Kumho Tire has demonstrated impressive performance in the second quarter of this year, revealing substantial gains in both revenue and operating income.
On July 30, the South Korean tire producer disclosed its preliminary Q2 results, showing sales of 1.1319 trillion won (approximately $838 million) and an operating profit of 151.5 billion won. This represents a 12.7% rise in sales compared to the same period last year, marking it the company’s second-highest Q2 performance ever. These outstanding results were largely driven by the increased supply of original equipment (OE) tires and the expansion in the replacement (RE) tire market, particularly in high-profit segments.
The operating profit exhibited a remarkable 72% year-over-year increase, yielding an operating profit margin of 13.4%. A Kumho Tire representative stated, “We are maintaining our growth trajectory by enhancing the sales share of high-performance and high-profit products. Additionally, we’ve improved our profitability by raising the sales proportion of high-value-added products, especially those measuring 18 inches and above.”
Kumho Tire has set an ambitious goal for this year with a sales target of 4.56 trillion won. The company aims for a 42% sales share for products 18 inches and larger and seeks to secure a 16% or greater share of electric vehicle (EV) tires in global OE sales. In the first half of the year, the sales share for high-inch products reached 40.8%, and the EV tire OE supply share increased to 12% from last year’s 9%, spurred by the rollout of new vehicle models.
This year, Kumho Tire is launching its dedicated EV brand “EnnoV” to cater to the premium market. The company is also exploring new overseas plant investments to expand its supply to European automakers. A Kumho Tire spokesperson commented, “With the stabilization of operations at our existing plant in Vietnam, we anticipate an increase in production volume, alongside expansions and efficiency improvements in our global tire production capacity.”
Kumho Tire’s robust Q2 performance is set against a backdrop of significant industry trends and economic influences. As a leading tire manufacturer in South Korea, Kumho Tire has a substantial presence in both domestic and international markets. The company’s growth is driven by the increasing demand for electric and high-performance vehicles, necessitating specialized tires. Additionally, the current economic environment, including inflation, raw material costs, and global supply chain challenges, significantly impacts manufacturing costs and sales outcomes.
The company’s global expansion strategy, including the stabilization of its Vietnam plant and potential new overseas investments, aims to boost production capacity and market share.