Korean tire makers raise prices in the US
The three largest Korean tire manufacturers — Hankook, Kumho, and Nexen — are raising prices in the US, as the increase in raw material costs and the 25% tariffs on auto parts imposed by Washington have significantly increased the companies' expenses, reports Business Korea.
According to industry sources, Kumho plans to increase the cost of its tires in the American market by the end of May, and Hankook and Nexen have decided to do the same next month. The extent to which the prices of tires from Korean brands will rise is still unknown and will depend on how the additional costs are distributed between manufacturers and dealers. Analysts predict that companies are likely to increase prices by around 10%.
"The scale of the price increase will likely be determined based on a comprehensive analysis of tariff rates, production capacity in the US [Hankook and Kumho have factories in the country], and competitors' pricing strategies," one expert noted.
The new tariffs will start affecting the performance of Korean companies starting from the second quarter of 2025, and there are concerns that they may reduce the companies' profitability. Although Hankook, Kumho, and Nexen all reported record revenue in the first quarter, their operating profit decreased due to the rise in raw material costs, including natural and synthetic rubber, and since the tariff factor has been added, the companies are expected to have weak financial results in the second quarter.
In 2024, the total sales of the three manufacturers in North America amounted to around $3 billion, and the new tariffs may create additional costs of $540 million. Hankook and Kumho's US plants account for approximately 40% and 25% of the companies' sales in the North American market, while Nexen relies entirely on exports, with sales in the region totaling $490 million.
Other tire manufacturers are also raising prices in the US, and Michelin products have already become 5-8% more expensive on the local secondary market, while Yokohama tires have risen in price by 10%. Additionally, it is expected that after the conclusion of new contracts, the cost of tires in the primary equipment sector will also increase.