Sergio Álvarez
Commercial Director of Hankook Tire de México
Hankook Tire
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View from the Top

Success Spurs New Projects

Sat, 09/01/2018 - 11:31

Q: What strategies have you implemented to strengthen your presence in the original equipment market?
A: We opened a new distribution center in Monterrey in May 2017, which has increased Hankook’s presence considerably in the north of the country, particularly in Nuevo Leon, Tamaulipas, Coahuila, Chihuahua, Sonora and part of San Luis Potosi. This new facility has been beneficial mainly for our aftermarket operations, allowing us to store between 60,000 and 80,000 tires, but it has also helped us supply Kia’s and Chrysler’s plants and develop new distributors.
We have another distribution center in Queretaro that caters to the center, south and southeast of the country. This is our main facility in Mexico with a storage capacity for approximately 180,000 to 200,000 tires. This center supports our operations in the light and heavy-vehicle segments for both original equipment and the aftermarket. Together, Queretaro and Monterrey cover most of the country and the next step for the brand is to target the region of Baja California, Baja California Sur, Sonora and Sinaloa, as well as the Yucatan Peninsula.
Q: What are your priorities for this market in both the light and heavy-vehicle segments?
A: We have an aggressive growth strategy in original equipment for both the light and the heavy-vehicle segments. We have already approached trailer manufacturers and distributors and our distribution center has been a great advantage to assure these companies that we have the capacity to supply their operations. We already have a key account with a trailer manufacturer in the north of the country, which will also help us grow our presence further. Additionally, we opened a distribution center in Puebla solely dedicated to supply Volkswagen and Audi. We do not discard the possibility that this center might one day also support our aftermarket operations in this region but currently, our priority for this center is the original equipment sector.
Q: How has the growing manufacturing presence of Kia and Hyundai helped you build your position among other OEMs?
A: Kia is a South Korean company like Hankook and has helped us grow our presence in the country, mainly following its own increment in sales. Having said that, we continue our work with other brands such as Ford, Chrysler, Chevrolet and Volkswagen and we also have incoming projects with Nissan and BMW at its new facility in San Luis Potosi. Our goal is for one out of every 10 vehicles manufactured in Mexico to leave the plant with Hankook tires and we have almost reached that target. We are strengthening our partnerships with OEMs and we are participating in the volume and premium segments.
Q: How can you grow your presence in the heavy-vehicle segment beyond the aftermarket?
A: The heavy-vehicle segment is highly specialized and companies’ priorities can be narrowed to two key elements: save fuel and reduce tire replacements, thus reducing cost per kilometer. Although low-priced products are still present in this market, the trend has been to limit this offering. The Mexican market has become much more mature and Hankook has built a portfolio that favors innovation and safety above everything else. In this segment we are already working with fleets such as Grupo Toluca, Tres Guerras, Autolíneas Regiomontanas and Servicios CAD and we have seen double-digit growth in recent years for our Hankook and Aurora brands.
Q: As a South Korean company, what challenges or opportunities do you see to maintain your growth in Mexico?
A: We have seen great support for Korean companies, especially after the arrival of Kia and Hyundai, and there are even talks about a potential trade agreement between Mexico and South Korea. For companies such as Hankook to remain successful, these strategies must continue. Korean investment in Mexico is growing and we expect that a treaty between the two countries will open new opportunities to reduce costs and optimize operations. So far, our growth expectations as a company and as part of the Korean investment front are positive for the foreseeable future.