Friday, February 5th Hankook Tire announced the company’s 2020 financial results with consolidated global sales of KRW $6.454 trillion (around 7.4 billion CA$) and an operating profit of KRW $628 billion (around 722 million CA$). Despite COVID-19, global operating profit increased 15.5 percent year-over-year (YoY), achieving improved performance.
Amid a global economic slowdown due to the COVID-19 pandemic, Hankook Tire sustained qualitative growth with a yearly operating profit of 9.7 percent despite a marginal decline in sales revenue compared to the previous year.
Specifically, sales of high-inch tires—18 inches or higher—attributed to the growth as it accounted for approximately 35 percent of total sales of passenger car tires, up 3 percent YoY.
Another key contributing factor is the increase in replacement tires sales, profitable in regions. such as Europe and North America. Stabilization of raw material costs have also contributed to higher operating profit.
Hankook’s 2020 financial performance
The significance of Hankook’s financial performance in 2020 is complemented by the continued strategic application of the company’s global top-tier technology, and excellence in product quality, throughout the difficult year brought by the global pandemic.
Even during the first half of 2020 when the business performance was expected to suffer significantly due to a sharp drop in global demand for tires, Hankook managed to post an operating surplus.
The second half of the year began showing signs of quick recovery for the company, as sales increased in some of its major sales regions. In the fourth quarter, sales of replacement tires rose YoY, in regions such as Europe and North America. In China, sales of both original and replacement tires increased as sales of high-inch tires rose to 12 percent YoY amounting approximately 40 percent of total sales.
Furthermore, Hankook gained remarkable recognition for its technological excellence in 2020. In addition to receiving top ratings in several tire tests, from Germany and the United Kingdom, Hankook was ranked as the best-selling brand across three categories, all-season, summer and winter tires, in the European e-commerce platform, Tyre24, where the results were based on a consumer preference survey.
Hankook is also strengthening its standing as a premium brand by expanding its partnership with premium car makers, and the electric vehicle tire market, including the OE supply to Porsche’s first high-performance electric sports car, Taycan, and to Audi’s top model in the Q product line, Audi RS Q8.
This year marks the 80th anniversary for Hankook & Company. Hankook Tire has set the sales target at KRW $7 trillion (around 8 billion CA$) and plans to further solidify its brand value as a global top tier company by expanding sales of high-inch tires in major regions, supplying OE tires for premium cars, and by taking the lead in the electric vehicle market.
The company aims to continuously drive sustainable growth through optimizing distribution strategies for each region and diversifying the product portfolio based on its quality competitiveness.