Kumho Tire successfully rebounded to make a profit in the third quarter this year thanks to the increase in demand for replacement equipment (RE) tires in global markets including the United States and China.
According to the tiremaker, its operating profit was recorded at 43.9 billion won, skyrocketing by 176.1 percent year-on-year.
Kumho Tire's sales in the third quarter were 595.9 billion won, a 1 percent year-on-year increase up from 590 billion and a 27.4 percent soar compared to the 467.7 billion won shown in the second quarter, this year.
Kumho Tire said rise in demand for RE tires in major markets like the United States, Europe and China has helped its sales increase while its operating profit expanded with reductions in fixed costs thanks to the falling unit prices of raw materials and recovering operation rates following increased production.
In addition, sales of tires for wheels of over 18 inches in diameter accounted for 33.4 percent of the total sales in the third quarter this year, which is a 1.7 percent increase year-on-year. This is significant as these bigger tires for passenger cars have higher added value compared to those of smaller ones.
On top of that, the company's focus on supplying tires for new cars has also played a positive effect. Kumho Tire recently signed original equipment (OE) tire contracts with Volkswagen Group's new models including Skoda.
"We are seeing a recovery in sales in the second half of this year and we will continue to maintain our surplus as the demand for our product in the domestic and overseas markets is increasing," a Kumho Tire official said. "We plan to strengthen our product competitiveness by expanding sales of larger tires ― over smaller ones ― in major markets and supplying tires for new premium cars."
