Kumho eyes growth in North American OE, aftermarket

Don't be surprised if you start to see a few more Kumho tires on new vehicles, bigger vehicles and even those electrified models.

Because that's all just part of the plan. One that involves better focusing R&D and manufacturing to leverage those high-value spaces. You know: OE, SUV and EV.

And it's a growth plan that keeps North America in focus for Kumho.

"The North American market is definitely essential for Kumho Tire, as it is or should be for all global tire manufacturers that have a presence (there), because the market is one of the largest and the most trend-leading ones," Il Taik Jung, Kumho Tire Co. Inc. president and CEO, told Rubber News. "In this crucial market, we have a vision to ultimately be recognized as one of the top tier 2 tire manufacturer brands."

There also happens to be some good reason for the timing behind the plan to do that.

Coming out of the COVID-19 pandemic, Kumho experienced immense growth as the industry returned to a sense of normalcy. In 2022, for instance, the tire maker saw a 35 percent growth in revenue year-over-year, giving it a solid foundation for further growth in 2023, according to Jung.

"This impressive performance can be attributed to various factors, including strong growth in sales volume in key global tire markets and the recovery of global factory operations," Jung said. "Before we moved forward further, we got started to refine and enhance our product lineup at first.

"Based on this, we allocated our products by each production site by considering the manufacturing cost and the price of each product. By doing this and selling more, we could maximize our factory operating rate. By normalizing our ordinary operation, we could have the room to dig into the premium market, such as SUVs and EVs with (larger-rim-diameter) products and focus on these markets."

That momentum carried the tire maker into 2023 with high hopes, and it helped quite a bit in what turned out to be a quieter year for the industry overall, a year where destocking cycles played out on a global scale.

But as that's happened, Kumho kept its sights set on moving forward, in part by working to grow its OE market share. And it's done so by building on the strides it already made technologically.

"We have strengthened our development and production capabilities to meet the balanced performance required by the OE market such as low rolling resistance—high grip products for all vehicle types," Jung said. "Through this heightened attention to technical capability, we have established a reputation for supplying high-quality products into the market."

And it was in the OE space that Kumho dodged some of the worst that came in the aftermath of the pandemic, particularly relating to the semiconductor supply chain snarls that led to production stoppages. Because Kumho, Jung said, was focused on OE in the SUV segment.

And those high-value, in-demand products were prioritized for those precious microchips. That was a win for Kumho, of course, but it also was a boon for its growth potential.

"We focused on sourcing SUV projects from various car makers over the past several years, and as a result, we have been able to minimize the negative impact of supply chain constraints and external factors to achieve growth in the OE market each year," Jung said. "In the future, we plan to focus on securing new business in line with market trends such as the growth of the EV segment."

To do that, Kumho is investing in the technologies that leverage efficiency to increase speed to market and design tools that unlock optimal EV performance across key metrics such as rolling resistance and noise reductions.

Most recently, that investment has taken shape in digital modeling and virtual tire development.

"Kumho Tire's proprietary Virtual Tire Development technology allows digital tires to be designed and tested virtually, allowing for prototyping and fine-tuning before proceeding to physical testing," Jung said. "In the future, Virtual Tire Development and real-time data will be combined with artificial intelligence and advanced analytics technologies that are already offering a wide range of possibilities for making accurate real-time predictions and improving tire and vehicle performance."

As Kumho grows, it's keeping an eye on North America in particular. It's a region where the tire maker intends to compete more heartily with investments in those critical growth segments, such as larger-rim diameter tires and those designed especially for EVs.

And all of that starts with messaging. Clear and concise messaging.

"To make it come true, our product and brand strategy of the business in North America has been to instill confidence in our products and also in our partnership with our dealers down to the consumer, and this will continue," Jung said. "Especially, for the next several years, our priority targets ... will be that we make the message clear that Kumho is a manufacturer that develops high performance products and is a 'player' in the light truck space."

That message, of course, is backed by action.

Kumho has worked closely with its dealers to ensure they have the tools they need to deliver that message, but also to ensure that dealers can provide the kind of feedback that allows Kumho to design the products consumers—North American drivers—need.

That's important, Jung said, because North American consumers know exactly what they want.

And if Kumho can do that—figure out how to meet the expectations of those finicky North American drivers—it can meet the expectations of just about any driver or any market anywhere in the world.

"North America is unique in a way for the industry," Jung said. "Tire brands are accepted by dealers and consumers no matter what country they are bred from, so it enables each consumer to make a choice that fits for their situation. Which means the market is basically a completely free competition market. Thus, I believe, if we can be successful in the market, that means we should be successful in any other markets in the world as well."

So, what is it that North American drivers want?

Well, just about everything. They want tires that are going to last longer and ride comfortably—and in the case of EVs, more quiet than ever before.

Moreover, they want all of that at a value price.

And that's exactly what Kumho intends to deliver.

"In North America, mileage is still No. 1 on the consumer's list," Jung said. "People equate the mileage to value. (And,) while mileage is first on the list, the tire must also perform in all seasons. Therefore, there must be a balance of performance in all weather conditions including sunny (dry), rain (wet) and snow. Tires must also ride comfortably and be quiet."

Yes, Kumho intends for its tires to do all of that—and do it all more sustainably in the end.

The tire maker can achieve that by building tires that last longer, extend mileage/improve fuel economy and use more sustainable (recycled and bio-based) materials.

And if it can do that and serve the North American market in those key market segments, Kumho will be well-positioned for growth, not just in this region, but across the globe.

"North America has the fastest growing market for high rim diameter tires which, Kumho believes, have better values for future growth," Jung said. "Additionally, the North American market space has the largest EV consumer base, which aligns with another key strategy of ours as we have and will continue to develop high performance products in this arena."