PARADISE ISLAND, Bahamas (Jan. 25, 2008) — Hankook Tire America Corp.´s officials asked its dealers attending its annual meeting in Paradise Island for patience as the tire maker aims to provide better fill rate. They even had a slide put up on a screen that boasted: "Stock levels and fill rates will get better!"
Hankook President Greg Pae told about 75 dealers — representing the Wayne, N.J.-based tire marketer´s retail, commercial and wholesale customers — that the company is coming off a challenging but record-setting year, yet a disappointing one in that "we were not able to meet your needs." Hankook´s 2007 U.S. sales topped $751 million, an increase of 9.5 percent over the previous year.
Expressing his "gratitude and congratulations" to dealers for their part in driving the company´s sales to new heights, Pae promised that "Hankook will invest like never before" in areas including manufacturing, proprietary technologies and the development of new sizes and products. He predicted that with Hankook Tire Co. Ltd.´s newest factory — near Dunajvaros, Hungary — online and slated to produce 5 million units this year, Hankook´s global output is expected to exceed 73 million tires this year — two years ahead of schedule.
That was good news to dealers, many of whom left last year´s dealer meeting griping that they didn´t have adequate supply. Hankook has been struggling to keep up with increased demand and the numbers of tires the company is cranking out continues to grow, according to Bill Finn, senior vice president. Meanwhile, the tire maker is scouting locations for a sixth plant, though no timetable was given for that endeavor.
Mr. Finn also said the company is opening up more distribution points to increase service to dealers. Dan Wheeler, director of dealer programs, announced that Hankook is adding a 200,000-sq.-ft. distribution center in Chicago that will pump up the firm´s total U.S. warehouse space to 1.5 million square feet.
To answer dealers´ concerns that Hankook´s growing presence in original equipment fitments must be cutting into its ability to provide them with the products they need, Finn called OE "a blessing and a curse." Pae said the company will maintain an OE ratio of 25 percent to supply, pointing out surveys have shown that a majority of consumers typically prefer to replace their vehicles´ OE tires with what came on them.