Kumho Tyres recently acquired a front-row seat – for its advertising hoardings – at a high profile football match between Serie A teams Parma and Inter. The 220-metre electronic boards circumnavigated the pitch periodically displaying panels showing images advertising Kumho Tyres.
Following several years in the red Kumho Tires has turned its fortunes around and reported a net profit for the 2010 financial year. The South Korean tyre maker recorded a net income of KRW 8,901 million (£5.01 million) during the year, a marked contrast from the loss of KRW 776,168 million a year earlier. Sales for 2010 amounted to KRW 2,701,990 million (£1.52 billion), a 42.6 per cent year-on-year increase. Operating income during the year was KRW 244,947 million (£137.9 million), as opposed to an operating loss of KRW 213,580 million in 2009.
Vehicle manufacturers in China are set to recall up to 75,000 cars fitted with Kumho tyres as original equipment. According to various sources, Beijing Hyundai will recall around 63,500 cars built between June 4, 2008 and January 13, 2011, while some 7,200 Kia Rio and Cerato vehicles and almost 4,700 cars manufactured by Great Wall Motor will be recalled.
Disagreement between members of the Kumho Tyre Workers’ Union (KMWU) and the South Korean tyre maker has led to disruptions in production at factories located in Gwangju and Gyeonggi provinces. Union members set the ball rolling with a one-day strike on March 25. Upon their return, the 3,400 employees at the two plants were apparently asked to sign individual agreements pledging not to strike. A lockout was then announced.
Kumho Tires has announced a voluntary recall of certain tyres in China after the company’s head of research and quality control visited the Tianjin passenger car tyre factory to investigate production processes. The tyre maker reports the visiting team carried out a thorough investigation and “partly confirmed that internal production standards were not strictly observed at the site.” In addition to the abovementioned product recall, Kumho has taken disciplinary action against the head of the Tianjin factory and those employees found to be involved in negligent quality control. All product-related claims will be dealt with “solely from the customers’ point of view,” the company adds.
South Korean tyre manufacturer Kumho has responded to Chinese news station CCTV’s claims that one of its Chinese factories uses a high proportion of rework rubber in tyre production. Amongst other things in the 15 March report, CCTV claimed that Kumho Tires’ own production standards were not being met at the Tianjin factory and that the rules were only adhered to when OE customers visited.
In a written statement sent to Tyres & Accessories in answer to questions about the reports, Kumho said it has “moved rapidly to implement a thorough internal investigation into the circumstances surrounding the report and expects to release the results of this process at the earliest possible date.”
Kumho Asiana Group, parent company of Kumho Tires, has announced it will donate 60 million yen (£473,000) for Japan’s recovery from the earthquake and tsunami damages. The 60 million will be divided equally and given to the three areas in which the company’s Asiana Airlines operates its services, namely Miyaki, Ibaraki and Fukushima. The South Korean company reports that executives and employees of Kumho Asiana Group affiliates voluntarily raised funds to help the Japanese “overcome despair and accelerate the country’s recovery,” and these funds were supplemented by the Group itself.
Chinese website gasgoo.com and other sources report Kumho Tires’ denial that tyres manufactured in one of its factories in China are unsafe. The tyre maker’s comments on the quality of its tyres follows an article aired by Chinese state television broadcaster CCTV on March 15. The CCTV report alleged that Kumho Tires used excess recycled rubber in the tyres manufactured at its Tianjin factory, a practice described as one that could lead to tyre safety and performance issues.
Kumho achieved its third rally victory in as many weeks on Saturday when Andy Burton and Robin Kellard won the Malcolm Wilson Rally in their Peugeot Cosworth. The Subaru Impreza of Roger Chilman and Andrew Sankey finished second overall and the Mitsubishi Evo IX of Stephen Petch and John Richardson finished eighth, meaning Kumho-shod cars filled three of the top 10 places on this popular event. Kumho’s European Motorsport manager Steve Thompson said: “Andy is clearly on a roll and our gravel tyres once again proved to be the best rubber for the job. We will continue to look after our growing number of runners to the best of our ability and hope the season continues as successfully as it has started.”
Four of the top ten finishers at the GMF Motor Factors Wydean Forest Rally on 12 February were shod with Kumho R800 gravel rally tyres, the Korean manufacturer reports. They included the Peugeot Cosworth of Andy Burton and Robin Kellard, which took the top podium spot, and the Mitsubishi Evo IX of David Wright and Michael Wilkinson that was fourth overall and first in class B13.
Kumho Petrochemical aims to exit the debt workout programme it has undertaken for the past year by the end of 2011, and to help boost its economic viability the Kumho Asiana division intends to sell the million or so shares it holds in Kumho Tires. “As part of a consistent move, we will sell all stakes of Kumho Tire owned by us from July, to help strengthen financial soundness,” said Kumho Petrochemical chairman Park Chan-koo.
Creditors of South Korea's Kumho Asiana Group, parent company of Kumho Tires, are said to be considering selling a 1.46 trillion won (₤818.8 million) stake in Daewoo Engineering & Construction Co Ltd held by the group's affiliates via a block trade. Group company Kumho Industrial Ltd holds 14.6 per cent of Daewoo Engineering & Construction and other units own the remainder, and the sale of a 24.7 per cent share in the contractor, as reported by Reuters, would join a number of other restructuring efforts aimed at aiding the cash-strapped company.
Kumho Tire USA is raising its prices on some of its rannge by an as-yet undisclosed amount on 1 March. Kumho said increases will affect all passenger, light truck/SUV and medium truck tyres. The company concluded its statement by saying the exact details of the increase "will be provided to our clients in the near future.”
Official Kumho Tires sources have shed further light on the company’s sponsorship activities. Tyres & Accessories reported yesterday on the company’s yet to be finalised plans to increase its football sponsorship activities in Europe through a premium partnership deal with a team in Germany’s Bundesliga. We also stated Kumho’s intention to withdraw from the Formula 3 Euro Series at the end of the 2011 season. According to official information subsequently received, at this point in time no firm decision has been made regarding Kumho’s commitment to the championship following the current season. Official negotiations for the 2012 Formula 3 Euro Series will commence soon. The tyre maker is still considering its sponsorship options in Europe, and these apparently include both motorsport and other sporting codes, such as football.
Preliminary annual figures released by Kumho Tire show a sizable increase in sales during 2010. The Korean tyre maker reports global sales of US$2.305 billion in its home market and export markets outside North America last year, a 36 per cent year-on-year increase. Sales within the North America region amounted to $770 million, up 29 per cent on 2009. Taken as a whole, Kumho Tire gives a preliminary figure of $3.075 billion for its global 2010 sales, a year-on-year increase of 34 per cent.
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