Jeong Il-taek, President of Kumho Tire, "Pursuing Establishment of New Factory in Europe, Will Definitely Do It"

Three New 'ECSTA' Ultra-High-Performance Products Launched on the 15th

Kumho Tire reaffirmed its commitment to establishing a new factory in Europe and expressed its ambition to expand its market share overseas. On the 15th, at a media event for the launch of a new ultra-high-performance tire brand held at the AMG Speedway in Yongin, Kumho Tire President Jeong Il-taek stated, "We will definitely proceed with the new factory in Europe," adding, "However, we are currently weighing the timing."

President Jeong said, "Considering the significant fluctuations in tariffs by country and product category, we are reviewing the construction of a new factory in three European countries: Poland, Serbia, and Portugal." He plans to invest in production facilities with a capacity of 6 million units for the European market and anticipates that approximately 800 billion to 900 billion KRW will be required.

Regarding the timing of the European investment, President Jeong provided various perspectives. Firstly, global tariff uncertainties are increasing, and last year's inflation surge led to higher material costs. Additionally, the Russia-Ukraine war has made local hiring in Europe and obtaining work permits for dispatch from Korea difficult, which he also pointed out.

Jung Il-taek, President of Kumho Tire, is speaking at the EXSTA new product launch press conference on the 15th. Photo by Kumho Tire

The investment for the European factory will be financed equally through external investment and equity capital. Lim Wan-joo, Head of Corporate Planning, stated, "Since Kumho Tire's profitability improved last year, we have generated a cash flow exceeding 500 billion KRW annually," adding, "Considering the investment timing around the latter half of next year, internal capital alone will be sufficient."

Regarding various trade risks, including the increasingly uncertain U.S. tariff issues, the company plans to respond with flexible price adjustments and targeting the premium market. President Jeong expressed difficulties, saying, "If equipment used in the Chinese factory is imported from the U.S., a 2.5 billion KRW piece of equipment would incur tariffs exceeding 2.5 billion KRW."

When asked about plans for U.S. investment to counter tariffs, he replied, "We do not think our investment priorities will change due to this tariff measure," adding, "However, we have already secured vacant land next to the U.S. factory, so we have the flexibility to respond depending on decisions made."

Kumho Tire also mentioned the possibility of raising local sales prices in the U.S. due to tariff impositions. Lim Seung-bin, Executive Vice President of Sales, said, "Price increases due to tariffs are inevitable," but added, "We are differentiating by increasing the proportion of high value-added products and are negotiating with local distribution channels with various pricing response scenarios."

Kumho Tire's high-performance performance brand 'Ecsta' new product launched on the 15th. Provided by Kumho Tire

On this day, Kumho Tire introduced three new products under its ultra-high-performance tire brand 'ECSTA.' The 'ECSTA Sport S' and 'ECSTA Sport' are summer high-performance tires tailored to European consumer preferences, while the 'ECSTA Sport A/S' is an all-season tire designed for the U.S. market.

Kumho Tire implemented a robust block stiffness design and enhanced durability in the new ECSTA products to achieve agile and precise handling performance. Additionally, the tire tread was optimally shaped to enable stable high-speed driving. The new noise reduction technology 'K-Silent Ring,' which attaches polyurethane foam inside the tire, minimizes tire resonance and noise generated from ground contact.

President Jeong stated, "We are already discussing the supply of the new ECSTA products with more than 11 global automaker brands," adding, "We will primarily produce them at the Korean factory, manufacture some in China, and plan to produce them as key products at the future European factory."