Nexen lays the foundation for future growth
Nexen Tire reported that in the third quarter of 2024, it generated revenue of 708.5 billion won ($510 million), up 2.3% from the same period in 2023. Operating profit was 52.3 billion won ($38 million).
The company notes that the turnover of around 700 million won has been maintained for two consecutive quarters, and its growth in July-September 2024 was mainly due to the fact that the company increased sales in Europe by 11.9%.
According to Nexen's statement, the secondary European market saw high demand for winter tires during the peak seasons of the second and third quarters of 2024, and sales in the primary equipment segment remained stable despite a decline in the automotive sector, thanks to the expansion of supplies to premium vehicle manufacturers and increased brand recognition through various marketing initiatives, such as sponsorship of the English football club "Manchester City".
The launch of the second phase of Nexen at the beginning of the year is expected to have a full impact on the company's results next year. Currently, the plant in the Czech Republic continues to increase production volumes, and the full capacity launch is scheduled for the end of 2025.
In the third quarter, the share of high-margin products, such as tires with a diameter of 18 inches or more, accounted for 35.9% of Nexen's sales, which is 3.9 percentage points higher than a year earlier. According to the company, this growth "reflects the effectiveness of the strategy aimed at meeting the demand for tires for crossovers and premium vehicles". Currently, Nexen is increasing its focus on the production of tires with a diameter of 18 inches or more, and the plant in the Czech Republic will play a crucial role in this.
In the OE sector, the company began supplying seven new car models, such as the Kia EV3 and Renault Grand Koleos, during the third quarter, increasing their total number to 118. In the field of R&D, the tire manufacturer continues to digitally transform the product development process by expanding the use of artificial intelligence and virtual reality technologies.
"Having achieved revenue of over 700 million won for two consecutive quarters, we have laid the foundation for future growth," said Travis Kang, CEO of Nexen. "In the future, we plan to continue meeting market expectations, increasing production in Europe and constantly investing in research and development".