There has been an increase in demand for high-end tires in China The company is working to develop the best tire possible to meet the requirements, said Byung Il Woo, vice-president of Hankook Tire Co's Global OE Division on 21 April.
Vehicle owners in China expect tires to perform on many levels. A few years ago, most customers wanted tires to have a longer life. Now, many want tires to provide a comfortable drive and also reduce noise pollution. But the common thread that runs across all regions in the country is energy consumption. Vehicle owners do not want tires to increase their gasoline bill.
"Therefore, our products are designed not only to lower oil consumption, but are also aimed at satisfying other requirements of customers, including offering better performance," said Woo.
Woo said the company is working on two fronts to make inroads into the passenger car market. First, building brand awareness. Second, creating distribution channels.
Hankook manufactures tires for high-end modelsI, including Mercedes-Benz S-Class, E-Class and BMW 5-Series. The company is expanding its distribution channel to provide customers easy acces to its products.
"Last year, we opened 700 exclusive outlets to sell passenger car tires. Our target is to inaugurate 800 more stores this year," said Woo.
Hankook plans to have more than 3,000 total outlets by the end of this year. In the next four years, the figure will be 5,500 to 6,000, according to Hankook's Vice-President of Marketing Strategy Kim Yun Young.
The tire maker's revenue grew 15 % over last year in China. In 2013, the inventory level of passenger car tires fell 30 % compared to 2012.
Hankook reported 11.1 billion yuan (USD 1.78 billion) revenue in China in 2013, while its global revenue touched USD 6.45 billion, and the profits reached USD 940 million. Its total tire output was 31 million units, and it exported 10 million units.