Hankook has traditionally been very quiet about itself and its activities. Yet its passenger tire marketshare has grown to a respectable 2% of among tire dealers. What has contributed to the Hankook’s growth in North America?
Jin W. (J.W.) Choi became president and CEO of Hankook Tire America Corp. in 2001, capping a career with Hankook Tire Co. Ltd. that began in 1975. Choi served in a wide variety of management positions for Hankook Tire Co., including international assignments in Iran, Germany and the U.S. Prior to his current assignment with Hankook Tire America, Choi served as director of overseas marketing for the parent company, headquartered in Seoul, South Korea. As head of Hankook’s U.S. business, Choi has focused on increasing sales and building marketshare for the Hankook brand, including greater emphasis on brand and image building.
"Several things have contributed. First, increased brand awareness – and brand acceptance -“ through strategic planning and ensuing marketing initiatives. Hankook is becoming more of a household name, thanks to marketing support for dealers, nationwide sports marketing, and advertising and promotional initiatives nationwide.
"We have also regionalized our territory managers. Today we have a great deal more contact with dealers on a personal level. Our territory managers are in closer contact with dealers, and that exchange has been very good for business.
"We have also expanded our warehousing and distribution efforts to ensure that product reaches its intended destination on time. This is critical as we broaden our product lines and promote our passenger tires."
What precipitated Hankook becoming more open in North America?
"For years Hankook was regarded as the ‘quiet’ company. We took a low-key approach to touting our technology, manufacturing and new product development. But now we are well established in North America. We have a remarkable edge in technology, thanks to our Akron facility and other technology sites around the world, and we have targeted several key markets and focused on those demands ®€“ namely the ultra-high performance and compact enthusiast markets, the light truck and luxury SUV markets, and our involvement in motorsport activities.
"Most importantly, we have established firm OE relationships around the world, most notably our recent OE fitment with Ford for the 2004 F-150 pick-up truck.
"It’s time now to share our success story with the industry and with the media that covers this industry. We’ve always made great tires. Now, we just want to share the good news that we’re also a great tire company."
Worldwide, Hankook is the 11th largest tire company. What are Hankook’s sales and marketshare goals relative to the global tire market? And what are its goals in North America?
"Globally, we will continue to respond to market demands from various segments of the industry. We will pursue innovation through our state-of-the-art market-driven technology, and continue to develop tires that meet and exceed our customers’ expectations. In North America we will do much of the same, but with an emphasis on specific market segments and tailoring our technology and production to meet the needs of those market areas. Specifically this entails focusing on markets such as sport enthusiast, ultra high performance, off-road and SUV tires."
What role will the Aurora brand play in your North American efforts?
"The Aurora brand will remain an associate brand. Aurora has established its own market niche, but we will focus on Hankook as our primary consumer brand."
Hankook has become more active in motorsports in North America. What role will motorsports play in the company’s future?
"We intend to continue with our successful motorsport program and, depending upon the availability of additional motorsport opportunities, we will enter those arenas as well. It fits comfortably into our strategic plans for 2004 and beyond."
Recently, Groupe Michelin took a 10% stake in Hankook Tire Co. Can you explain this relationship and what advantages it gives both parties, both globally and in North America?
"This strategic alliance with Groupe Michelin will give Hankook a higher profile worldwide and will enhance core technologies and distribution networks to boost company value for shareholders, employees, and our customers."
Hankook has been very active in developing ventures in China. How will Hankook leverage these relationships, and what advantages do they give your company in the global marketplace?
"China represents the next market boom, and again, we are active in China for a number of strategic reasons. Certainly, the population there affords us significant opportunity for sales and for increased production. China presents a skilled, competitive workforce of dedicated employees who can maintain our product quality. And in sales alone, this venture represents unlimited potential.
"The OE possibilities there are numerous and can only improve our worldwide image as a high-quality OE provider. And, finally, our venture in China represents an easy flow of materials and information due to the ease of exporting from China to Korea and points west."
What role will OE business in North America play in Hankook’s plans? And what are some of the things Hankook has done to earn this type of business?
"We are very proud of our OE relationships in the U.S. and overseas. Certainly our relationship with Ford for the F-150 is the icing on the cake. We will continue to pursue additional OE fitments in the U.S. and overseas, building on our solid track record.
"To earn this business, Hankook devoted thousands of man-hours to technological development, computer design, and lab and road testing. In addition, OE fitments require ISO certification, which our facilities earned. That is essential in paving the way for us to pursue other OE relationships. These certifications include production, management, manufacturing, plant operations and in meeting environmental standards. In addition, we achieved Ford’s Q1 certification as part of the approval for the F-150.
"OE certification represents an enormous expenditure of time, energy, money and facilities, and it is paying off for us. We’re proud of these endeavors and will continue to prove ourselves in the future."
What percentage of its sales does Hankook reinvest into R&D? What types of R&D activities is Hankook involved with in North America?
"Hankook typically reinvests 5% of its annual sales in research and development, and has done so for the last five years. Our R&D involvement in North America is far-reaching, and includes improvements to current products as well as the development of new tires."
Hankook held a driving event for the media earlier this month in Las Vegas. It was the first such event for Hankook in quite some time. What other types of activities like this will Hankook conduct to reach out to dealers and consumers?
"With our Discover Hankook Ride & Drive Program in Las Vegas, our intention was to educate the media concerning the quality, the technology and the level of dedication that Hankook employees devote to developing our tires. This ‘educational’ opportunity will, in turn, serve to educate consumers about our products and our commitment to excellence as a technology-focused, market-driven company.
"It’s also a learning experience for our present and future dealer network who, in turn, will educate the end-user ®€“ the consumer. This is a process we are very proud to undertake, and one that we intend to repeat in the future in different venues."
Independent dealers are Hankook’s primary distribution in North America. How do you see Hankook’s relationship with its dealers growing or evolving in the coming few years?
"Our relationships with our independent tire dealers will certainly grow stronger over time. As I said, they are becoming more educated about Hankook quality, and this will go a long way toward reinforcing current relationships and establishing new ones. We’re confident that we are doing everything right in this regard. We have the right products and the best people to bring those products to market, coupled with a solid group of loyal dealers, and strong marketing to back it all up.
"New dealers will learn that Hankook has a lot to offer their business, and we feel good about that. I’m certain that every area of this country will become ‘Hankook Country’ in the days ahead. We have accomplished a lot, but there is still more to do. We’re more than ready and willing to do it."
