SEOUL, February 04 (AJP) - South Korean tire manufacturers reported higher sales last year despite the impact of U.S. tariffs on auto parts, supported by solid replacement-tire demand and price increases.
Hankook Tire & Technology said Wednesday its tire business recorded sales of 10.32 trillion won ($7.7 billion) last year, up 9.6 percent from a year earlier and surpassing the 10 trillion won mark for the first time. Operating profit, however, fell 4.4 percent to 1.68 trillion won.
The company said it maintained steady growth in both global original-equipment (OE) and replacement markets despite economic uncertainty, supported by rising demand for larger-diameter tires.
Hankook said it expanded supply partnerships with automakers including Porsche, BMW, Xiaomi, Lucid Motors, Cupra and Kia, and now provides original-equipment tires to more than 40 brands across over 300 vehicle models.
Nexen Tire reported sales of 3.19 trillion won last year, up 12 percent and marking its fifth consecutive year of revenue growth. Operating profit edged down 1.07 percent to 170.2 billion won.
The company attributed sales growth to stable contributions from the second phase of its European plant expansion, along with continued gains in OE supply for both electric and internal-combustion vehicles supplied to more than 30 global automakers. Replacement tire sales also grew steadily, supported by region-specific product strategies.
"U.S. tariffs weighed on profitability but we mitigated the impact through diversified regional distribution and a stronger product mix driven by higher sales of larger-diameter tires," a Nexen Tire official said. "Lower raw material prices and easing ocean freight rates, together with cost-efficiency measures, also helped improve margins."
Kumho Tire, which is scheduled to release earnings on Thursday, is also expected to post revenue growth. According to financial data provider FnGuide, the company’s sales last year are estimated at 4.74 trillion won, up 4.6 percent, while operating profit is projected to fall 6.8 percent to 548.2 billion won, partly reflecting the impact of a fire at its Gwangju plant in May last year.
Based on these estimates, combined revenue for the three tire makers is projected to reach 18.25 trillion won, up 8.7 percent from the previous year.
This year, the companies plan to sustain growth through overseas capacity expansion and a focus on premium segments.
Hankook said it will continue expanding production at its Tennessee plant in the United States and its facility in Hungary, while strengthening partnerships with premium automakers.
The company aims to raise the share of high-inch tires to 51 percent and increase the share of electric-vehicle tires to at least 33 percent of passenger-car and light-truck OE revenue.
Nexen said it will concentrate on improving sales capabilities and growth quality through marketing efforts aimed at increasing brand exposure and strengthening customer partnerships. It also plans to leverage its premium OE track record to further expand replacement-tire sales.
* This article, published by Aju Business Daily, was translated by AI and edited by AJP.
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