Porsche gets 'Hankook,' Volkswagen gets 'Laufenn' — Hankook Tire accelerates two-track strategy

Hankook Tire & Technology is stepping up its two-track strategy, deploying its two brands — Hankook and Laufenn — on separate fronts of the global tire market.

Under the dual-brand approach, the premium Hankook label targets the premium and electric vehicle segments, while the value-oriented Laufenn brand goes after the mass market where price competitiveness matters most. The company aims to pursue premiumization and market expansion simultaneously as it pushes to break into the global top five.

Laufenn, Hankook Tire & Technology's global value brand, has been deepening its partnership with Volkswagen Group and expanding its original equipment supply, according to industry sources. This month, the company said it would supply its second-generation summer performance tire, the Laufenn S FIT2, as original equipment for the Seat Leon compact hatchback. Also this year, Laufenn is supplying OE tires to the Skoda New Octavia, the Volkswagen Golf 8 and Polo, and the Seat Ibiza and Arona.

Laufenn made its global debut in 2015 and has since expanded its lineup from passenger car and SUV tires to commercial tires for trucks and buses, and is now sold in more than 100 countries. Its prices are lower than those of the premium Hankook brand, but the tires are validated at Hankook Tire's research facility, the Hankook Technodome, and at the Hankook Techno Ring — Asia's largest tire test track — to raise performance standards. The brand also carries the same six-year quality warranty as the Hankook label.

The Hankook brand, meanwhile, is pushing hard into the premium segment. Building on roughly a decade of OE collaboration with Porsche, the company supplies a custom-designed ultra-high-performance super sport tire, the Ventus S1 evo Z, for the 911 Carrera — Porsche's iconic sports car. The tire has earned the NA2 official certification mark, which indicates it meets Porsche's stringent performance requirements as an original equipment tire.

Beyond Porsche, the Hankook brand supplies original equipment tires to more than 40 brands and about 300 vehicle models. The Ventus line goes to the BMW 7 Series and X5, while the iON evo AS SUV is fitted to the premium electric SUV iX. For the Mercedes-Benz S-Class, Hankook supplies the Ventus S1 evo3, which has received the MO (Mercedes Original) mark — Mercedes-Benz's certification for genuine original parts.

The premium strategy is showing up in the company's financial results. According to Hankook Tire & Technology, the share of large-diameter tires — 18 inches and above — stood at around 35 percent in 2020, but climbed to 47.8 percent last year and reached 49.3 percent on a cumulative basis through the second quarter of this year. The company is targeting a share of more than 51 percent for the full year.

The iON electric vehicle tire brand is another pillar of the premium strategy. Launched in 2022, iON is Hankook Tire's dedicated EV tire brand, featuring proprietary noise-absorption technology to reduce road noise and a low rolling-resistance structure to extend driving range and improve energy efficiency. The tires also use a specially reinforced sidewall material designed to handle the added weight of heavy EV batteries. The share of electric vehicles among the company's OE tire shipments has grown from 5 percent in 2021 to 30.7 percent on a cumulative basis through the second quarter of this year, with a target of more than 33 percent by year-end.

As the two-track strategy gains momentum, Hankook Tire & Technology's tire division posted sales of 10.32 trillion won ($7.59 billion) last year — the first time in the company's history it has crossed the 10 trillion won mark. The operating profit margin reached 16.3 percent. Growth has continued into this year: second-quarter tire division sales came in at 2.81 trillion won and operating profit at 483.2 billion won, up 11.8 percent and 39.5 percent, respectively, from the same period a year earlier. The quarterly sales figure was the highest on record.

Industry observers say the dual-brand approach is designed to expand Hankook Tire & Technology's market reach without diluting the value of its flagship brand. By using the Hankook label to drive brand prestige upward while channeling price-sensitive mass-market demand through Laufenn, the company is positioning itself to cover the full spectrum of the tire market.

Through this strategy, Hankook Tire & Technology plans to break into the global top five. By last year's sales, the company ranked seventh, trailing Michelin, Bridgestone, Goodyear, Continental, Pirelli and Yokohama.

"As leading players from Europe, the United States and Japan show signs of slowing, Hankook Tire is chasing the fifth- and sixth-ranked companies with the premium strategy of its Hankook brand," an industry official said. "At the same time, it is aggressively expanding Laufenn in the mid- to low-price segment, where it competes with domestic and Chinese manufacturers, diversifying its market presence."