Move marks second deeper South Korean manufacturer push into local market in a matter of months
South Korean tyre manufacturer Hankook Tire has bought Australian firm JAX Tyres, hard on the heels of Hyundai’s truck market re-entry late last year.
The move comes more than four years after Hankook appointed JAX as its first national retailer.
JAX, gained from chairman Ian Hurrell and CEO Jeff Board for an undisclosed sum, sells car and commercial vehicle tyres and the purchase is part of Hankook’s global expansion plans.
“We will solidify the position as the global top tier brand by extending the role of the holding company,” Hankook Tire vice chairman and global CEO Seung Hwa Suh says.
“We will concentrate more on enhancing global competitiveness by diversifying the inorganic business in the automotive sector based on organic growth of tyre.”
Hankook has ambitions to expand into services here and the language appears to indicate some serious investment will be used to attain its goals.
“With the acquisition, Hankook Tire group plans to grow into a global top-tier company by expanding customer relationships and strengthening its competitiveness in the B2C distribution sector as a mainstay of new business, as an extension of the B2B characteristics of tire manufacturing industry,” the company says.
“Especially, the company is designed to strengthen its distribution competitiveness from Asia to the global market by applying an advanced franchise system to its distribution network.
“Hankook Tire will expand its growth model not only from the hardware-oriented business such as a plant establishment but also the software’s growth including distribution channels and premium services.
Hankook Tire plans to achieve a “win-win” outcome, whereby JAX Tyres can achieve continued growth by the strengthening and expansion of existing stores, further enhancement of both online capabilities and of the premium image and offers of JAX Tyres products and services.
“Hankook Tire anticipates large-scale synergies regarding this transaction, with the combination of JAX Tyres’ franchise system and Hankook Tire’s global footprint.
“The acquisition will provide Hankook Tire with an opportunity to expand in non-tyre business segments, by pursuing initiatives in light repairs and other new product and service segments.”
JAX operates 83 franchise stores and Hankook notes its digital sales strategy as an attraction.
“This deal, combining Hankook Tire’s global position and the JAX business system is a timely opportunity given the market’s noticeable trend to vertical slimming and integration, stimulated by the power of online and B2B/B2C opportunities and we look forward to realising significant opportunities afforded by this deal, both in Australia and elsewhere,” Board says.