"Safety is the most important thing for car tires. Tire companies want a reliable company when deciding on the tire code, which is the backbone of the tire. We have built trust by accumulating our unique tire code technology. Just as semiconductors had 'Intel Inside,' tire codes have 'Hyosung Inside.'"
In mid-November, An Seong-hoon, CEO of HS HYOSUNG, explained the tire code competitiveness of HS Hyosung Advanced Materials by likening it to Intel, which dominated the global semiconductor market. Since the late 1970s, Intel has been a dominant force in the central processing unit (CPU) field, which determines the speed and performance of PC information processing. Just as the 'Intel Inside' logo symbolizes trust, the name HS HYOSUNG symbolizes trust in the tire code sector, according to CEO An.
Typically, consumers check tire brands when purchasing a vehicle or replacing tires, but they do not inquire about which company's parts are used inside the tire. However, what plays the most significant role in safety and driving is not the surface of the tire, but the inside. CEO An stated, "Tire companies discuss with tire code companies from the very first stage of tire development and develop technology together according to necessary performance."
From the perspective of tire code companies, it is crucial to guarantee performance to gain trust from tire companies and maintain a collaborative relationship, according to CEO An. This way, tire code companies can propose new material developments.
HS HYOSUNG was established as a new holding company independent from the Hyosung Group in July of last year. The vice chairman, Cho Hyun-sang, the third son of the late Cho Suck-rai, and CEO An lead HS HYOSUNG. CEO An joined the Hyosung Group in 2000 after working as a consultant at Bain & Company, handling business strategies. He took charge of management planning, overseas sales, marketing, and energy projects at Hyosung Heavy Industries from 2008, and was appointed as CEO with the establishment of HS HYOSUNG last year.
HS HYOSUNG's key company is HS Hyosung Advanced Materials, which has maintained the world's number one market share in the tire code segment for about 25 years. It holds a 50% market share in polyester tire codes, meaning one in every two tires contains tire codes from HS Hyosung Advanced Materials. The other half is shared by the Chinese companies Indorama, Hailide, the Turkish company Kordsa, and Kolon Industries in South Korea.
CEO An assessed that the competitiveness of products and technology from Chinese companies has improved significantly. The rapid growth of the Chinese electric vehicle market has accelerated the growth of the Chinese tire code industry. CEO An said, "Currently, one in two cars in China is an electric vehicle. Just as the arm bends inward, Chinese electric vehicle companies tend to use Chinese tire companies first, and Chinese tire companies tend to use Chinese tire code companies first." This reflects that Chinese companies are advancing through economies of scale.
CEO An also expressed caution in his New Year's address this year, saying, "China has transformed from a follower chasing us in the past to a leader gaining global competitiveness." He emphasized the importance of thoroughly understanding market movements and carefully listening to the voices of customers and their customers to develop and execute winning strategies against fierce competition from numerous rivals, including China.
CEO An pointed out reliability as an area where HS Hyosung Advanced Materials can surpass its Chinese competitors. He explained that while Chinese products have price competitiveness, the tire code business is not simply about competing on costs.
He stated, "For products that prioritize safety, there is a sense of caution regarding China in terms of trust." For example, when changing tires, consumers prefer products from verified companies over unknown Chinese companies, leading them to favor premium products due to the visible branding of tires.
CEO An believes that trust is essential in organizational culture. He stated that to create new added value and survive in the global market, companies must also change their way of thinking. He mentioned that even if it is risky, firms need to take the initiative in areas they haven't attempted before to survive in the competitive landscape. He said, "To do this, a culture that allows for challenges, such as 'Let's try this,' must emerge, breaking away from the unique top-down culture of Korean corporations."