AKRON—Someday a sparkling new plant built by South Korea's Hankook Tire Co. Ltd. will spring up in North America. Just not yet, according to the firm's vice chairman and CEO.
“As we are growing and more customers need our tires, I think we will have to build a factory in this part of the world,” said Seung Hwa Suh, in an interview after giving the keynote address at the Tire Society meeting Sept. 20 in Akron. “We don't have any formal plan yet.”
Hankook has some work to do before it reaches the tipping point where a North American factory is the answer.
“In order to have a facility, we have to have market share,” he said. “You build a large factory, and if you can't sell the tires, it will be a disaster.”
Suh said the firm must increase its market share and improve its brand position in the region. At the moment, demand is higher than Hankook's ability to supply customers in North America, with tires being shipped from the firm's plants in South Korea, China and Hungary.
While Hankook operates five research and development centers throughout the world—including one outside Akron in Uniontown, Ohio—the company's products essentially are the same wherever they are made.
“Wherever we produce our tires, we give them the same recipe, the same production techniques,” he said. “Some people prefer to buy tires with a Korean origin, some people prefer a European origin. We are trying to persuade the customer that as long as they buy the Hankook brand, they are buying the same level of high-quality tires.”
In Europe, Hankook is hard at work on the second phase of its tire plant in Dunaujvaros, Hungary. The first part of the project resulted in the capacity to make 5.5 million tires annually, and the second phase, which Suh said could be completed by the end of the year, will provide another 5.5 million tires.
“But eventually, I feel we can make 12 million,” he said, because of improvements in productivity and increasing the skill of the plant's staff.
Suh said Hankook's success in winning original equipment customers is a big benefit, and not just because generally 50 percent of the customers replace their tires with the same brand that is on the vehicle.
“By supplying the auto makers, our level of technology is improving,” he said.