The Hungarian Tire Association (HTA) was founded in 2011 with the participation of seven international tire manufacturing companies with production capacity and representation in Hungary. In our interview series, we speak to the leaders of the member companies. This time, Mr. Min Sung Won, managing director of Hankook Tire Budapest Kft., answered our questions. According to him, quality, a well-positioned B-brand and continuous R&D can be the antidote to the advance of Chinese brands. What do tires specially designed for electric vehicles know, where is the Rácalmás factory’s place within the structure and what is their social responsibility program about? – We discussed these topics too.
What’s Hankook’s balance sheet for the year so far?
In the second quarter of 2024, Hankook increased both its revenue and operating profit. Revenue reached 2,317.8 billion KRW (approximately 1,570.4 million EUR), marking a 2.4% increase compared to the same period last year, while operating profit rose by 69.2% to 420 billion KRW (approximately 284.5 million EUR). Despite high inflation and interest rates, the company experienced growth, thanks to its premium brand strategy, investments in research and development, and tires specialized for electric vehicles. The growth was driven by the focus on premium branding, particularly on tires for electric and high-performance vehicles. Tires sized 18 inches or larger accounted for 46.3% of revenue, with a significant portion sold in China. The company also expanded its partnerships, including with leading car and electric vehicle manufacturers. Hankook supplies several premium car brands, including Audi, BMW, Mercedes-Benz, Porsche, as well as electric car manufacturers like BYD and Tesla. Notable achievements were made with the iON tires developed for electric vehicles. Additionally, Hankook is the official supplier for the Formula E World Championship and is actively increasing its marketing efforts to strengthen its premium positioning.
Mr. Min Sung Won, managing director of Hankook Tire Budapest Kft.
We recently published ETRMA’s latest market report*, which shows quite clearly that Chinese manufacturers are pushing ahead. What is Hankook’s strategy in this respect?
Our strategy to strengthen Hankook’s position, especially in response to increased competition from Chinese manufacturers, includes leveraging our second brand, Laufenn. Laufenn tires are produced using proven Hankook technologies, ensuring the same high level of quality. Furthermore, many Laufenn products are manufactured at our Hungarian plant, making them less vulnerable to external factors like the volatility of sea freight costs. This results in a more stable supply process. In contrast, Chinese brands face greater challenges in managing their logistics due to the dependency on sea transport, which is often subject to scheduling issues and fluctuating prices. These external factors can affect the competitiveness of their products. Hankook’s approach, by relying on both premium and value-oriented brands, positions us well to mitigate these challenges and continue delivering high-quality products to our customers.
Could you tell us something about your R&D work? What are the main trends and directions?
Hankook Tire’s research and development activities are pivotal to the company’s growth both globally and in Hungary, with a strong emphasis on innovative materials and technologies that enhance tire performance, safety, and sustainability. Key industry trends include increasing environmental awareness and the integration of green technologies, such as developing fuel-efficient tires that help reduce vehicle carbon emissions. Digital solutions are also a major focus, including smart tires that continuously monitor vehicle performance and condition. Additionally, the Hankook iON tire, specifically designed for electric and hybrid vehicles, extends driving range, reduces rolling resistance, and delivers low noise levels alongside enhanced traction, ensuring a safer and more enjoyable driving experience.
How is the truck and bus tire manufacturing investment progressing in Rácalmás?
The expansion of the Rácalmás plant, announced in November 2023, is a significant milestone in Hankook’s presence in Europe. Hankook Tire currently supplies the European truck tire market mainly from its Korean and Chinese factories, but the new plant in Hungary will allow Hankook Tire to get closer to the market and partners and reduce logistics costs and delivery times. The investment is therefore an important step in Hankook Tire’s long-term strategy and will contribute significantly to the development of future mobility.
How does the Hungarian plant fit into Hankook’s global structure?
The Rácalmás plant is an integral part of Hankook’s global manufacturing network. The Hungarian factory not only plays an important role in serving the European market, but also contributes to the company’s global production capacity. Hungary’s strategic location enables the development of an efficient logistics network, and thanks to its central role, the company can quickly supply to European customers. The Rácalmás facility is also one of our most technologically advanced plants, where the latest manufacturing processes and sustainability solutions are applied.
Please say a few words about your company’s corporate social responsibility programs
It’s worth highlighting that our factory in Rácalmás, Hankook Tire Hungary is not only focused on manufacturing but is also active in the field of corporate social responsibility. Through programs such as the Tire Donation Program, which enhances the mobility of nonprofit organizations, or the Employee Volunteer Program, which encourages local community involvement of employees, they support local communities. The Education Support Program further contributes to raising educational standards in local schools.