Kumho Tire Co., Inc. Business Report FY ended Dec. 2013

Business Highlights

Highlights in FY2013

Financial Overview (Consolidated)

(in millions of won)
Dec. 2013)
Dec. 2012)
Rate of
Change (%)
Sales 3,698,541 4,070,643 (9.1) -
Operating income 345,935 375,346 (7.8) -
Net income 100,958 130,586 (22.7) -


-In November 2013, the Company announced that it started to supply the Ecsta HM tires for the Mercedes-Benz B-Class cars of Daimler AG. The size of the tire is 195/65R15. The company received Daimler's first order for the tires of Mercedes A-Class cars in 2007. Since then, Kumho Tires has supplied tires for the Mercedes-Benz Sprinter, Viano, Smart, Vito and G-Class. (From a press release, November 19, 2013)

-In October 2013, the Company started supplying its Solus KL21 tires for Daimler's Mercedes G Class vehicles. The tire size is 265/60R18. The Mercedes G Class vehicles will be sold in Germany, the U.S.A., Canada, Australia, Japan and other countries. (From a press release October 17, 2013)

<Renault Samsung>
-In April 2013, the Company announced that it will supply its Wattrun-brand, electric vehicle-only tires to Renault Samsung Motors (RSM) for the SM3 Z.E. The Wattrun 205/55R16 tires will be supplied to the automaker from October 2013 through 2018. In March 2013, Kumho Tire signed with the Korean Ministry of Environment, Renault Samsung, LG Chem and other companies memorandum of understanding to collaborate in the popularization of electric vehicles. The project is expected to stimulate creation of new business models leveraging the EV technology, including car-sharing programs and rental car business. (From a press release, April 10, 2013)

-In January 2013, the Company announced that its Ecsta V700 tires have been chosen for installation on the BMW MINI John Cooper Works GP (JCW GP) launched in December 2012. The tire size will be 215/40R17. Production of the MINI JCW GP for the global market is limited to 2,000 units. (From a press release, January 31, 2013)

Business Partnership

The Yokohama Rubber Co., Ltd. announced that its Board of Directors resolved on February 14 to enter into a master technological alliance agreement with South Korea's Kumho Tire Co., Ltd. The master agreement defines the framework and purpose, and facilitates further discussions for the details of the alliance. The agreement is the result of discussions between the two companies following the signing of a Memorandum of Understanding in November 2013. Yokohama Rubber's president and representative director, Hikomitsu Noji, said that the two companies aim to increase their competitiveness in the global tire market by jointly conducting research and development on the tire-related technologies of the future, including environmental technology. (From an article in the Nikkan Jidosha Shimbun on February 15, 2014)


R&D Structure

Facility Location Overview
Central R&D Center Yong-in,
-Year established : 2013
-Main R&D center
Kumho Tire America Technical Center (K.A.T.C) Ohio
-Year established : 1990
-Developing tires for the North American OEM market and the aftermarket
Kumho Tire Europe Technical Center (K.E.T.C) Birmingham
-Year established : 1997
-Developing high-performance tires for the European market
Kumho Tire China Technical Center (K.C.T.C) Tianjin
-Year established : 2006
-Developing high-performance tires for the Chinese and European markets

-On September 2, 2013, Kumho Tire opened a new research center in Yong-in, Gyeonggi-do. The new facility consists of a research building and a laboratory building with a total floor area of 22,823 square meters. The research center will serve as the company's major R&D base in its global development network. Engineers at the R&D center will engage in basic research and product development. Meanwhile, the company's existing R&D center in Gwangju will function as a performance-testing facility to handle inspection and quality management of finished products. The newly opened R&D center will also oversee Kumho's international research operations, including Kumho Tire America Technical Center (KATC) in Ohio, U.S.A.; Kumho European Technical Centre (KETC) in Mörfelden-Walldorf, Germany; and Kumho Tire China Technical Center (KCTC) in Tianjin, China. (From a press release, September 2, 2013)

R&D Expenditure (Consolidated)

(in millions of won)
FY2013 FY2012 FY2011
Amount 87,384 80,555 68,953
% of sales 2.4% 2.0% 1.8%

Investment Activities

Capital Expenditure

-During 2013, the Company invested a total of 216,959 million won in its three plants in Korea.

Capital Investment Plan

In October 2013, the Company announced that the Company will resume the plan for new tire plant in Georgia, USA. This new plant will be starting its production in 2016. The construction was started in 2008, however it had been suspended construction due to the financial difficulties of the Kumho Asiana Group. (From the pressrelease on October 17, 2013)