Kumho Tire Posts Sales Record, Plans 1 Trillion Investment This Year... "Increase in High-End and Electric Vehicle Share"

Hankook Tire Reports Operating Profit of 705.7 Billion KRW Last Year, Up 10% YoY
Sales Expected to Rise 5% This Year
1 Trillion KRW Invested in Tennessee Plant Expansion and More

[Asia Economy Reporter Hyunseok Yoo] Hankook Tire & Technology (hereinafter Hankook Tire) announced on the 2nd that it recorded an all-time high consolidated sales of KRW 8.3942 trillion and operating profit of KRW 705.7 billion in 2022. Sales increased by 17.5% and operating profit by 9.9% compared to the previous year.

Despite a challenging business environment in the first half of last year due to rising raw material prices and a global logistics crisis, the company laid the foundation for growth through expanding the proportion of high value-added products and effective pricing strategies. In the second half, it achieved record-high sales thanks to the stabilization of raw material and shipping costs, favorable exchange rate conditions, and increased supply of original equipment tires (OET) for new cars in major global markets.

The sales proportion of high value-added tires for passenger cars sized 18 inches and above accounted for 40.8%, rising 3.1 percentage points from the previous year, continuing qualitative growth as a premium brand. Additionally, Hankook Tire strengthened its position by supplying tires for new electric vehicle models from global automakers such as BMW, Audi, Hyundai, Toyota, and Skoda in the electric vehicle new tire market.

In the fourth quarter of last year, sales reached KRW 2.2638 trillion and operating profit KRW 212 billion, growing 19.9% and 140.1% respectively compared to the same period last year. Meanwhile, the sales proportion of high-inch passenger car tires sized 18 inches and above rose to 43.9%, up 5.0 percentage points year-on-year. By region, Korea increased by 5.7 percentage points to 53.5%, China by 12.4 percentage points to 58.8%, Europe by 3.4 percentage points to 32.5%, and North America by 2.5 percentage points to 51.9%.

However, demand for replacement tires (RET) slightly declined compared to the previous year due to weakened consumer sentiment caused by inflation. Additionally, profitability recovery at Korean plants (Daejeon and Geumsan plants) was delayed. The Korean plants recorded losses for two consecutive years, including 2021, due to guerrilla strikes and other issues.

To capture the electric vehicle tire market, various activities were undertaken last year. The world’s first full lineup electric vehicle dedicated tire brand ‘iON’ was launched in Europe in May, Korea in September, and North America in December. New tires were supplied for electric vehicle models from global automakers such as BMW ‘i4’, Audi ‘Q4 e-tron’, Hyundai ‘Ioniq 6’, Toyota ‘bZ4X’, and Skoda ‘Enyaq iV’.

In 2023, Hankook Tire aims to achieve over 5% sales growth compared to the previous year, reach a 45% sales proportion of high-inch passenger car tires sized 18 inches and above, and increase the supply proportion of electric vehicle models in new tire supply for passenger and light truck tires to around 20%. The company plans to focus on expanding tire sales in key markets, strengthening premium automaker partnerships, and securing a leading position in the electric vehicle market. Alongside this, approximately KRW 1 trillion will be invested this year in maintenance and modernization, including expansion of the Tennessee plant.