Hankook Tire: Record sales in 2022

Announcing its 2022 financial results, Hankook Tire & Technology (Hankook Tire) shares that its consolidated global sales reached an “all time high” last year. Sales increased 17.5 per cent to KRW 8,394.2 billion (£5.6 billion, $6.9 billion). Operating profit rose 9.9 per cent year on year, to KRW 705.7 billion (£468.2 million, $576.7 million).

The tyre maker shares that two primary factors drove sales to record levels. First, Hankook Tire expanded the proportion of high-value-added products it manufactured. This was coupled with a “strong pricing strategy” to combat high raw material costs and global supply chain disruptions, particularly in the first half of the year. As the costs of raw materials and logistics stabilised in the second half of 2022, favourable exchange rates and growing demand for original equipment tyres pushed up the bottom line.

Larger sizes driving sales

Hankook Tire credits sales of the large-diameter tyres as being “among the biggest contributors to the increase in sales.” Global sales of passenger car tyres for 18” or larger rims accounted for 40.8 per cent of the company’s total passenger car tyre sales, up 3.1 per cent year-on-year. Looking at just Q4 2022 and the figure reached 43.9 per cent, a 5.0 per cent year-on-year increase.

By region, Hankook Tire saw its largest growth for passenger car tyres in the 18” and up size range in China, where these products’ share of the total grew 12.4 per cent year-on-year to 58.8 per cent during Q4 2022. Hankook Tire’s homeland of South Korea followed with a 5.7 per cent year-on-year rise in Q4 2022, to 53.5 per cent of the total. Tyres in 18” and larger dimensions represented 32.5 per cent of Hankook Tire’s sales in Europe in Q4 2022, up 3.4 per cent on a year earlier, while in North America they accounted for 51.9 per cent of the total, up 2.5 per cent year-on-year.

Q4 2022 results

On the back of this trend towards larger tyres, in the fourth quarter of the year Hankook Tire recorded consolidated global sales of KRW 2,263.8 billion (£1.5 billion, $1.9 billion) and operating profit of KRW 212.0 billion (£140.6 million, $173.3 million), respectively up 19.9 per cent and 140.1 per cent year-on-year. However, demand for aftermarket tyres dipped slightly compared to the previous year, with inflation weighing on consumer sentiment.

2023 outlook

By the end of this year, Hankook Tire aims to achieve sales growth of over five per cent year-on-year while increasing the portion of high-inch tyres to 45 per cent of all passenger car tyre sales. The company also seeks to raise the share of original equipment supply for electric vehicle models to 20 per cent among all passenger car and light truck OE contracts.

On the whole, Hankook Tire intends to “focus on increasing sales in major markets, strengthening partnership with premium carmakers and sustaining leadership in the electric vehicle tyre segment.”