Kumho Tire managed to increase its quarterly sales and profits

Korea's Kumho Tire announced a successful completion of the third fiscal quarter of the year and profit from increased demand for replacement tires in global markets, including the US and China.

The Korean tire maker's operating profit for the quarter was 43.9 billion won ($36.6 million), up 176.1% from the same period last year.

Kumho Tire's third-quarter sales reached 595.9 billion won ($538 million), up 1% year-on-year and 27.4% higher than in the second quarter of 2020.

As Kumho Tire notes, increased demand for replacement tires in key markets including the US, Europe and China helped boost quarterly sales, while operating profit rose on lower fixed costs due to falling raw material prices and recovery in production performance.

In addition, sales of 18-inch tires and above accounted for 33.4% of Kumho's total third-quarter sales, up 1.7% from last year. These tires are more expensive, which had a positive impact on the company's financial results. In addition, deliveries of Kumho tires for new vehicles affected quarterly results. Kumho Tire recently signed contracts to supply OE tires for new Volkswagen Group models, including Skoda.

“We are seeing a rebound in sales in the second half of 2020 and we will continue to maintain a surplus as demand for our products grows in both domestic and foreign markets,” a Kumho Tire spokesman said. "We plan to increase the competitiveness of our products by expanding sales of larger tires in key markets, as well as supplying tires for new premium vehicles."