By Oliver Hall

Hankook have seen a surge in tyres sales during the second quarter of 2010 and are looking forward to strong continued growth.

The Korean tyres manufacturer achieved a 63% original equipment tyre sales increase during the second quarter and a 26% increase “in overall sales, year-to-year”.

According to company officials: “Increases in new vehicle sales and replacement products industry-wide contributed to these jumps but do not alone explain the achievement. Hankook continues to buck the trend and gain market share.

“In replacement tyre sales, Hankook has seen increased sales in all premium product categories, including the ultra-high performance (category).”

Soo Il Lee, Hankook Tyre America’s president, said: “We are incredibly pleased with these results.”

Seung Hwa Suh, vice chairman & CEO of Hankook Tyre, added: “Hankook Tyre continued to have robust growth in the second quarter.

“With a positive outlook, we look forward to building stronger momentum during the second half through our ongoing focus on enhancing Hankook’s brand value, increasing customer satisfaction, and expanding its OE tyre supply to premium automakers.

“These sales increases are due in part to an increased awareness for our brand in the U.S. from consumers and OE manufacturers alike. We fully expect this momentum to continue during the second half of the year.”

By Alex Kapadia

Hankook is set to be in the running as a Formula One tyres supplier of the future after bowing out of the race to secure the contract for 2011.

The South Korean tyres manufacturer had tentatively thrown its hat into the ring to supply the F1 teams with tyres in the coming seasons in a bid to increase its global awareness.

However, with Pirelli and Michelin making strong submissions to replace Bridgestone as the sports supplier, Hankook recognised its inexperience with F1 technology meant it could not put a strong enough bid together in the time required.

Despite its retreat from the race, Hankook – which has some motorsport links through rallying and sportscars – says it is considering a move to F1 in time

The company announced: “Currently we do have a little Le Mans team, and some rally teams here and there, and we try to sell some motor sports tyres.

“In the future we want to have some hefty market share in that segment. It’s quite profitable, but in order to really leverage from motor sports in terms of brands, you need to participate in either world rally championship or a very high segment in Le Mans, or Formula One.

“So in the future that’s the target that we have, to participate in those segments. And that’s going to cost a lot of money, a lot of development cost, a lot of investment, and also how to run these operations with experience.”

By Alex Kapadia

Pirelli have won the race to supply Formula One with tyres from the start of the next season, according to Italian media sources.

The Italian tyres manufacturer will be the sports sole tyre supplier from 2011, taking over from Bridgestone who are exiting F1 when their contract runs out at the end of the current season.

According to Autosprint and Italiaracing, Pirelli has been selected by the teams and F1 chief executive Bernie Ecclestone, beating rivals Michelin, Avon, Kumho and Hankook to win the contract.

Earlier this week Ferrari president Luca di Montezemolo was asked to name is preference. He said: “As an Italian I prefer Pirelli, but experience tells me Michelin.

“In the end it will be the same for everyone,” he said in an interview with La Gazzetta dello Sport.

Autosprint said Pirelli will be paid 1 million euros per team per season in 2011, 2012 and 2013, in exchange for identical attention and service and a range of just three compounds: soft, medium and hard.

According to the website Motorsport.com, the tyres will initially be in a similar 13-inch specification to the current Bridgestone product, with a longer-term ambition being a move to a low profile.

The decision is set to be confirmed shortly by the World Motor Sport Council.

By Denna Bowman

Hankook tyres have announced a surge in first-quarter net profit in the wake of strong sales due to an upturn in the global auto market.

South Korea’s largest tyres manufacturer posted a net profit of 138.1 billion won (£780 million) in the three months ended March 31, compared with a profit of 2.8 billion won for the same period a year earlier.

Seo Seung-hwa, chief executive of Hankook, said: “Last year, Hankook Tyre has amazed its competitors with an unprecedented business achievement despite economic difficulties.”

He added: “The result is a good sign suggesting we will see sustainable growth this year.”

First-quarter operating profit also jumped to 119.9 billion won from 43.5 billion won a year ago, according to the filing.

Sales rose 25.6 percent from a year ago to 778.5 billion won.

The news coincides with reports that Hankook is also set to build a new plant in China.

Heo Ki-yeol, head of Hankook Tyre China, told South Korean press that “Expansion of production capacity is a must to increase our share in the fast-growing market.

“To meet the growing demand here, we started to equip one of our existing factories with additional facilities, and are now considering building a new one.”

Fears that Formula One could be left without of tyres supplier for 2011 have been brushed aside by the boss of the Williams team

Sir Frank Williams has said that although Bridgestone will not renew its tyres supply contract at the end of the season there are options on the table which are still open for discussion.

Finding a replacement was at the top of the agenda at the Formula One Team Association’s (FOTA) meeting in Malaysia.

Among the candidates is Michelin, which could return to F1 in competition with Korean manufacturers Kumho or Hankook. However, the French manufacturer is only believed to be interested in a deal if the teams pay for the tyres and the regulations are changed to allow low-profile tyres on 18-inch rims.

Williams told Motorline: “There will be tyres. The question is whether we get them for free or whether we have to pay. There have already been talks. Some of the companies have developed Formula One tyres in the past, others have not.”

The F1 boss also added that re-igniting the tyre war would be an “expensive” route for the sport.

Meanwhile, Mercedes team boss Ross Brawn said he is not automatically opposed to the idea of changing the current rules.

He said: “If a tyre manufacturer wants to be in Formula One, we have to consider their objectives and try to meet them up with the objectives of the teams.”

Alex Kapadia, Opertions Team

By Alex Kapadia

Hankook tyres bucked the industry trend during 2009 and saw sales soar to record heights, according to company executives.

While most of the world’s largest tyres manufacturers have reported lower sales during last year, the Korean company boomed.

Focusing on North America, the company reported that in spite of the economic recession and dramatic decline in new car sales, its tyre sales grew 8.3 percent to $844.3 million.

Soo Il Lee, one of the company’s top executives, said their US-based subsidiary anticipates the trend will continue, with sales expected to exceed $900 million in 2010 and reach $1 billion in 2011, Mr. Lee said.

Broken down, Hankook’s North American passenger tyre sales rose 5.3 percent last year to $575.2 million, while light truck tyre sales grew 26.2 percent to $159 million. Truck tyre sales improved 2.2 percent to $110.1 million.

Mr. Lee attributed the company’s success to the partnerships it has forged with its dealer network and stressed that even in the slow economy Hankook’s mission and focus remains the same: to “deliver market-driven, high-quality products that provide exceptional value for the consumer and a profitable, competitive edge to our dealers.”

Hankook also was helped in the past year by “a kind of trading down,” he said, as many consumers moved away from expensive tyres to more reasonably priced ones with good quality.

Todd Hershberger, senior vice president of sales and marketing, added: “What consumers are really looking for is value and that’s really what’s helped us in a difficult economy. That’s what we represen - a great quality product.”

Formula One bosses are reportedly working hard to convince Bridgestone to stay on as the sports official tyres supplier beyond this year.

The Japanese tyres manufacturer had announced its intention to withdraw from the sport at the end of this season for cost-cutting reasons.

Since then Korean tyre makers Kumho and Hankook have been mooted as possible replacement suppliers, but the latest report in Spain’s El Mundo Deportivo claims that they are not serious contenders.

While a Michelin spokesman said recently it “might consider” returning to F1 if the rules are further amended to demonstrate the tyres’ role in “fuel saving and C02 reductions”.

In the meantime, the teams are reported to be “very concerned” about the tyre situation for 2011, and El Mundo reports that about reducing Bridgestone’s necessary expenditure - currently around £48 million a year - are taking place.

The rules for 2010 have already been amended so that 11 sets of tyres rather than 14 are available to each driver per event.

The Japanese supplier has been continuously involved in F1 since 1997 and the official sole supplier between 2008-2010.

Alex Kapadia, Operations Team

By Alex Kapadia

Hankook tyres are looking forward to a successful year ahead, gaining global market share after hitting record sales in 2009.

Soo Il Lee, president of the tyres company, reflected on last year’s growth and shared Hankook’s goals for the coming year with attendees at a dealer meeting last week.

He told the gathering: “Hankook Tyre announced its 2009 global sales, hitting a record high of over $3.9 billion dollars.

“This means Hankook has practically doubled its global sales in just the last five years. This remarkable growth is consistent with our plan to be one of the world’s top five tyre companies by 2014.

“In North America – in spite of the dramatic decrease in new car sales and the economic recession – Hankook’s total tyre sales were up 8%, topping $840 million dollars for the first time.”

By continuing to make investments in research and development, manufacturing efficiencies, capacity expansion, and marketing programs, Hankook plans to continue its ambitious growth strategy.

Congratulations to Hankook for rolling the 10 millionth tyre off the production line at its Hungarian factory.

The South Korean tyres manufacturer has ambitious plans for the future and has set its sights on establishing itself as a world leader in the tyres industry.

It has already calculated it is now the seventh largest tyres manufacturer in the world and the sixth largest in Europe in terms of unit sales.

The ‘Anniversary” tyre, the Ventus V12 evo, the 10 millionth tyre to come out of the heating mould at the Rácalmás plant, was particularly apt because the market for UHP and environmentally friendly tyres have reportedly shown particularly strong growth in Europe.

Jin-Wook Choi, executive vice-president and COO of Hankook in Europe, said: “The demand for our tyres has been growing steadily and dynamically all over Europe.

“This has allowed our European plant to roll its 10 millionth tyre off the production earlier than expected. Consequently, we are investing further 230 million euros into the expansion of the plant to enable the production of 10 million tyres a year or more than 30,000 tyres a day from 2012.”

Hankook is already committed to researching and developing tyres specifically to meet future needs of the European markets.

Denna Bowman, Head Office

By Alex Kapadia

Hankook is considering increasing the price of its tyres around the world, according to a Bloomberg report.

South Korea’s biggest tyres manufacturer blames the rising cost of raw materials for the possible price hike.

The Seoul-based company has already raised prices in the US due to the higher commodity costs.

Yii Seong Ha, a spokesman for Hankook, told the financial news organisation: “We’re considering raising prices in other regions.

“The timing and size of increase may differ region by region, but a price increase seems inevitable after raw material costs including natural rubber climbed.”

The market reacted positively to the news and Hankook climbed 4.1 percent at the close of the Korea Exchange.

Kim Byung Kuk, an analyst at Daishin Securities, said speculation that the company may raise prices in Europe and other markets boosted shares.

Kim Yong Soo, another analyst at SK Securities, added: “The company will be able to raise prices by 8 percent, on average, in 2010, and the first increase may come soon in the first quarter.

“The price increase may not fully cover the increase in raw material costs, but strong global demand for cheaper tyres such as Hankook’s should limit the impact.”