AKRON—Hankook Tire Co. Ltd. expects to gain its first original equipment fitments on ``North-American-produced and sold vehicles'' in coming months. Andrew W. Zeisser, vice president for OE and technology, said the South Korean company's tires will appear on 2000-model-year new cars beginning this fall.
But he would not reveal the manufacturers or models that will use Hankook as OE because of ``customer restrictions.''
``The first goal is to get our name out to show up on some vehicles,'' he said.
Mr. Zeisser made his remarks at a press conference on April 27 following Hankook Chairman Yang-Rai Cho's keynote address at the Tire Society meeting in Akron.
Earlier, Hankook announced that, starting in July, it would supply OE tires for two models made by Ford Motor Co. in Europe.
In January, Hankook announced it had secured an OE fitment for Daihatsu Industries Co.'s new light truck due on the market later this year. Hankook said it is the only non-Japanese tire company to provide tires for Daihatsu. It also has approached Opel, Fiat and Nissan about potential OE contracts.
Hankook has repeatedly said it wants to be one of the world's top five tire makers by early in the next century. The Korean company ranks No. 11 in global tire sales, according to Tire Business.
Last year, the company's total sales were about $1.1 billion—a 16.2 percent gain over 1997. But Hankook will have to triple its sales to crack the top five.
Geun-Hi Hong, vice chairman and CEO of Hankook, said that moving up to No. 7 will not take much time, but to get to No. 5 ``we need a lot of effort.''
In recent years Hankook has made a push into China and in mid-May will dedicate two plants there in Jiaxing and Jiangsu. The company claims a 3.5-percent market share in China and hopes to reach 10 percent.
``We can perhaps increase our growth in China by three times,'' Mr. Hong said.
The number of new cars on China's roads should increase ``10-fold'' in the next five years, he added, and Hankook plans to "cover" that nation.
In his speech, Mr. Cho said the company's sales dropped sharply during the Asian economic slump of 1997.
``As a nation, it was probably the most difficult time since the Korean War,'' he said.
Still, Hankook dedicated a new plant in Kumsan, South Korea, that year and initiated a $206 million expansion program at the plants in China.
The last two years, Hankook's overall sales have been fueled by exports, which contributed 69 percent of sales in 1998.
Hankook "took advantage of the sharply depreciated (Korean) won to launch an all-out export drive," the company's 1998 annual report stated.
Mr. Hong maintained, however, that the increase in exports was tied to the increased availability of products and said the company's goal is a ratio of 45 percent domestic and 55 percent export sales.
Hankook's U.S market share is small—about 2 percent—but Seung-Hwa Suh, president of Hankook Tire America Corp., said the company is working on improving the image of its products through improved availability and customer service.
``We want to increase the value of our products by increasing the value of our image,'' he said.
Hankook initiated a national TV advertising campaign in the U.S. last year, and Mr. Suh said more ads are running this spring.
He said Hankook is concentrating on better availability from the distribution center it opened in the Chicago area last year. Another warehouse, in Portland, Ore., is scheduled to open this year.
Summarizing Hankook's management philosophy, Mr. Cho called it ``speed management,'' meaning the company must be able to adapt swiftly to changes in the economy and the market.
``Survival in this business,'' he said, ``comes down to this: total customer satisfaction.''
He also advocated creating a think tank for the tire industry that would lead to a ``more responsible tire industry and a sharper focus on the environment.''