Kumho Tire posted robust results for the second quarter, showcasing significant growth in sales and operating profit. The South Korean tire manufacturer reported provisional Q2 sales of 1.1319 trillion won (approximately $838 million) and an operating profit of 151.5 billion won. This represents a 12.7% increase in sales from the previous year, marking the second-highest Q2 performance in the company’s history.
The remarkable 72% year-on-year rise in operating profit brought the operating profit margin to 13.4%. This growth was fueled by the expansion of original equipment (OE) tire supply and the growth in the replacement (RE) tire market, particularly high-profit tires. A company representative noted the strategic focus on high-performance and high-value-added products, specifically those 18 inches and above, contributing to the improved profitability.
Kumho Tire has set a sales target of 4.56 trillion won for the year, aiming for a 42% sales proportion for products 18 inches and above and at least 16% of global OE sales from electric vehicle (EV) tires. As of the first half of the year, high-inch products accounted for 40.8% of sales, and the proportion of EV tire OE supply increased to 12% from last year’s 9%, driven by new vehicle model expansions.
To further its growth, Kumho Tire is launching its dedicated EV brand “EnnoV,” targeting the premium market. Additionally, the company is considering new overseas plant investments to bolster supply to European automakers. With the stabilization of operations at its existing Vietnam plant, an increase in production volume and improved global tire production capacity are anticipated.
Kumho Tire’s strong Q2 performance comes amid significant industry trends and economic factors. The increasing demand for electric and high-performance vehicles drives the need for specialized tires, while inflation, raw material costs, and global supply chain issues influence manufacturing costs and sales performance. The company’s global expansion, including potential new investments and the stabilization of the Vietnam plant, is part of its strategy to enhance production capacity and market share.
