Imported tire sales surge
They tend to opt for imports when replacing old tires despite the improved quality of domestic brands.
According to the Korea Customs Service, overall tire imports climbed from $290 million in 2007 to $440 million in 2011.
Meanwhile, 105,037 cars were imported last year, surpassing 100,000 units for the first time.
“As foreign car sales have grown, so has demand for imported tires,” said Song Jin-u, a manager at Bridgestone Tire Sales Korea.
“Those who drive luxury vehicles such as BMWs tend to replace the originals with identical [brand’s] tires.”
Distributor Michelin Korea said its tire sales grew from 78.7 billion won ($69.2 million) in 2008 to 115.9 billion won in 2011.
Michelin is the bestselling foreign tire brand in the country.
Bridgestone Tire Sales Korea, the No. 2 foreign tire brand here, has also seen its sales grow by double digits in the last few years, rising from 34.6 billion won to 47.9 billion won over the same three-year period.
Most of the imports are used for replacement purposes.
“The replacement tire market is certainly growing, albeit slowly,” said Baek Joo-hyun, a spokesman at Michelin Korea.
The popularity of foreign tires despite their hefty price tags seems largely due to a lack of public awareness of what else is on offer, which leads many drivers to rely on dealers’ recommendations or stick to what they have.
According to Michelin Korea, Primacy MXV4 225/55 R17-inch tires sell for $165 at the Tire Rack Web site but cost considerably more in Korea, selling for 219,200 won ($192) on Naver. They are also costlier than domestic tires of the same size.
The quality of domestic tires has improved considerably in recent years and they are used by many global automakers as original equipment tires, meaning they are installed in their new cars.
Hankook Tire, the country’s leading tire maker, said recently that it would provide high-performance tires for BMW’s new 3 Series.
Hankook is also supplying its products to Audi, Volkswagen, Toyota, Ford and General Motors.
Kumho Tires, the runner-up in the country, will also supply its tires for the 3 Series later this year.
Kumho’s clients already include Mercedes-Benz, Volkswagen, Chrysler, General Motors and Ford.
Nexen Tire, the smallest of the three tire manufacturers in the country, also signed a contract to supply to Fiat. This marks the first overseas original equipment contract for Nexen.
Nexen only produced replacement tires until a few years ago because these offer higher profit margins, but it is now expanding its lineup of original equipment tires.
“Short-term profits will be small in the next three to four years, but they will lead to higher sales in the future when replacements get added in,” said Lee Jae-yup, a spokesman for the carmaker.
By Limb Jae-un [firstname.lastname@example.org]
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