In keeping with its goal of becoming the fifth largest tire maker globally by 2015, Kumho Tire Co. Ltd.'s sales jumped 10 percent in 2007 to $2.4 billion, and the company is ramping up additional capacity.
Kumho Tire U.S.A. Inc. executives gave a report card on the company's performance worldwide and in the U.S. and a glimpse of its future direction during its annual meeting, Jan. 12 in Rio Grande.
In the U.S., Kumho saw its sales surge 22 percent to $565.5 million, a $100 million increase from 2006, according to David Hudrlik, senior vice president of sales for Kumho Tire U.S.A.
About 10.1 million units were sold in the U.S. in 2007, and 9.9 million of those units were sold in the replacement market, Mr. Hudrlik said. He noted that 2007's unit sales were up 1.8 million units from 2006. The firm's replacement market shares are 5 percent in passenger tires, 1 percent in light truck tires, 8.1 percent in high-performance and 5.6 percent in ultra-high-performance tires.
Mr. Hudrlik said Kumho's global tire capacity amounts to 60 million tires, and that's not counting two plants that will come on stream this year: a medium truck tire factory in Nanjing, China, and a light truck tire factory in Vietnam. By 2012, Kumho plans to attain a global annual tire capacity of 93 million units.
Mr. Brennan noted that for Kumho to reach the No. 5 spot globally, the company would need to sell a projected 17 million units in the U.S. and achieve $6 billion in sales globally by 2015.
In 2008, there will be no changes in passenger tire supply to U.S. dealers, but light truck tire supply should increase by 1 million units as Kumho's Vietnam plant comes on stream at the end of the first quarter, Mr. Hudrlik said.
The company's future direction and its plans to augment capacity levels should mean better fill rates for tire dealers, Tom Bowman, vice president of the commercial division for Allen Park, Mich.-based Belle Tire, told Tire Business. He said he is pleased with Kumho's goals and thinks the tire maker definitely will overtake other manufacturers to reach the No. 6 or 7 spot in tire sales by 2015.
The tire maker had announced at last year's Specialty Equipment Market Association Show that it is considering sites in the U.S. to construct a tire plant, with Georgia and Alabama as the top contenders. However, at the Rio Grande meeting Mr. Hudrlik said a factory deal had not been signed yet.
Kumho also has gained an original equipment fitment in North America, on the upcoming 2009 Dodge Journey crossover vehicle, Mr. Hudrlik said. The tire maker expects to sell 400,000 units of its Solus KH 16 for the Journey in three sizes: 225/65R17, 225/55HR19 and 225/55TR19. ``We're concentrating on the U.S., but responsibly,'' he told dealers. ``Our No. 1 priority is the replacement market.''
Noting that Chrysler L.L.C. wants the Journey to be a premier seller and will make a significant marketing investment in the vehicle, Mr. Hudrlik added that Kumho is supplying the auto maker only with excess capacity and not taking supply away from dealers.