When it comes to choosing a brand lineup, Korean tire dealers have a limited choice: Kumho or Hankook...or Nexen and/or a limited selection of imports.
The Korean replacement market is dominated by the ``Big 2'' tire makers-Hankook Tire Co. Ltd. and Kumho Tire Co. Inc.-each of which controls about 40-45 percent of the marketplace. Their junior counterpart Nexen Tire Corp. has 5 to 10 percent. Imports, led by Group Michelin, make up the remaining 5 to 10 percent, according to available data from the participants.
With a market so dominated by two major players, dealers are exclusive to one or the other major players.
Co-market leader Kumho has developed two retail concepts that are in play-Automaster and Tire Pros-with the latter focused almost exclusively on the performance end of the market.
Do Il Lee, an independent dealer in Kimpo, suburban Seoul, converted his 7-year-old dealership two years ago to Kumho's Automaster program and has doubled his sales since converting. Before that, he was a true independent.
Mr. Lee spent 15 years with another dealership before branching out on his own seven years ago, he said.
His company has four full-time employees, but his own schedule brings new meaning to full time. His Automaster shop is open 8:30 a.m. to 8:30 p.m. daily and is closed only two days a month, on the first and third Sundays.
Mr. Lee said he does close to $1 million in sales of tires and wheels a year at his four-bay outlet, where his team performs balancing and alignment services. He also is a licensed service dealership for Renault Samsung, the Korean affiliate of France's Renault S.A.
All of these operations are housed in a two-story building covering approximately 3,600 square feet. Tire storage is on racks above the work area and in a small back storeroom. Customers enter the showroom/office through the service area.
Out front, where there's room for about four cars to park, Mr. Lee has a five-tier open rack displaying about 240 of Kumho's performance tire range. This is just for show, though. All the tires on display outside are factory rejects with holes drilled in the sidewalls.
Kumho claims a domestic distribution network of 28 branches distributing to 1,220 exclusive independent distributors, who in turn sell to more than 60,000 retail outlets throughout the country.
There are about 100 Automaster outlets and 40 Tire Pros stores. Automaster is not a franchise in that there's no franchise fee, but those dealers selected to operate an Automaster outlet must meet certain appearance and customer satisfaction criteria to stay certified.