Hyundai Motor splits with Hankook Tire
Hyundai Motor has long had a loyal relationship with Hankook Tire, the leading tire manufacturer in Korea. But the automaker is gradually parting ways with its longtime supplier and linking up with foreign tire brands, vying for an image upgrade as well as quality enhancement.
Last December, Hyundai Motor tapped Michelin and Continental for tires for its Genesis’ EQ900 model, a high-end vehicle that cost more than 70 million won.
Hankook Tire provided tires for the first- and second-generation models of Equus [a former name for Genesis], which launched in 1999 and 2009.
The automaker said it wanted to enhance its image to a more high-end one by courting imports.
Since then, a slew of Hyundai’s new cars have sported imported tires.
The hybrid version of Ioniq that launched in January had Michelin tires. “Domestically made tires have high quality,” a Hyundai Motor official said at the time. “But for ecofriendly vehicles, tires play a vital role. We equipped Michelin products in which the quality and fuel efficiency have been already guaranteed.”
The newest Grandeur IG also boasted Michelin tires. It was the first time Grandeur, which has been a representative homegrown luxury sedan for 30 years, carried import tires.
About 30 percent of Hankook Tire’s revenue comes from supplying newly launched cars and 30 to 40 percent of that revenue is generated from Hyundai Motor and Kia Motors’ vehicles.
Not only does it means Hankook is losing clients but it also means it also is losing expensive ones such as Genesis and Grandeur.
Industry insiders point to 2013 to explain why the two companies are going their separate ways.
When Hyundai Motor released Genesis DH in 2013, there were complaints that the car generated a lot of noise. Hyundai Motor pointed to Hankook Tire products as the main reason. It said the unbalanced tire structure wore out only one side of the product which ultimately led to higher vibrations and more noise.
As a solution, Hyundai Motor changed the tires on the Genesis model last year including the sold models that reportedly cost more than 70 billion won. Since then, the Genesis brand has carried Continental tires.
Hankook may have been hit hard by losing major models as clients, but it is partnering with new import car brands. Currently, it is a supplier for BMW’s seven series models, Mercedes-Benz’ S-class models and Porsche’s Macan model.
“Hyundai Motor and Kia Motors are still important clients to us,” said a Hankook spokesperson.
“We are going to maintain the partner relationship in the future as well.”