South Korean tire manufacturer Kumho Tire has announced plans to invest more than ₩1tn (US$750.8m) by 2027 to establish its first plant in Europe.
Kumho intends to increase its supply of tires to premium European auto makers. The new plant will have an annual capacity of 12 million units and will focus on manufacturing high-end tires, such as the Ennov line-up for electric vehicles.
Currently, Kumho supplies tires to Europe from its Vietnam facility, which has easy access to raw materials like natural rubber. However, disruptions caused by attacks by the Yemen-based Houthi Militia on ships entering the Red Sea through the Suez Canal have led to increased freight costs and delays in shipments.
The investment is a response to increasing demand from European auto makers like Mercedes-Benz and BMW, particularly in light of the shipping crisis.
“We are reviewing Romania, Serbia, Portugal and Turkey as potential locations for the plant,” Kumho president and CEO Jung Iltaik told The Korea Economic Daily. “We plan to complete the site selection process by the end of this year after checking subsidies and tax incentives from the federal and local governments.”
Kumho plans to align the factory with the European Union’s RE100 initiative, which brings together leading businesses committed to renewable electricity and which targets 100% renewable electricity by 2050.
Discussions regarding financing for the investment will be held with China’s Doublestar Group Co., Kumho’s largest shareholder.
