Tire technology continues to shape Hankook Tire America Corp., especially for developing tires for electric vehicles.
The company is focused on that as well as future mobility and sustainability, as it looks to improve its position in the North American market. Rob Williams, president of Hankook Tire America, provides a company perspective as the second half of the year begins.
In Q1, we saw an increase in both sales and operating profit. The EV (electric vehicle) segment has been extremely strong for us. We have grown in the global electric vehicle market by our customized technologies and strategies. We will continue to focus on leadership in the EV tire and high-performance tire markets.
It has been a difficult year for everyone. We tried to diversify our segments, paid careful attention to what our customers are looking for and invested more in future mobility technology, including EV technologies.
As Hankook does not have a manufacturing facility in Russia, there was no direct effect on our North American business.
Similar to other companies operating production sites in Europe, our energy costs have increased at our Hungary plant.
Rob Williams
With the semiconductor supply chain being more secure, car production is increasing, which naturally leads to overall improvement in the supply chain in the automotive industry.
Raw material prices are stabilizing; however there remains room for fluctuation with the lingering possibilities of a global economic slowdown.
The North American market is extremely important to our growth strategy to further drive new product and segment expansions. The Tennessee plant represents our commitment to the U.S. market and local for local approach to manufacturing.
We must continue focusing on increasing market share and growing in major markets by strengthening our partnerships with our key partners and premium car makers. Additionally, we aim to be a leading trend-setter in the EV market to break the top 5.
The fire at the Daejeon plant was completely extinguished on March 15 and is still undergoing official investigation. We are now currently going through internal assessment of what should be done, while focusing on recovering local damage and supporting our neighbors. Part of the plant that was not affected by the fire is doing test-run productions; however we are still unable to predict when the plant will be back to full production.
The Daejeon plant consists of three parts: two of them are responsible for the production, and the third is the warehouse. Most of the plant is shut down for official investigation, but one product line, which was not affected by the fire, is currently going through test runs under strict supervision. We have spent much time optimizing our supply chain to be able to source and distribute product to supply our market with minimal interruption.
We are still on track to break ground in 2023 for our phase 2 project in Clarksville. When a date is announced, we will be sure to inform the press.
The Tennessee plant was built with a focus on innovative manufacturing, and this will carry through to the expansion. We will continue to review strategic plans in accordance to market demands and our sales figures. We are focused on a local for local supply to help ensure steady supply for this market now, and for the future.
Sustainability and movements in future mobility have always been a main initiative for our company. We continue to have a strong focus on our iON product line specifically for electric vehicles to stay on track with our future-driven thinking. We also know for a fact that electric and hydrogen mobility is to be the standard of future road cars. So taking a leadership role in the EV sector will serve as a sustainable growth engine.
EVs are one of the most essential factors in future mobility, and we are proud to be a first mover in this business. The EV industry is relatively new in the industry's short history, meaning much can still be done. We can be quite creative and innovative in the industry, however, at the same time, we are very careful as it's fairly new, and we need to always care about safety, making this an exciting and yet, a very serious job. With Hankook Tire's state of the art technology, we are proud to accomplish a full portfolio based on iON Performance Technology.
Motorsport racing has been continuously growing over the years. Partnering with Lamborghini Super Trofeo adds to our international motorsport portfolio, another step to further enhance our premium brand.
The reason we sponsor motorsports events and develop tires is not only to increase brand awareness through motorsports itself but also because it is a crucial means to showcase our company's technical capabilities using our own products.
Additionally, since the profile of motorsports fans is similar to the target customers for tire purchases and tires are essential products in motorsports, it is important to demonstrate our technical prowess in prominent motorsports events.
We have achieved a significant milestone in our business endeavors. Starting from this season, we have been successfully providing the iON electric car tire in the FIA Formula E World Championship and Ventus tire in the Lamborghini Super Trofeo series. These achievements have not only highlighted our commitment to superior performance but have also showcased the exceptional capabilities of our electric tires and high-performance tires to the world.
The future of mobility, specifically the EV segment has become a popular topic with our dealers, during trade shows and other events within the industry. This has allowed us to showcase our iON evo family of products, which have been very well received.
The market supply rebounded quicker than expected with logistic constraints vastly improved.
We are continuing to see growth in the EV market. The SUV/LT market has also stayed popular within the U.S. market. We are constantly expanding our Dynapro family to meet the demands of consumers and trends in the market. Our latest Ventus S1 evo Z AS X that launched earlier this year is tailored for luxury SUVs. We will continue to research the market and create products that meet the demands of the market.
Hankook is rapidly positioning itself in the EV market and striving to become a global EV top-tier company. As the EV future trend is driven by OE, Hankook aims to lead the EV tire market by thoroughly analyzing the EV OE market from multiple perspectives and taking preemptive actions.
North America is a highly important market for us, and we maintain a close relationship with OE makers such as Tesla, GM and Ford, as well as Japanese companies like Toyota and Nissan that have plants in North America. We take advantage of the geographical proximity to supply Tennessee-made products.
The EV segment for sure, as an early adopter with our state of the art technology, we are proud to have a full portfolio based on iON Performance Technology.
Additionally the SUV segment is expected to continue its unparalleled growth, and we can meet these demand with our new Ventus S1 evo Z AS X.
We plan to expand our product portfolios and will have more information to come. We will make sure to update customers and press when we have additional details to share.
EV-related technology, digital transformation, airless tires and sustainable materials. It's all about sustainability these days.
Sustainability is the core of our business. We want to make the driving experience friendlier, and this includes being friendlier to the planet we live in as well.
Our new iON lineup is our most compelling product when it comes to sustainability. With iON, we are committed to advancing the mobility transition toward zero emission vehicles. Our partnership with Formula E also shows our emphasis on eco-friendliness and sustainability.
We will be continuing the Phase 2 project of the Tennessee plant and working to improve conditions for both our customers and our employees.
These are fast-changing markets with varying demands from different sectors, but our goal is to meet everyone's needs while always keeping safety in mind. Given the industry focus on sustainability, we are given the challenge of finding ways to run the company itself to be more sustainable. Not just the materials in the tire, but methods in making the tires.
We have an excellent network of partners and are in close contact with them to respond the rapid changes occurring in the market. We want them to know that we are always listening to their thoughts and making efforts to provide products that are needed by our stakeholders.
We will continue to respond to the market needs with cutting edge products with the greatest of technology & innovative advancements. This can be demonstrated with our iON evo product line & our Ventus S1 evo Z AS X lineup.
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