Tyre Makers Go Global
(Akron/Tire Review – Korean Times) Korean tyre makers are going global and setting up operations overseas – Hankook Tire is constructing a factory in Hungary, Kumho in Vietnam and Nexen in Qingdao, China.
Hankook and Kumho already have factories operating in China and so are shifting their production capacity to other countries. For Nexen, the Qingdao factory will be its first overseas factory.
Hankook hopes its Hungarian factory will serve as a beachhead into the European market.
Its factory is under construction near Budapest, the Hungarian capital, with a total investment set at US$649 million and will produce five million tyres per year when it is completed in 2008. The company plans to double the production capacity by 2010.
“The Budapest factory will mean that we are not just a Korean or Asian tyre maker but a global one,” a Hankook official was quoted as saying.
In domestic and Chinese markets, Hankook is the largest market shareholder but accounts for less than 5% in the global market.
The company wants to change this and is targeting Europe as the first step it will take to fulfill its global plan. “If we are successful in Europe, our brand image will greatly improve,” the Hankook official said, explaining that European consumers are more choosy and meticulous.
Kumho’s second overseas factory being built in Vietnam, since October last year, will be its fourth overseas factory with $155 million being invested. When it goes into production next year, it will produce 3.15 million tyres per year.
On top of this, Kumho is expected to see the completion of its factory in China in July and plans to invest $2.25 million for another factory there.
A Kumho official was quoted as saying, “Our Vietnam factory will put us into a better position for the Southeast Asian market and further west into the Middle East.”
The latecomer Nexen plans to have its Chinese factory go into production in the fourth quarter of this year, with its annual production target for 2010 set at 5.25 million tyres. Nexen wants to expand its production there to reach 20 million per year. “This factory will provide tyres for the domestic market as well as exports for other regions.”