No Korean tires “made in Serbia” after all? – Kumho Ture might have to postpone plans for European factory

After the launching of the manufacture of Chinese and Japanese tires in Serbia, in May, news spread that one of the biggest South Korean tire manufacturers, Kumho Tire, might choose Serbia for the opening of its first European factory.

As eKapija reported at the time Kumho was considering another two European countries in addition to Serbia for an investment worth more than USD 703 million.

– We have narrowed down the candidate locations for our European factory to Poland, Serbia and Portugal and are actively evaluating them – said Kumho Tire CEO Il-taik Jung in April.

Kumho initially planned to complete the construction of its first European tire factory in the next two years, but after the May fire at the factory in Gwangju, which destroyed a large part of the facility, that investment is most likely to be postponed.

As the Korea Times reports, Kumho Tire’s plan to build a manufacturing facility in Europe seems to be losing momentum after the tiremaker’s management effectively conceded to its union in their latest factory relocation agreement.

Kumho Tire’s management initially sought to have the relocated Hampyeong factory produce up to 3 million tires each year, in an apparent move to push for a dual expansion into Europe with the proposed European plant.

At that time, the union expressed strong opposition, fearing job losses due to the new overseas production line. Union workers urged the management to guarantee that the relocated domestic plant’s annual manufacturing capacity reaches 6 million.

After months of discord, both sides reached a final agreement last month, under which the relocated plant will handle production for some 5.3 million tires each year, starting in 2028.

Management also agreed to resume one tire production line in Gwangju by the end of this year with a daily capacity of 6,000 units.

This may delay the company’s planned expansion into Europe, as it requires significant capital from Kumho Tire to realize their promise with the union, according to industry officials.

– Kumho Tire needs to make a huge investment for the establishment of the new factory in Europe, but the problem is how to source capital at a time when it has to fulfill the pledge for the domestic production relocation, which also requires at least some one trillion won (USD 719.4 million) – a tire industry official said, the Korea Times reports.

Kumho currently has eight tire factories located in South Korea, China, USA and Vietnam, and the factory in Europe would be a ninth in the portfolio of the tire conglomerate which has been operating since 1960 and is present in over 160 countries of the world.

Kumho Tire produces a wide range of tires for various vehicles, including cars, vans, trucks, and even fighter aircraft.

B. P.

Kumho Tire

Korean tires

tire factory in Serbia