Hankook Tire America Corp. executives are looking forward to 2006 after the firm achieved record sales last year in North America of $584.5 million, a 27.2-percent increase over 2004.
The Wayne, N.J.-based tire marketer did not provide income or break down operational revenues, but it did note that it sold roughly 9.2 million units in the North American replacement passenger and light truck market, for a 5.8-percent share.
Its parent, Seoul, South Korea-based Hankook Tire Co. Ltd., reported a 33-percent jump in sales from 2004 to $2.5 billion. The company did not elaborate on factors that affected its bottom line, including raw material costs. Its annual report will be released in March.
Hankook President J.W. Choi announced the results at the company's annual dealer meeting, Feb. 8-12 in Jamaica where he told dealers that Hankook has definite plans to grow and become one of the top five tire manufacturers globally. He said Hankook's global capacity exceeds 58 million units and is on track to surpass 70 million units by 2008 after additional investments and expansions.
``Hankook had a great year in 2005, and I believe 2006 is going to be even better for all of us,'' Mr. Choi told dealers. ``We have the technology to develop the right products for the right markets, and we certainly have the right team of dealers who know how to sell Hankook tires.''
Scott Shubin, vice president of Goodguys Tires & Auto Repair in Fresno, Calif., attended the meeting and said his impressions of the company's performance and goals are ``very favorable.''
``They've come a long way in the past 10 years that I can see,'' Mr. Shubin said, adding that Goodguys has sold the Hankook brand for the past eight or nine years. ``They've gone from just a small manufacturer that had a few products that were inexpensive to someone now who's got a little more respect.''
Other company achievements in 2005 that were highlighted include:
* Continued growth in ultra-high performance tire sales to a market share of 6.4 percent, up from 2.6 percent in 2002;
* A 3.3-percent share in North American original equipment (OE) business, with more fitments coming this year on Ford Motor Co., General Motors Corp.'s Saturn and Chevrolet brands and Hyundai America Corp. and with DaimlerChrysler in 2007. Hankook's existing OE business is with Ford and Saturn; and
* A supply agreement with International Truck & Bus Co., a Navistar International Corp. unit and North America's largest manufacturer of school buses. Hankook will be the standard OE tire on International school buses beginning April 1.
``We believe we're building a strong platform that will generate more consumer brand preference, and that means more replacement sales for our dealers,'' said Senior Vice President Bill Finn.
Bill Bainbridge, Hankook's marketing director, told Tire Business the company attributes its success last year to the wide range of products it launched such as the Ventus V4ES UHP tire and the AM02C, AM06 and DM04 truck/bus radials. In addition, the tire maker added warehouse space and invested in more efficient distribution plus continued a sports marketing and brand awareness campaign that is paying off.
Mr. Shubin told Tire Business he's often seen Hankook's name displayed prominently at home plate while watching baseball. ``It was something I did not think was a good way to spend their money at the time (they started), but now when I look back, it actually was a good thing,'' he said.
In 2006, Hankook's marketing goals and strategy, which Hankook has tagged with the theme of ``growing forward,'' involve doing a lot of the same things only better, such as sponsoring motorsports. Hankook is adding sponsorships of an East and West Coast Formula car series as well as professional drifting and pro rally.
On the West Coast, the company just announced an exclusive sponsorship of the Kaaz USA Motorsports Competition Team for 2006. Kaaz USA, based in Costa Mesa, Calif., will field a team of three drift vehicles fitted with Ventus RS2 Z212 tires that will be used for D1 events and all Formula D events.
The tire maker also plans to position certain Ventus tires for Autocross competition.
``It's not higher-profile, it's not like we're getting into NASCAR,'' Mr. Bainbridge said. ``But by expanding at these grassroots and Level 1 pro racing series and doing more programs that way, our motorsports program will, in essence, double. And that means more exposure to more different people with different racing tires.''
Hankook also wants to add points of sale in 2006 and help dealers promote its brand locally, he noted. The company encouraged dealers to consider ways they would like to partner with Hankook in local advertising.
One example is a program with wholesaler Shore Tire Co. Inc. in Lenexa, Kan. President Chris Shore told Tire Business that his company approached Hankook in December about subsidizing brand advertising and direct mail in the Kansas City metro market for its associate dealers. Hankook agreed and also plans to direct tire buyers to a listing of local dealers on its Web site.
Mr. Bainbridge said Hankook will be visiting dealers and wholesalers in select markets to offer similar marketing programs.
Mr. Shore said he thinks the company's goal of becoming one of the top five manufacturers globally is realistic if it continues at the current pace.
``I've been a Hankook dealer since 1999. My business has grown substantially every year since then and one good thing about Hankook is they're continuing to come out with new products every year that are needed in the marketplace, including new sizes as well,'' Mr. Shore said.