Product launches help spur sales growth for Hankook
|Date Published||September 5, 2005|
Hankook Tire America Corp. boosted sales last year by nearly a third over 2003 and shows no signs of slowing down.
The Wayne-based marketing and distribution subsidiary of South Korea's Hankook Tire Co. Ltd. said many factors influenced its 28.9-percent surge in North American sales last year to $459.7 million. The firm said many of its activities this year revolve around building upon that success even further.
Successful product launches of ultra-high-performance tires in the past 18 months and a brand awareness program that incorporates sports marketing have had a positive impact on sales, according to Hankook Marketing Director Bill Bainbridge.
``There's so many good things in place, that starts with the product and the potential of what we can do,'' he said. ``We're just really over the last couple years beginning to realize that. It's an exciting place to be right now.''
Bainbridge said Hankook's tires are proving themselves as good deals for consumers while at the same time giving dealers higher margins.
``A majority of the growth that we've been enjoying has been developing more business with existing dealers,'' he said. ``The key to our growth right now is, as dealers get comfortable and have some success with a Hankook line, they add another Hankook line and another. The snowball keeps getting bigger and bigger.''
Dealers also have recognized and capitalized on Hankook's brand building through signage at sports arenas and at Major League Baseball games in particular, Bainbridge said. Consumers have recognized the Hankook name at the point-of-sale through the sports association, which has been powerful, he added.
Demand for Hankook products is taking all of the company's output, Bainbridge said, despite the fact that parent firm Hankook Tire has added capacity at its two plants in China. The parent is producing about 60 million units at its Chinese and two South Korean facilities, but Hankook also is negotiating with Eastern European nations to build another factory-its first outside of Asia, Bainbridge said.
Slovakia and Poland are two potential sites, but the tire maker has declined to comment until negotiations are complete.
To keep dealers supplied, Hankook Tire America earlier this year opened a 312,000-sq.-ft. distribution center in Portland, Tenn., and is adding 200,000 square feet there by September. Also, Hankook is adding 100,000 square feet of warehouse space in Los Angeles and Dallas by August and 50,000 square feet in Edison, N.J., by November. New distribution software also was added to help increase efficiency.
``We recognize that after you have a good product, the ability to supply is awfully important, particularly with our company with such a diverse dealer base of retailers and wholesalers,'' Bainbridge said.
He said distribution system improvement has been Hankook Tire America President J.W. Choi's personal ``pet project.''