SEOUL, South Korea — Propelled by the expansion of high-value-added products and strong pricing strategy, Hankook Tire & Technology Co. Ltd. reported 9.9% higher fiscal 2022 operating income on record sales.
Operating profit increased to $546.9 million on 17.5% higher sales of $6.5 billion. As a result, the operating ratio slipped slightly to 8.4%.
Hankook noted that fiscal 2022 was a tale of two halves — the first six months of the year were impacted by high raw material costs and global supply-chain disruptions, while the costs of raw materials and logistics stabilized in the second half and a favorable currency situation and increased original equipment demand boosted the bottom line.
Record annual sales were buoyed by rising demand for high-value-added products and strong pricing strategy despite global market conditions.
Sales of the larger rim-diameter tires — those 18 inches and larger — made measurable contributions to the increased sales. Global sales of such tires accounted for 40.8% of the company's total passenger tire sales, up 3.1 percentage points over 2021.
Hankook said this trend was measured in all its regions, led by China, which recorded a 12.4 point increase in the fourth quarter. Overall, though, demand for replacement market tires dipped slightly as inflation impacted consumer sentiment.
In 2023 Hankook aims to achieve sales growth of over 5% while increasing the portion of larger rim-diameter tires to 45% of all passenger tire sales. The company also has set a goal of boosting to 20% the share of original equipment supply for electric vehicle models among all passenger and light truck OE contracts.
Hankook's overall focus will be on increasing sales in major markets, strengthening partnership with premium car makers and solidifying its leading position in the electric vehicle tire segment.
Hankook's sales in North America grew 27.3% to $1.89 billion, based on growth in both the replacement and OE segments.
