SEOUL, South Korea — Hankook Tire & Technology Co. Ltd. reported 51.5% higher operating income for the quarter ended March 31 on 17.5% higher sales revenue of $1.65 billion.
Hankook attributed the operating improvements to increased OE business with vehicle makers and a rise in replacement market sales in Europe and other global markets, and were achieved despite difficult business conditions, such as the global economic downturn, intensifying competition and more.
Operating earnings rose to $150 million, yielding an operating ratio of 9.1%, up two points from the year-ago quarter.
Hankook cited it strategy of focusing on the premium market sector, a move that includes increasing the proportion of higher value-added products and securing sales of tires exclusive to electric vehicles (EVs).
The company said its goal this year is to raise to about 20% the proportion of EV tires to its total supply for passenger and light truck OE tires, up from 11% last year and 5% in 2021.
During the quarter, Hankook said it secured OE fitments with Chinese electric vehicle start-up Zhejiang Leapmotor Technology Co. Ltd. for its C11 electric SUV, Volkswagen A.G.'s "ID.Buzz" electric bus and Toyota Motor Corp.'s "bZ4X" electric SUV.
In addition, Hankook said it increased the proportion of sales attributable to 18-inch rim diameter and larger passenger tires to 43.5% of all passenger tires, up by 4.5 percentage points versus the 2022 first quarter.
In North America, the gain was 6.6 percentage points to 54.2%.
The Seoul-based company said its goal is to grow sales by more than 5% this year over 2022 and achieve 45% sales for 18-inch and higher passenger tires, primarily by focusing on increasing sales in major markets, strengthening partnerships with premium car makers and sustaining leadership in the electric vehicle tire segment.
Hankook Tire did not comment in its earnings report on the status of its Daejeon factory, which has been idled since March 12 because of a fire that swept through a portion of the plant.
Hankook Tire America told Tire Business i— a separate communique the week of May 7 that an investigation into the cause is still under way, and "we continue to review all possible solutions to ensure prompt restoration."
The Nashville-based company also said it is operating a help desk for on-site support and will continue to share updates with its customers as it assesses the impact of the fire.
Hankook Tire America also told Tire Business that one production line at the plant was not affected by the fire and is undergoing a test run "under strict supervision," but noted: "We cannot predict when the plant will be back to full production as we are still undergoing the official investigation."
The idling of production at the plant has had one concrete consequence: the company was forced to bow out of a race-tire supply contract for the 2023 season for the Super Taikyu sports-car endurance racing series in Japan.
