In 2022, the rapid recovery of global tire market demand has given tire companies sufficient confidence in their development. Therefore, the development layout of foreign tire enterprises this year is more active, and many tire enterprises have begun to gradually increase their production capacity layout. Recently, Hankook Tire announced that it will invest 1.6 billion US dollars (11.125 billion yuan) to increase the production capacity of its Clarksville plant in Tennessee, USA.
According to the information currently available, in October 2014, Hankook's plant in Tennessee, USA, started construction, trial production began in April 2017, and it was officially put into production in October of the same year. It is reported that the plant's annual production capacity of passenger car tires can reach 5.5 million. The expansion will not only double its production of passenger car tires and light truck tires, but also increase its production capacity for commercial truck and bus tires. It is estimated that the annual production capacity of Hankook's commercial vehicle tires will reach 1 million.
Hankook said that the total investment of Hankook in its Tennessee plant has reached 2.2 billion US dollars. The expansion of capacity investment will help Hankook to further provide high-quality tires and industry-leading services to tire dealers and consumers. , to meet the needs of the U.S. market; and to enable support for its existing and future original equipment market partners.
Judging from the current public information, the new production capacity of the Hankook plant will break ground in early 2023. Tire production in the "new phase of the factory" will begin in the fourth quarter of 2024 and is scheduled to reach full capacity by early 2026.
"The investment in our Tennessee facility is further evidence of Hankook's growing presence in the U.S. and commitment to serving customers," said Sooil Lee, CEO of Hankook Tire Technology and President of Hankook North America, "through a focus on sustainable Building and innovating manufacturing, the new phase of our Tennessee facility will provide an efficient local-to-local supply chain to meet customer needs more efficiently. In addition, we are very proud to continue to support the local economy by bringing the Clarksville area 1,200 new jobs."
Rob Williams, senior vice president of North American sales at Hankook, said: "This production expansion is an important step in our growth in the mid-duty truck market. We can better meet the needs of our growing dealer base and fleet serving North American waterways. ."
It is reported that the North American market accounts for more than 28% of Hankook's total global sales, which also explains why Hankook is so active in the layout of its US production capacity. Hankook mentioned in its 2022 semi-annual report that in the first half of 2022, due to the high demand in the North American market and the implementation of price increases, Hankook's sales performance and comprehensive revenue in the second quarter effectively increased.
In the second quarter, Hankook Tire's quarterly sales were 2,040 billion won (about 10.608 billion yuan), a year-on-year increase of 12.9% and a month-on-month increase of 13.9%. Quarterly operating profit was 175.3 billion won (about 911 million yuan), down 6.3% year-on-year and up 39% month-on-month.
In addition to the sales growth in the US market, we also noticed Hankook's confidence in the passenger car tire market of 18 inches and above. In its semi-annual report, it pointed out that sales of large-size passenger tires are critical to the growth of tire business sales - currently, passenger car tire sales of 18 inches and above account for 39.1% of its total global passenger car tire sales.
Since 2019, the proportion of tire sales of 18 inches and above has increased from 32% in 2019 to 38% in 2021, maintaining a high growth rate of 3% almost every year. In 2022, Hankook expects that the sales ratio of tires of 18 inches and above is expected to increase to 42%.
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