South Korea’s largest tire maker plans a $800 million investment for its first factory in the U.S. as carmakers stay on track for a fifth straight year of growth and the market shows great signs of improvement.
The new production facility would be constructed in the state of Tennessee, with an installed annual production capacity of 11 million tires, according to a statement issued by the Seoul-based company. The new plant is Hankook’s eighth manufacturing location globally and is scheduled to start tire manufacturing in 2016, the company also said.
“With this newest manufacturing facility in place, we will be able to supply the highest quality tire products that meet fast growing demands from consumers and automakers in the United States,” Hankook Tire Chief Executive Officer Suh Seung Hwa said in the statement.
“The new plant signals that the company is planning to produce more premium tires and shows its confidence in its brand and products,” said Shin Chung Kwan, an analyst at KB Investment & Securities Co. “The additional capacity will help Hankook Tire produce more than 100 million units, and help secure and develop the company’s position in the U.S. market.”
Hankook, a usual supplier to Hyundai and Kia, currently churns out around 94 million units per year at its seven plants in South Korea, China, Hungary, and Indonesia. The company also supplies tyres to BMW, Nissan and Toyota.