CHANGCHUN, China (Jan. 12, 2006) — Kumho Tire Co. Inc. will build a passenger tire plant in Changchun—its third factory in China—over the coming 18 to 24 months at a cost of $150 million.
Kumho will partner with Chinese car maker FAW Group Corp. to finance the plant, although Kumho said it will contribute up to 90 percent of the funding. The plant, to be on-stream by the first half of 2007, will have a capacity of 3.1 million tires a year, Kumho said.
The new plant will supplement an existing Kumho factory in Nanjing and a plant under construction in Tianjin, giving Kumho annual capacity of about 30 million units by 2007-08.
Kumho only recently broke ground on its $185 million Tianjin plant, which will have annual capacity of 5 million passenger and light truck units when it comes on stream in 2007 and 12.5 million units annually long-term. The firm also recently completed an expansion of its 7-year-old Nanjing plant, doubling annual capacity to 11 million units by constructing what amounts to a second plant on the factory grounds.
Kumho President and CEO Sae-Chul Oh said earlier the company intends to become the No. 1 replacement brand in China by 2006, targeting a 15-percent passenger tire market share by then.
FAW Group—FAW stands for First Automotive Works—makes cars under its own brand names and has manufacturing partnerships with Germany's Volkswagen A.G. and Japan's Toyoto Motor Corp.