Kumho Tire Co., South Korea's second-largest tiremaker by sales, said Thursday it will begin supplying tires for the Skoda Kamiq compact crossover in January.Kumho Tire also has been supplying ECSTA PS71 original equipment (OE) tires to Skoda's Czech Republic-based plant that produces the Octavia sedan since May.Scoda is a carmaker belonging to Volkswagen Group.
Supplying OE tires to car manufacturers does not generate much revenue for tiremakers but securing big companies as clients helps improve their brand image and can lead to the raising of product prices down the line.For tiremakers, it is more profitable to sell replacement equipment (RE) tires in after-sales markets.To enhance its global brand image, the tiremaker has shipped products to dozens of foreign carmakers, including Audi, Volkswagen, BMW and Mercedes-Benz.In the January-June quarter, its net losses widened to 132 billion won (US$116 million) from 43 billion won in the same period of last year due to the coronavirus impact on global tire demand for vehicles and tire production at the company's overseas plants.
In July 2018, China's Qingdao Doublestar Co. wrapped up a deal to acquire a 45 percent stake in Kumho Tire for 646.3 billion won from the state-run Korea Development Bank.By acquiring Kumho Tire, Doublestar said it will focus on mid- and low-end tires for trucks and buses, and Kumho Tire will focus on mid- and high-end tires for passenger vehicles.Kumho Tire earns 60 percent of its total revenue from abroad. It has eight plants -- three in South Korea, one in Vietnam, one in the United States and three in China -- whose combined capacity reaches 55 million tires.
