Kumho Tire announced a global consolidated revenue of 2.2997 trillion KRW and operating profit of 192.4 billion KRW for the third quarter of 2022.
The company’s Q3 results showed a year-on-year increase of 25.7% in revenue and 6.4% in operating profit, as well as a quarter-on-quarter increase of 12.7% in revenue and 9.8% in operating profit.
Despite a challenging business environment, sales and operating profits increased due to price increases in key global markets, including Europe and North America, a greater focus on high-value products, and currency effects. The demand for original equipment tires (OET) saw improvements not just domestically but also in Europe, the U.S., and China, corresponding to an increase in vehicle production in major global regions.
The sales proportion of high-value products, specifically passenger car tires with a diameter of 18 inches and above, reached approximately 41.1%, marking a 4.7 percentage point increase compared to the same period last year. By region, the sales share of these tires increased to 51.4% in Korea (up 4.2 percentage points), 30.1% in Europe (up 4.4 percentage points), 51.2% in the U.S. (up 3.6 percentage points), and 52.3% in China (up 8.9 percentage points).
On the other hand, demand for replacement tires was sluggish compared to the previous year due to declining consumer sentiment caused by inflation, the Russia-Ukraine conflict, and regional lockdowns in China.
The South Korean factories (Daejeon and Geumsan) have reported a cumulative profit margin of 0% for Q3 due to a guerrilla strike by the Korean Metal Workers’ Union, which began in July, causing significant disruptions to overseas exports. This comes after the company recorded an annual loss last year and has struggled with profitability recovery.
This year, Kumho Tire continues various activities to seize the electric vehicle market, including supplying premium electric vehicle OE tires both domestically and internationally, launching a dedicated electric tire brand ‘iON,’ and serving as a technical partner and exclusive tire supplier for the ABB FIA Formula E World Championship from the 22/23 season.
From October, the portfolio of the ‘iON’ tire brand, previously limited to passenger cars, will be expanded to include trucks and buses, aiming to lead the market. The new electric bus tire ‘Smart iON AU06+’ has been launched to spearhead the electrification of commercial vehicles.
Despite the uncertain global tire market amidst economic downturns and rising energy costs, Kumho Tire aims for double-digit revenue growth compared to the previous year in 2022, increasing the sales share of tires for passenger cars with a diameter of 18 inches and above and capturing the electric vehicle market.
Lee Sang-jin daedusj@autodiary.kr