2012, Hankook hopes to have between 800 and 1,000 dealers join the associate program.
In addition to cash rewards, the associate dealer program – slated to launch April 1 – will likely also include travel and other promotional incentives. A new dealer-focused website will allow retail and wholesale dealers to track sales history and program progress, as well as access their program rewards and place advertising, sign and POS orders.
Hankook also noted it will update its now three-year-old Empowerment online tire training website, adding new training modules, product information and other resources.
Commercial Tire Growth
Brian Sheehey, Hankook’s director of commercial tires, said that despite certain headwinds, the tiremaker’s line haul truck tire sales nearly tripled in 2011.
Looking forward, Hankook’s truck tire sales efforts will focus on increasing in-house share with end-users and dealers, and reducing its “exposure” with trailer OEMs. Toward those ends, Sheehey said, Hankook will enhance its sales efforts, targeting its CPM Program at new line haul and regional fleets, and stressing the high retreadability – and extended lifecycle – of Hankook radial truck tire casings.
“What did we miss on? Well, not enough tires in 2011,” Sheehey recognized. But the tiremaker is looking forward to added truck tire capacity in 2012.
On the new product spectrum, Sheehey noted the planned addition of a 445/50R22.5 super wide drive axle line sometime in 2012.
Hankook Tire Canada
The Great White North was well-recognized in sunny Punta Cana, as Hankook hosted a delegation of about a dozen Hankook Tire Canada dealers, as well as company president Ken Cho and sales vice president Bill Hume.
According to Hume, Canadian dealers suffered much the same fill-rate plight as their U.S. counterparts, and dealers there are “looking forward to increased supply and new products.”
The economy in Canada appears to be stable, Hume noted, and “we are starting to notice new Asian brands entering the market and trying to attack the Hankook brand.” Despite some unexpected challenges, Hume noted that Hankook Canada “finished above 2011.”
Branding Goals
Hankook’s newly appointed director of brand development, Mark Rowe, updated dealers on the tiremaker’s advertising and promotion plans for 2012. Highlighting those efforts will be an expanded tie-in with Major League Baseball teams, and expanded stadium signage (behind home plate and otherwise) placement from 22 stadiums last year to 26 total in 2012.
In addition, Hankook will continue with its two-part baseball-themed consumer programs; the Great Catch element will launch in the next few months, and the Great Hit promotion will come later in the season.
Hankook’s past efforts have resulted in a sharp increase in brand recognition and awareness among consumers, Rowe said, and future efforts will seek to expand brand awareness and build positive brand perception though digital marketing, traditional and “experimental” advertising and media, enhanced retail support, and public relations.
Last year’s much acclaimed Hankook sign in New York City’s Times Square, Rowe said, netted an estimated 540 million impressions. He said the signage program was already renewed for 2012.
Rowe also said there were plans for an iPad app and an in-store kiosk for dealers.
Hankook didn’t introduce any new consumer products during the dealer meeting, but did say that run-flat versions of its Ventus S1 Evo UHP, Ventus Prime2 touring and Icebear W300 winter tires are coming in 2012.
The Ventus S1 Evo run-flat will be available in V-rated size 205/45RF17, and W-rated sizes 225/45RF17, 245/45RF17, 205/50RF17, 225/50RF17, 225/40RF18 and 245/40RF18.
The run-flat Ventus Prime2 will come in 195/55RF16 (V-rated) and 205/55RF16 (W-rated), and the Icebear W300 run-flat will come in V-rated sizes 195/55RF16, 205/55RF16, 225/45RF17 and 225/50RF17.
Wrapping up the business proceedings for the dealer event, former Los Angeles Dodgers and San Diego Padres star Steve Garvey gave some sound advice. Garvey, who now owns his own marketing company and is part of one of several groups trying to buy the Dodgers, reminded dealers that “survival drives you to become better” and that they should not “be afraid to reset your goals” as situations dictate.
