Expanding Global Tire Market: "K-Tires Should Target the Electric Vehicle Replacement Market"

Over 70% of Domestic Tire Companies' Revenue Comes from Exports
Expanding Market Share and Restructuring Production Bases and Raw Material Sourcing Capabilities

Hankook Tire Laufenn X FIT AT2

The competitive landscape of the global tire industry is rapidly changing due to the shift to electric vehicles, the smartification of vehicles, intensifying protectionism, and strengthened environmental regulations. Analysts say that for domestic tire companies to reach the very top tier globally, they must target replacement and high-inch electric vehicle tires while also reorganizing production bases and raw material sourcing systems to align with new trade and environmental regulations.

On September 2, Samjong KPMG released a report titled “K-Tires Preparing to Land in the Global Top Tier” outlining these findings.

According to market research firm Statista, the global automotive tire market is projected to grow to 176.2 billion dollars (approximately 242 trillion won) by 2027, up about 40 percent from 125.9 billion dollars in 2022. Notably, while original equipment (OE) tires correlate with new car sales, replacement (RE) tires are expected to achieve stable growth as vehicles age and the total number of registered cars worldwide increases.

Korean tire manufacturers also have a high dependence on the global market. Over the past four years, the export share of the five companies that produce and sell tires domestically has remained above 70 percent. The global standing of the three major K-tire firms—Hankook Tire & Technology, Kumho Tire, and Nexen Tire—has also increased noticeably. From 2021 to 2024, the global market share of these three companies continued to expand, and their OE supply range has broadened from premium vehicles to mainstream brands.

However, the report pointed out that gaps still exist compared to the global top tier in terms of market share, the share of premium OE supply, and brand value. The competition for a top-tier position has intensified, as companies ranked fifth through eighth globally by 2024 revenue—including Hankook Tire, Pirelli, Sumitomo Rubber, and Yokohama Rubber—are now in direct competition.

The report proposes four strategic tasks for K-tire companies to bridge the gap with the global leaders and maintain their expanded market share: the electric vehicle RE market, the high-inch tire market, glocal (global and local) production bases, and raw material sourcing frameworks.

First, for the electric vehicle RE market, securing “customer touchpoints” was identified as essential. As electric vehicle adoption rises, so does demand for tire replacement. However, automotive manufacturers could potentially dominate RE customer engagement by enabling vehicles to predict tire replacement timing and connect directly to service centers.

Therefore, the report emphasizes that K-tire companies should deploy differentiated customer asset strategies by distinguishing between first-time replacement and repeat replacement customers. For first-time replacement customers, companies should expand customer touchpoints through diverse distribution and service channels. For repeat replacement customers, offering benefits that incentivize recurring purchases through their own channels can help accumulate valuable purchasing data.

In the high-inch tire market, the report suggests strategies to bypass traditional competitive frameworks. Expanding OE supply to emerging automakers can help circumvent established barriers, and in key markets like the United States and Germany, leveraging the expertise of personnel at independent tire dealers will help expand consumer reach.

Meanwhile, for production, the report recommends a glocal strategy that appropriately combines local and domestic manufacturing. Although local production is increasingly important amid rising tariff barriers in major markets such as the United States and the European Union, producing all output locally is unrealistic and inefficient. The report also underscores the importance of responding to environmental regulations like the EU Deforestation Regulation (EUDR).

Park Kyungho, Executive Director at Samjong KPMG, emphasized, “With the simultaneous advent of electric vehicle transition, smartification of vehicles, rising protectionism, and tighter environmental regulations, now is a turning point where the competitive order in the tire industry can be reshaped.”

This content was produced with the assistance of AI translation services.