Hankook results dampened by automotive slowdown

Seoul – Hankook Tire & Technology has seen its third quarter sales and profit dampened by the global decline in car production, the Korean tire maker announced 1 Nov.

Operating profit fell 19.5% to KRW 180 billion (€131 million) on 3% lower sales of KRW 1,830 billion during the three months to end of September. 

Hankook linked the decline to a slowdown in the global production of cars “in the midst of key parts shortage, including semiconductors.”

Challenges, it said, were further escalated by the global supply chain crisis and increased raw materials costs. 

However, Hankook said it delivered “a meaningful quarter”, showing further recovery from the previous quarter.

Quarter-on-quarter, sales rose 1.3% from KRW1,800 billion reported in the second quarter.

Operating profit was, however, down 3% sequentially. 

Over the three month period, sales of high-inch tires (18” and up) accounted for 36.4% of passenger car tires sold, up 2.4 percentage points year-on-year.

In particular, Hankook said large-rim tires performed stronger than last year in key markets such as South Korea, China, Europe, and North America.

The company saw a 9.8 percentage points increase in sales of high-inch tires to reach 43.4% in China. As for the European market, Hankook said sales of such tires grew 3.6 percentage points, but did not provide further details.

Hankook said it has targeted sales of KRW 7,000 billion this year, to be achieved through driving large-rim tire sales in major markets, expanding OE partnerships with premium car makers as well as securing “leadership” in the electric vehicle tire sector.