CHANGCHUN, China—Kumho Tire Co. Inc. will build a passenger tire plant in Changchun—its third in China—over the coming 18 to 24 months at a cost of $150 million.
Kumho will partner with Chinese car maker FAW Group Corp. to finance the plant, although Kumho said it will contribute up to 90 percent of the funding.
The new facility, expected to be on-stream by the first half of 2007, will have a capacity of 3.1 million tires a year, Kumho said.
The company only recently broke ground on a $185 million plant in Tianjin, which will have annual capacity of 5 million passenger and light truck units when it comes on stream in 2007 and 12.5 million units annually over the long term.
The firm also recently completed an expansion of its 7-year-old Nanjing plant, doubling annual capacity to 11 million units by constructing what amounts to a second factory on the facility´s grounds.
The new plants will expand Kumho´s annual capacity in China to about 30 million units by 2007-08.
Sae-Chul Oh, Kumho president and CEO, said earlier this year the company intends to become the No. 1 replacement brand in China by next year, targeting a 15-percent passenger tire market share by then.
FAW Group—FAW stands for First Automotive Works—makes cars under its own brand names and has manufacturing partnerships with Germany´s Volkswagen A.G. and Japan´s Toyota Motor Corp.
It has existed since 1953 and last year sold more than 1 million vehicles, generating $1.8 billion in sales.