Tire Industry Sees 'Increased Tire Demand' with Bright Q3 Earnings

Hankook Tire and Kumho Tire See Decrease in Operating Profit Compared to Q3 Last Year
All Three Tire Companies Show Increase Compared to Last Quarter

[Asia Economy Reporter Ki-min Lee] Following the revitalization of the automotive-related market this year and the recent consecutive launches of new vehicles by global automakers, domestic tire companies are expected to continue improving their third-quarter performance.

Despite a decline in operating profits compared to last year for Hankook Tire & Technology and Kumho Tire, excluding Nexen Tire due to increased freight and raw material prices, the industry analysis suggests that steady performance improvements will be recorded this year.

According to financial information provider FnGuide on the 18th, Hankook Tire & Technology is projected to record third-quarter sales of KRW 1.9398 trillion, up 2.85% year-on-year, and operating profit of KRW 215.7 billion, down 4.01%.

Kumho Tire is estimated to post sales of KRW 652 billion, up 9.41% from the third quarter of last year, and operating profit of KRW 24.8 billion, down 43.51%. However, Nexen Tire is expected to record sales and operating profit of KRW 523.4 billion and KRW 24.5 billion, respectively, marking increases of 12.01% and 322.41% compared to the same period last year.

The surge in freight volume globally and the rise in raw material prices such as natural rubber have led to a slight decrease in operating profit compared to last year, but sales have increased.

However, companies with slightly decreased operating profits compared to last year are showing improved performance trends with increases compared to the second quarter. In fact, Hankook Tire recorded an operating profit of KRW 187 billion and Kumho Tire recorded KRW 11.4 billion in the second quarter. Key factors supporting stable performance include sales of high-inch, high-margin replacement tires and the mounting of domestic companies’ new car tires on new vehicles from automakers.

Hankook Tire supplies new car tires for Porsche’s Panamera, 718 Boxster, Taycan, Cayenne, Macan, Mercedes-Benz’s sports utility vehicle (SUV) GLC, BMW X3, X4 M, Audi’s RS4 and RS6 Avant, RS5 Coupe, RS7 Sportback, and RS Q8. Recently, it has also supplied new car tires to China’s electric vehicle Nio and Malaysia’s Perodua.

Kumho Tire, which supplies products to global automakers such as Mercedes-Benz, BMW, Volkswagen, Ford, and GM, recently supplied two types of new car tires for Kia’s dedicated electric vehicle EV6. The Renault Samsung XM3, which is produced locally, is showing strong sales in Europe, which is good news for Kumho Tire supplying new car tires for this vehicle.

Nexen Tire, which supplies electric vehicle tires for Hyundai Kona EV and Kia Soul EV, also supplies two types of new car tires for the EV6. Additionally, it supplies new car tires to Beijing Hyundai, Beijing electric vehicles, and the U.S. electric vehicle startup Canoo. It also supplies tires to Porsche, Volkswagen, and FCA.

An industry official stated, "Tire demand continues to increase, and as automakers keep launching new vehicles, the demand for new car tires is also rising."