South Korea’s second largest tire maker Kumho Tire Co. now under China’s Doublestar Tyre claimed it was on track in normalizing manufacturing and sales network and reversing to a profit possibly from the fourth quarter.
“The money is in and management back to normal,” said Chai Yongsen, Doublestar Tyre chairman in a ceremony marking a new beginning for the company.
He reiterated that Kumho will maintain its autonomy and identity.
The Qingdao-based tire maker in July fully paid 646.3 billion won ($583 million) to become the largest shareholder in Kumho with a 45.0 percent stake.
The company will first focus to reduce the losses in its overseas operations in China, Europe and North and South America, expand domestic sales network and improve labor-management relationship in hopes to return to profit during the second half of this year.
In detail, Kumho Tire plans to expand its sales network in China and ease concerns among dealers by promoting the company’s improved financial health. It will also improve its product mix and up orders of premium products to bolster sales in China.
“We will normalize the factory operations from next year to make profits” by increasing capex and improving quality, said Kim Jong-ho, chief executive of Kumho Tire.
Kumho Tire reported an operating loss of 12.7 billion won ($11.4 million) for the April-June period, extending losses for six consecutive quarters.
