Although quantitatively speaking, Hankook has become China's tire market leader, but the profit is less than Michelin. Recently, when Han Xitai Tire China’s new head, Li Xiu-jian, met with the media for the first time in Shanghai, he revealed that during his term of office, he plans to increase Hankook’s profits through the growth of the retail market.
According to the plan, in the next three years, Hankook Tire plans to break the total sales of replacement tires in the domestic market by more than 6 million to reach the No. 1 market above Michelin.
However, compared with Michelin who is in the first camp of tires, Hankook still has issues such as low brand gold content and weak premium ability. Li Xiu-ri, who has working experience in the mainstream markets of Hankook and Shanghai, plans to upgrade Hankook in three years. Brand premium ability enables Hankook to directly enter the first camp.
"We have also been reflecting on the past, too much focus on matching and neglected retail." Li Xiu-day said. Of the 90 million tires sold by Hankook, China sold 30 million, accounting for one-third of the total. However, from the sales point of view, the sales volume of 1.7 billion US dollars in the Chinese market accounted for only 26% of Hankook's global sales of 6.5 billion US dollars. Less than one-third of profits.
In the past three years, Hankook Tire has replaced two coaches in China. In January of this year, Hankook Tire announced the official appointment of Li Xiujin as China’s Minister responsible for China’s market strategy and day-to-day operations management. This is the latest personnel change in Hankook Tire’s recent presence in China.
Unlike the previous two positions, Li Xiu-ri has served as the principal person in all major markets around the world. Especially in the hometown of Michelin, France and the United States, he was the main person in charge of the local market.
With new heads with rich experience in various countries around the world, the most important thing to improve profits is to increase the proportion of the retail market and increase the content of high-end products. "To improve the status quo, this year we will increase the proportion of sales of high-performance products in China. For example, some high-performance tires in the autumn were originally produced only in Europe and South Korea and are now ready to be produced in China." Li Xiuri expressed that he would learn from the US market. Successful experience.
The Chinese tire market does not have very authoritative statistics. According to Hankook's own survey, Hankook currently sells 6 million pieces in the retail market, while the number one Michelin is 7 million pieces. Compared with Michelin, Hankook only needs to increase the retail volume by 1 million pieces.
Li Xiu-jen himself also admitted that the gap with Michelin is not as simple as that of 1 million vehicles. In the Chinese market, consumers naturally take Michelin, Goodyear, and Bridgestone as their first-line brands. The tire brands in the first camp are significantly higher than brands in terms of sales volume and premium price. In the second camp, Hantai, Kumho, Zhengxin and other tire brands.
"Into the first camp, not only must the market share be kept within the top ten, but more importantly, it must be within 10% of the price of similar products in the camp," said Li Xiuri.
"Michelin has its own unique advantages in the management of retailers and business chains. While we learn from them, we must also develop our own advantages." Li Xiuri said that the success of Hankook's previous matching is also its entry into the retail market. The capital, Hankook is the OEM's absolute leader, and the second place is a new 3.2 million difference.
Li Xiuyin also compared the Chinese market with the United States market. Compared with the U.S. market, the retail sales ratio is too low. There are 9 million retail sales in the U.S. market and only 3.5 million retail outlets in the OE market. In the Chinese market, there were 12.5 million retail sales in the OE market and only 6 million in the retail market. Second, 50% of Hankook's sales in the United States are high-end products, while in China, it is only about 30%, which also affects Hankook China's sales revenue and profits.
After taking up the post of the Chinese CEO, Li Xiuri urgently formulated a comprehensive breakthrough plan for Michelin. The retail market added 87 sales staff and invested more than 300 professional image stores. At the same time, in line with the high-end automotive industry, Hankook increased its support for high-end products including Audi. According to the plan, Hankook will continue to increase marketing expenses. In recent years, Hankook Tire's marketing expenses have increased by about 10%-15% annually, and last year it has reached 200 million RMB. It is expected to increase by 10% this year.
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