Seoul – Hankook Tire has reported double-digit declines in sales and operating profit for the first quarter due in part to low demand caused by Covid-19 outbreak.
Earnings fell 25% to KRW105.8 billion (€80 million) over the first three months of the year on 12.6% lower sales of KRW 1,435 billion, the South Korean group announced 7 May.
Hankook linked the earnings decline to “a sharp drop in demand for tires” caused by the Covid-related economic slowdown and lower consumer sentiment.
“Covid-19 has had an overall impact on the major global markets, including a decrease in demand for original equipment tires and replacement tires,” the tire maker added.
Despite low demand, Hankook said its high-inch tires (18 inches or higher) showed a 2.7% growth over the first quarter, accounting for 33.7% of the overall passenger car tire sales.
The segment displayed stable growth in key markets such as South Korea, North America and China, helping Hankook ‘consolidate its premium brand image.’
Moving forward, Hankook said it planned to expand sales of high-rim tires in major markets and increase OE supply in a bid to improve “its standing as a premium brand.”