Lee Min-hyung joined The Korea Times in 2014 and has worked as a journalist mainly in Korea’s finance, tech and automotive industry. He specializes in content creation, breaking news and in-depth analysis currently on transportation and mobility. You can reach him via mhlee@koreatimes.co.kr.
Korean tire makers shift strategic focus to Europe amid US tariffs
Hankook Tire's factory in Clarksville, Tenn. / Courtesy of Hankook Tire
By Lee Min-hyung
Korea's three major tire manufacturers — Hankook Tire, Kumho Tire and Nexen Tire — are under growing pressure to restructure their global supply chain to focus on Europe and non-American markets to minimize the impact of impending U.S. tariffs, industry officials said Wednesday.
U.S. President Donald Trump announced an executive order on April 2 to slap a 25 percent tariff on vehicles imported to the United States. Starting May 3, the same rate will apply to tires.
Industry officials said tire makers are unlikely to make major investments in expanding production lines in the U.S. for tariff exemptions, as it remains unclear how long the tariff policy will remain in place.
“Trump’s tariff policy is drawing strong backlash even in the home territory, and few can guarantee whether the drive will persist for a long period of time,” a tire industry official said.
“Against the backdrop, it is desirable for tire firms to diversify their sales channel, rather than spending an enormous amount of money on establishing more manufacturing facilities there.”
Europe and the U.S. are the two largest export markets for the tire firms, so they are advised to focus on increasing their tire sales in Europe rather than becoming preoccupied with tariff-related uncertainties in the U.S., the official said.
“On top of that, building new production lines there also comes with other risks stemming from a number of factors, such as labor unions and high U.S. labor cost,” the official said.
Kumho Tire's U.S. manufacturing facility in Georgia / Courtesy of Kumho Tire
Demand for premium and value-added tires is on the rapid rise in Europe amid the growing popularity of SUVs and electric vehicles (EVs).
Large tires with more than 18 inches are typically considered value-added tires whose margin is much higher than other product lines. Tires specially designed for EVs also offer better margins.
Hankook Tire’s sales in Europe accounted for 41.3 percent of its total revenue last year, while sales in North America reached 27 percent. Nexen Tire is also heavily reliant on sales in Europe, where its sales reached 39.8 percent during the same period. Europe also accounted for 26.4 percent of Kumho Tire’s total sales in 2024.
However, as the U.S. remains a key strategic market for tire firms, they are also moving to maximize their production abilities in their existing factories there. Hankook Tire plans to increase tire production capacity for its Tennessee factory from 5.5 million to 12 million by the end of this year.
Kumho Tire also operates a production line in Georgia with a manufacturing capacity of 4.5 million tires annually. Nexen Tire, which does not have any manufacturing facility in the U.S., aims to tackle the tariff risk by increasing its sales in Europe and other emerging markets.