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Hankook to Sell One Hundred Thousand Tires in India this Year

Wednesday, December 26th, 2012

South Korean tire maker Hankook – the highest brand sold in Europe and the Gulf – is eyeing the lucrative Indian market and is expanding its activities in the country. The company aims to sell one hundred thousand tires there and will double its network of dealers from the existing 250 in the current fiscal year. Hankook has also planned to strengthen its product line to ad- dress the needs of the customers and aims to have sales revenue of U$10 million dol- lars by the end of the current year. J.B. Park, vice-president of the Asean- India marketing and sales department of Hankook, recently visited India and told Business Line that it will sell three hundred thousand units in India in the premium seg- ment in the next three years.

Although the world is still recovering from economic crisis, Park is confident that it has not made any negative impact on the sale of premium cars in India. The company aims to tap the 23 million unit tire market in India that includes re- placement tires as well as OEM. Park was in India for the launch of ultra high perfor- mance car tires in the Kerala market, which boasts the highest number of premium cars compared with other states. Park said people in Kerala are more ex- posed to the international market and the tire information awareness among the pub- lic in this state has been found to be higher than in other places in India. “The market size for premium segment passenger car tires in Kerala is estimated at 6-7 hundred thousand per year and the company is looking at selling 16,000 tires in the first year,” said Park.

Park certainly has a positive outlook con- sidering a recent report from The Economic Times indicating slow growth for India’s tire industry over the next few months. Car sales grew 2.78 percent and truck and bus sales dropped 11 percent in May 2012, according to the Indian tire industry orga- nization ‘Automotive Tyre Manufacturers’ Association’.

Hankook pecially designs and produces tires for Indian roads and already has 50 siz- es of ISI mark tires in the market. This fig- ure will soon touch 80, thanks to its 7 global factories supplying tires to 185 countries. The tire maker also plans to increase its prices by about 5 percent in 2012 due to the higher cost of rubber. President Cho Hyun Bum said in an interview that this 5 per- cent rise will help Hankook to gain better financial reward in the current fiscal year. Hankook is not the only international seller that is increasing prices of tires this year. Companies such as Aeolus Tyre Co. have also raised prices following a 26 percent in- crease of cost of rubber in 2012.

Hankook has strategic plans for other Asian countries also. The company has an- nounced plans to launch operations at its Indonesia plant in Lippo Cikarang, Bekasi, West Java in the fourth quarter of 2012. The company poured US$353 million into con- struction of its Bekasi plant last year that is scheduled to produce 30,000 tires by the end of this year, according to Hankook’s ASEAN and India marketing and sales vice president, Jae Bum Park.

Park told The Jakarta Post that this plant will increase its output to 4 million tires in 2013 and 6 million in 2014. “The tires produced this year will be ex- ported to the United States, but from next year, our products will be sold in other countries,” said Park.

Yong Seop Hyon, Hankook’s senior man- ager for plant management, added that the company plans to continue with the next phase of the facility’s construction in Beka- si. This move is part of a total investment of US$1.1 billion until 2018 – the time when Hankook targets production of 16 million tires annually.


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