Hankook eyes US production boost to offset tariff risk
Hankook & Company Chairman Cho Hyun-bum on Wednesday highlighted the need to bolster US production of automotive batteries and tires as a strategic response to the 25 percent tariff imposition on automobiles and parts by US President Donald Trump.
'We are closely monitoring the Trump administration's economic and trade policies and formulating various proactive measures,' stated Cho. 'As a company with key national technologies, we are prioritizing the swift execution of strategies to contribute to strengthening national competitiveness.' This marks his first public message urging the company to effectively implement global strategies amid the growing uncertainties in the automotive industry.
This was also one of the key agendas during Hankook & Co.'s series of meetings over the past month, which included innovating management structures and devising regional strategies at its headquarters in Pangyo, Gyeonggi Province. The company addressed several initiatives, including launching Hankook batteries on full scale for the North American market, expanding premium lineups targeting the SUV and electric vehicle markets and strengthening technological and price competitiveness.
In particular, Hankook & Co. plans to aggressively target the North American market this year, leveraging its lead-acid battery business. Lead-acid batteries supply power to electronic equipment within both internal combustion engine cars and EVs. With the expansion of its Tennessee plant, the company will more than double the annual production capacity of 1.5 million units and ramp up production of premium AGM batteries to 5 million units by 2030.
By expanding its Tennessee plant in the US, the company will more than double its annual production capacity of 1.5 million units and boost the production of premium Absorbent Glass Mat batteries -- primarily used for autonomous stop-and-go systems and hybrid powertrains -- to 5 million units by 2030. Last year, lead-acid battery products accounted for approximately 70 percent of the company's total sales, driving record-high performance.
Hankook & Co. underscored that its proactive US expansion since 2018 has enabled a flexible response to the US protectionist tariff policies in the first half of this year. Currently, its export volume to North America has increased by 20 percent from the previous year.
For automotive tires, it aims to optimize product portfolio, centering on high-performance tires such as the ION, which is designed for EVs, as the global automotive industry is shifting toward electrification and large-sized SUVs. Amid tariff threats from the US, the company also seeks to increase its Tennessee plant's tire production capacity by more than twofold from 5.5 million to 12 million units this year.
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US President Donald Trump's tariffs -- especially the ultra-high 'reciprocal" tariffs that he says will be reintroduced on July 9 for any country that has not struck a trade deal with his administration -- have sent countries around the world scrambling to respond, adapt, and limit the fallout. ASEAN's ten members -- Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam -- have been among the most proactive. Their leaders quickly recognized that, after decades of spectacular gross domestic product growth, ASEAN is an economic force that the Trump administration would have to reckon with in a serious way. In 2000, Japan was the world's second-largest economy by GDP, some eight times larger than ASEAN; today, it is only 1.1 times larger, and by 2030, ASEAN's economy will overtake it. In 2010-20, ASEAN contributed more to global economic growth than the European Union did. ASEAN owes much of this progress to open trade. Between 2003 and 2023, its trade with the rest of the world exploded, from $618 billion to $2.8 trillion. ASEAN's leaders have upheld relative peace and stability in their countries, while cultivating a culture of consultation and consensus in guiding regional relations. This stands in stark contrast to the experiences of many other developing countries and regions. Just a few weeks ago, neighboring India and Pakistan narrowly avoided full-scale war. The Middle East remains gripped by instability and violence, with Israel winning wars and losing the peace. The leaders of Latin America's two largest economies, Brazil and Argentina, are barely on speaking terms. After 48 years of regular ASEAN meetings -- with over 1,000 ministerial and lower-level meetings taking place annually -- constructive engagement is a deeply ingrained habit in the region. To be sure, ASEAN is often accused of lowest-common-denominator cooperation. 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