Hankook buoyed by large-size tires, strong pricing

Seoul – Hankook Tire has reported “all-time high” revenue and strong growth in operating profit for 2022, due mainly to strong pricing and increased sales of high-value-added large tires.

The Korean tire maker registered a 17.5% year-on-year rise in sales to KRW8,400 billion (€6.1 billion), while operating profit increased by just under 10% to KRW705 billion.

Record-high sales were propelled by the expansion of high-value-added products and strong pricing strategy, Hankook reported in a 2 Feb financial statement.

Hankook noted that it made the gains despite global market challenges, including high raw material costs and supply-chain disruptions, particularly in the first half of 2022.

“As costs of raw materials and logistics stabilised in the second half, a favourable currency situation and an increase in OE tire demand boosted the bottom line for the year,” said Hankook.

In particular,  the Korean tire maker said strong sales of large-diameter tires has given a significant boost to the company’s performance.

Sales of 18-inch or bigger passenger car tires accounted for 40.8% of the company’s total passenger car tire sales, up 3.1 percentage points (pp) compared to last year.

The figure reached 44% in the final quarter of the year, registering a 5.0pp increase year-on-year.

By region, Hankook saw its largest growth for large passenger tires in the Chinese market with a 12.4pp increase to 58.8% during the fourth quarter.

Korea, Europe and North America followed China in terms of demand for large tires.

While sales of larger tires lifted the results, Hankook noted a ‘slight dip’ in demand for replacement tires with inflation weighing on consumer sentiment.

In 2023, Hankook aims to achieve sales growth of over 5%, while increasing the portion of high-inch tires in total sales of passenger car tires to 45%.

The company also intends to raise the share of OE supply for electric vehicle models to 20% among all passenger car and light truck OE contracts.

Hankook said its overall focus will be on increasing sales in major markets, strengthening partnerships with premium carmakers and solidifying its position in the EV segment.