Hankook Drops Plans for Run-Flat Line at Hungary Plant

Hankook has cancelled plans to include run-flat production in the current phase of expansion at the company's Racalmas, Hungary tyre manufacturing plant. Despite announcing that the company would include run-flat tyre production in this round of expansion as recently as 9 September, executive vice-president and COO of Hankook Tire Jin-Wook Choi told Tyres & Accessories/tyrepress.com that the company is now prioritising standard tyre production due to demand continuing to outstrip supply in Europe, particularly in terms of UHP sizes. Hankook Tire Europe managers conceded that the decision will result in cost savings and that this was a consideration in the discussions leading up to the decision, however they also pointed out that the company is on course to invest as much as 10 per cent more than the 500 million euros initially earmarked for the total project. The current second phase of construction at the Racalmas site, which started production in 2007, will see the company double current capacity from 5 to 10 million passenger car tyres annually over the next 18 months at a cost of around 230 million euros.

Following the completion of the phase two expansion in around 18 months time, Jin-Wook Choi confirmed that the company is already planning a third phase. Hankook’s huge plot at its ultra-modern Racalmas site certainly has room for further expansion, with land roughly the size of the company’s current phase one and two production currently lying vacant. What the company will do with this space in the third phase of expansion is less clear. Bearing in mind the strong demand for its products Hankook is currently reporting, the most likely options at this stage appear to be for the company to add further passenger tyre or truck and bus tyre production capacity. However, there was also talk of building a test track adjacent to the production plant.

Hankook experiences rapid growth in 2009

Hankook’s European factory expansion plans, which are already underway, are set against a background of strong growth across Europe this year. Speaking during a tour of the Racalmas plant, European PR manager, Felix Kinzer, announced that the company now calculates that it is the seventh largest tyre maker in the world in terms of units sales and not far from sixth. Tyres & Accessories’ own data, which calculates the rankings based on the value of sales using the euro as the control currency, puts the company in eighth. Algebraical differences aside, the point is that Hankook is gaining ground on its competitors, something that is even clearer when you look at Hankook’s take on the current European leaderboard. This calculation puts Hankook in sixth place in Europe with a 7 per cent market share, snapping at the heels of fifth-placed Pirelli with 8 per cent. When you consider the rapid growth rates Hankook’ sales are currently experiencing, the company’s arguably ambitious calculations deserve further attention.

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