Hankook reports growth in 2021 despite ‘bumpy fourth quarter’

Seoul – Hankook Tire & Technology has reported a 2.2% year-on-year growth in operating profit to KRW641 billion (€474 million) for the year 2021, helped by higher sales of large-diameter tires. 

Annual sales rose 10.6% to KRW7,142 billion during 2021, despite operational difficulties in the final quarter of the year, the Korean tire announced 4 Feb. 

Hankook linked the increases to large-diameter tires measuring 18 inches and above, saying the category grew 3.1% year-on-year to account for 37.7% of total passenger car (PCR) sales. 

Sales momentum, Hankook said, slowed in the second half of the year, with the global economy collectively tackling issues such as global supply chain disruption, semiconductor shortage and rising raw materials costs.

The fourth quarter, it went on to say, was “a particular bump in the road” as the company reported a 61% decline in operating profit to KRW88 billion, on 7% lower sales of KRW 1,889 billion.

Hankook said the decrease was largely due to a rise in operating costs and delayed sales opportunities caused by labour strikes at its Daejeon and Geumsan plants in Korea. 

Sales of large-diameter tires was the driving force for growth during the final quarter of the year, accounting for nearly 39% of total PCR sale during the period.

In particular, sales of large tires in China amounted to 46.4% of total revenue, a 6.7 percentage point increase compared to the year before. 

Other markets also saw strong performance in large-diameter tires with increases of 2 percentage points in Europe and 2.9 percentage points in Korea.

Overall, Hankook said it gained “remarkable recognition” for its product quality during 2021, receiving ‘top ratings from leading auto magazines’.

Furthermore, Hankook said it strengthened its standing in the premium OE sector and electric vehicle tire sector in 2021, with the company starting to equip the Porsche Panamera, BMW X3M and X4M, while fitting its EV tires on Audi e-tron GT and Volkswagen ID.4. 

In 2022, the Korean tire maker said it planned to further enhance its brand value, with the aim to achieve double-digit growth and to increase the share of large-diameter tires sales to 42% of total PCR sales.

“Hankook will intensify its focus on strengthening its business in major markets, expanding OE partnerships with global premium car makers, and gaining leadership in the electric vehicle tire sector,” it concluded.