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Date 04/06/2006 Hits65,251

Category Corporate

Hankook Tire to Defend Leading Position in Chinese Tire Market

Hankook Tire to Defend Leading Position in Chinese Tire Market

■ New R&D center, expanded production facilities in Jiaxing
■ New R&D center to spearhead efforts to produce lineup optimized for Chinese
   market and support OE operations
■ Expanded plant 3 is fully automated for uniform quality and reduced
   manufacturing costs
■ No. 1 market share for passenger car tires in China, to extend retail network
   for superior tires

Hankook Tire (, CEO Cho Choong-hwan) is stepping up efforts to defend its leading position in the Chinese tire market by investing in a new local R&D center, extending production facilities and expanding its sales network. The company announced detailed plans for China its Jiaxing plant on the 29th.

Hankook Tire recently completed the expansion of its production facilities in Jiaxing for annual capacity of 2.5 million units. As the main production base for the company in China, the Jiaxing plant will undergo further expansion works in the latter half of this year. Once completed by the end of 2006, Hankook Tire will secure total production capacity of 28 million units per year from its Jiaxing and Jiangsu plants in China.

The plans are in response to increasing competition in the Chinese market, with recent moves by global tire makers including Bridgestone and Michelin to dramatically increase their local manufacturing facilities.

The newly expanded Jiaxing plant 3 is characterized by its horizontal facility technology, a change from the previous vertically-inclined processing arrangement. Head of Hankook Tire Jiaxing plant Park Joong-hwa said, “This facility technology is not only advantageous in terms of logistics because it minimizes the distance between each process, but it will also be very helpful in reducing the costs and schedules of future expansion works.” Park added, “The fully automated facility also ensures uniform quality and drastically reduced manufacturing costs.”

Products manufactured at the expanded Jiaxing plant are to be supplied to local Chinese branches of automakers such as GM and the overseas market. The list of 30 local customers include Shanghai GM, FAW Volkswagen, Nanjing Fiat and Beijing Hyundai. Hankook Tire is currently the number one OE supplier in China.

The Chinese arm of Hanook Tire also recently opened its new R&D center. The center is located on a 43,000 square meter plot near the Jiaxing plant. The company plans to use the center to develop products optimized for the Chinese market and provide OE to global automakers inside China. Employing 90 employees, the center brought in some 70 varieties of the latest testing equipment last week including tire test machines, spectrographs, and fatigue test machines.

Hankook Tire commanded the no.1 spot or 25.2%of the Chinese passenger car tire market as of the end of last year. With plans to further expand facilities, the company aims to increase its market share in the overall tire market. In addition, by extending its retail distribution channels for high performance tires, the company will aggressively pursue new distribution channels into the Chinese west.

Competition is heated inside the Chinese market with all the major players including Michelin, Bridgestone and Goodyear having a local presence.

In 2003, just four years since the start of operations at the Chinese plant, Hankook Tire emerged as no.1 in market share for passenger car tires, beating global peers such as Michelin and Goodyear. In 2005, the company’s Chinese operations recorded USD 560 million dollars in sales and 78 million dollars in operating profits.


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