The tire industry is expected to achieve record results for the second consecutive year. With the increasing popularity of sport utility vehicles (SUVs), and automakers preferring larger tires than before, sales of high-inch tires are rising. High-inch tires, those with a diameter of 18 inches or more, are expensive due to their superior performance.
According to the industry on the 6th, Hankook Tire & Technology recorded sales of 9.41 trillion won and an operating profit of 1.76 trillion won last year. This is the first time in its history that sales exceeded 9 trillion won. Compared to 2023, sales increased by 5.3% and operating profit rose by 32.7%, marking the highest operating profit ever.
Although Kumho Tire and NEXEN TIRE have yet to announce their results, they are expected to have achieved record results last year. According to financial information provider FnGuide, Kumho Tire's sales are predicted to have reached 4.49 trillion won, a 11.19% increase compared to 2023, with an operating profit of 589.6 billion won, a 43.44% increase. NEXEN TIRE is expected to post sales of 2.87 trillion won, a 6% increase compared to 2023. However, a slight decrease in operating profit is anticipated.
The combined operating profit forecast for the three tire companies last year is expected to exceed 2.5 trillion won. The combined operating profit for the three companies in 2023 was 1.37 trillion won. This marks the first time since 2016 that the combined operating profit exceeded 1 trillion won, nearly doubling within a year.
The driving force behind the three companies' performances has been high-inch tires. Larger tires are fitted to SUVs and electric vehicles. Due to the size of SUVs and the weight of electric vehicle batteries, the tires must also be specially designed. High-inch tires require more raw materials and must have different internal structures and tread patterns for better grip, leading to higher pricing compared to standard tires.
The sales proportion of tires 18 inches and larger from Hankook Tire expanded from 44.8% in the third quarter last year (July to August) to 46.5% in the fourth quarter (October to December). For the third quarter, Kumho Tire's proportion was 42%, while NEXEN TIRE's was 35.9%.
The tire industry plans to continue its successful performance this year, focusing on high-inch tires. A tire industry official noted, "While automakers used to equip small cars with 15- to 16-inch tires, they now frequently use 17- to 18-inch tires. This shift in the market has played a significant role in sales," he said.