NEU ISENBURG, Germany — South Korea's Hankook Tire Co. Ltd. is moving ahead with plans to add truck tire capacity at its 11-year-old passenger tire factory in Rácalmás, Hungary, with production expected to come on stream in mid-2020.
Hankook is budgeting $358 million for the expansion, which will result in 550,000 units of annual capacity for medium and heavy truck and bus tires. It also will create about 150 jobs.
Hankook said the decision to green-light this expansion reflects its growing business in Europe in the commercial tire sector, including original equipment relationships with several of the continent's leading commercial-vehicle makers.
"After seeing a significant and stable increase in demand over the years, the decision was made to establish a Europe-based truck and bus tire production facility at the company's Hungarian factory," the company said. Hankook supplies these customers predominantly from one of its two factories in South Korea.
Among its European truck customers are Mercedes-Benz A.G., MAN Truck & Bus A.G. and Scania Group, along with trailer manufacturer Schmitz Cargobull A.G.
Since opening the Rácalmás factory in August 2007, Hankook has expanded the plant continuously, boosting capacity 350 percent over its initial rating to more than 55,000 car and light truck/SUV tires a day. Along the way, Hankook has gained OE positions with more than a dozen European brands, including Audi, BMW, Fiat, Ford, Hyundai, Kia, Mercedes-Benz, MINI, Opel, Peugeot, Porsche, Seat, Skoda and Volkswagen.
"As a strategic partner to many leading vehicle makers, Hankook Tire has become well-known worldwide for its first-class technology and premium quality tires in the car and SUV segment, and for some years in the medium and large size truck and bus segment too." Hankook Tire Europe President Han-Jun Kim said.
"Thus we have noticed a sharp increase in demand for our truck and bus tires within the European market, and we hope to soon satisfy our customers increasing demands with the help of our new Hungarian truck and bus tire unit."
The construction is set to begin in June, with production expected to start from around June 2020. Hankook did not disclose the physical size of the plant to be built adjacent to the existing car/light truck tire plant.