Hankook expects record European results in 2022
Interview: Hankook Europe’s senior management talk technology, sensors and sustainability
During the recent Tire Cologne event, Tyres & Accessories met with Hankook Europe’s top management including president and chief operating officer Sanghoon Lee; Dietmar Olbrich, vice president of marketing and sales at Hankook Germany; Byung Ryong Lee, vice president of marketing strategy in Europe; Guy Heywood, vice president sales, marketing and business strategy for truck and bus tyres in Europe; vice president of European Technical Centre, Klaus Krause; Massimo Cialone, chief specialist for compounding and materials.
Our meeting came in the light of the launch of Hankook’s iON tyre range as well as the news that Vaculug has been prolonged as the company’s UK retreading partner. It was also set against the backdrop of an unprecedented combination of international and global industry-wide challenges such as the knock-on effects of the war in Ukraine, spiralling shipping costs, carbon black shortages and more – so, our conversation was wide-ranging in its remit. But the unmistakeable focus was that Hankook is continuing via a particular focus on advancing with the cutting-edge technology of today, while also preparing for the developments of the future.
Whether we are talking about electric car tyres or electric truck tyres, the fundamental differences between them and their internal combustion engine-focused (ICE) counterparts are broadly the same. Electric vehicles are significantly heavily and have high torque requirements – demands that come along with ongoing needs for quality grip and fuel consumption properties as well as good overall mileage performance. As a result, electric vehicle tyres need better load carrying and higher torque performance – all without the compromising other performance characteristics. Were Hankook’s tyres to be fitted to ICE vehicles, there would be no disadvantage. But in contrast, Hankook argues, the same logic doesn’t work the other way around as some of the South Korean firm’s competitors have suggested.
Much has been said about the transition from ICE to electric vehicles (EV) in the passenger car side of things. But when it comes to commercial vehicles, the ship is likely to turn more slowly than the car side of things. When it does, it is likely to be a phased transition, with the representatives of Hankook suggesting that the commercial vehicle segment will transition from a local, specialist basis to a national truck basis. In other words, urban bus and refuse vehicles are likely to transition to electric propulsion first, followed by the broader truck market after that. The whole process could take a couple of decades, but it has no-one can deny that it has already begun and has already had a clear impact on tyre design, sales and marketing.
As Hankook Europe’s management pointed out, at the moment a lot of emphasis is being put on battery electric-based propulsion, but – while this is clearly an important trend – it is not entirely clear that battery electric is the best long-term solution. However, in any case, forward-thinking tyre companies need to be ready for any eventuality. The technical complexity of both Hankook’s products and its range is therefore always increasing, the company’s European executives agreed. Indeed, the panel characterised Hankook as a leading manufacturer in this respect.
Hankook always invests heavily in research and development and technology. And this is reflected in the growth of Hankook’s position in the original equipment market in a relatively short period of time. Hankook is a pace-setter in that respect – something’s Tesla’s OE supply attest to. Hankook already supplies tyres to two models and a third is said to be in the offing. To put that into context, the levels of performance demanded by the arguably world’s best-known electric vehicle maker are only achieved by global top five tyremakers and Hankook is part of that OE supply list.
Indeed, TÜV have tested Hankook’s iON tyres against the market’s premium models and found that that the iON won-out overall. Specifically, the Hankook tyre was said to have been best in the wet grip and rolling resistance comparisons, with no particular disadvantages compared to its competitors. Therefore, Hankook executives describe the tyre as a “no-compromise” product. Indeed, since Hankook’s tyre is AA graded and also sits in the top band for current pass-by noise measurements on the European tyre label, Hankook calls the iON tyre a triple A product.
European battery electric vehicle sales were set to be up around 15 per cent in full-year 2021 figures at of the time of our conversation at Tire Cologne. However, the trend is still going up and the growth rate could reach as much as 20 per cent in no time at all. Moving forward, the electric vehicle marketplace transition is coupled with the move towards further strides towards autonomous driving. And greater autonomy means more data. That’s where smart, sensor-bearing tyres come in, offering information that aides both autonomous vehicle and heavily ADAS-equipped EVs in general.
Hankook’s sensor solution is being developed with partners based on a bespoke sensor design. The casing housing for the sensor is the same as some that are being used by other tyre manufacturers, but the chip and its on-board know-how come from Hankook.
Continuing the subject of sensors, T&A asked for Hankook’s view on the use of technology such as RFID, which has particular practical applications in the field of truck tyres and especially retreading. The answer? “RFID will be the norm soon”, according to the Hankook Senior executives, in the truck tyre world at least.
And with new tyre technology accelerating at a rate of knots in the new tyre side of things, retreading operations will also have to invest in their production process in the years to come in order to handle the latest technologies, something that is likely to result in investments in more powerful presses capable of remoulding the kinds of 3D tread designs evident on the latest truck tyres. Similarly, additional manufacturing investment will be required in order to keep pace with 3D printed moulds.
Speaking of truck tyre manufacturing investment, Hankook has the land necessary for a truck tyre production operation alongside its existing Hungary car tyre plant. How far along are plans for that? “I would be astonished if we [Hankook] are not producing truck tyres in Europe in 10 years’ time”, Heywood answered. In other words, there are medium- to long-term plans in place for that, but it is too early to be specific.
In the interim, Hankook Europe has general plans to capitalise on demand trends towards EV, UHP, winter and all-season tyres with products like the Winter i*cept range. Such trends and their associated strategies are relatively consistent across Europe, with some exceptions. For example, while all-season tyre sales are on the up, winter tyre sales have never generated large volumes in the UK passenger car tyre segment. Here, the already-significant high-inch sector is of increased importance.
On the truck tyre side of things, in the UK there is typically more urban and regional tyre demand than the broader European demand for high mileage tyres. That’s why there are said to be moves afoot for a new generation of mileage/regional crossover truck tyres that are set to be introduced across the continent later in 2022. Indeed, that move is said to be part of wider range renewal programme that is taking place over the next 12 to 18 months and is a Europe-wide strategy.
Sustainability and recovered carbon black
At the same time that great technological strides are been taken forward with tyre sensor and electric vehicle technology, Hankook is also taking a second look at how it works on the ground floor, so to speak, with raw materials. The combination of a global sustainability emphasis and problems with the supply of carbon black caused by the ongoing war in Ukraine and the associated sanctions against Russia have highlighted the importance of diversifying sourcing of carbon black and indeed away from reliance on virgin carbon black in tyres. This has led some tyremakers to re-double their efforts to integrate recovered carbon black into their tyres. In case of Hankook, the approval of recovered carbon black started much earlier than the Ukraine crisis and has been a part of Hankook’s sustainability strategy even before.
Hankook has, for its part, already been using recovered carbon black (RCB) for some time. This began in earnest in 2015 when Hankook raw materials specialists evaluated with recovered Carbon Black producers which grades of RCB can be used in its tyres. Indeed, Hankook’s executives report that they are already using RCB – branded as green CB – in South Korea. This product, executives report, comes from pyrolysis of end-of-life tyres and therefore can be described as “100 per cent renewable product.”
As far as the European market is concerned, the Hankook executives told Tyres & Accessories that they are now approving RCB for use in the company’s Hungary new tyre manufacturing operation. This RCB, they explained, comes from a “long-term sustainability project” and is therefore similarly green in nature. The company is intensively active in the development of sustainable carbon black, as recovered carbon black cannot replace all the grades of traditional carbon blacks. Furthermore, the tyre maker is also involved in the improvement of the existing recovered carbon black properties. Hankook’s bigger challenge appears to be sourcing enough high quality RCB to be used in its Hungary-produced tyres – in many ways, a good problem to have as far as the company’s green credentials are concerned.
Whatever is happening in Europe, Hankook has significant capacity elsewhere in the world. Of course, this means South Korea, but also 30 million units a year of car tyre production capacity in China as well as another 2.4 million units of truck tyre capacity in the People’s Republic. 70 per cent of this is sold domestically, while 30 per cent is exported. And what’s more, the in-land location of Hankook’s Chinese production capacity means that it has felt far less of the impact of the Covid-19 pandemic and related restrictions than those manufacturing on China’s Eastern seaboard. In fact, executives said output was “close to normal production levels”. When it comes to exporting tyres from China, shipping costs and bottlenecks at ports have been somewhat more challenging.
Overall demand for Hankook’s products continues to exceed supply, which in many ways, is another good problem to have. However, with shipping prices and bottlenecks easing, Hankook’s senior executives expect record results in 2022 across both its car and truck tyre operations as result of its emphasis on technology, sustainability and targeted product development.