This represents a 10.5% increase in revenue and a 69.5% increase in operating profit compared to the same period last year.
NEXEN TIRE’s growth in 2Q24 was driven by higher sales volume and improved product mix. Revenue grew across all regions compared to the same period last year, particularly in Europe, where sales volume increased ahead of the peak winter tire season. The expansion of original equipment (OE) tire supply also continued since the first quarter.
The operating profit was influenced by the ramp-up of the Europe plant’s second phase, which has been stabilizing since 1Q24, increased sales of high-inch products, and strategic cost management, such as raw materials and shipping.
In the second half, the effects of the expansion of European plant are expected to be realized. The second phase of the European plant, which began operations earlier this year, is anticipated to increase its operation rate and expand production of high-inch products, driving NEXEN TIRE’s continuous growth.
However, the volatility of raw material costs, such as rubber, and high shipping costs due to the Red Sea crisis are expected to have an impact on earnings in 2H24.
NEXEN TIRE’s newly expanded European plant is recognized as one of the most advanced in the world, featuring cutting-edge automation. Logistics automation and real-time integrated control, combined with the digitalization of production information applied to all processes, have improved production efficiency. The plant also strives to be safe and environmentally friendly, with facilities to prevent fire hazards and odors.
Since 2016, NEXEN TIRE has been steadily expanding its OE supply to European automakers. In the last quarter, it also began supplying OE for Baidu’s commercially successful robotaxi Apollo RT6. Additionally, NEXEN TIRES plans to supply OE tires for newly developed EVs in collaboration with various automakers including Jeep and Dodge.
NEXEN TIRE aims to enhance its global brand recognition and secure stable replacement tire (RE) demand by expanding OE supply to premium car brands.
Meanwhile, NEXEN TIRE is also committed to ESG management, having received a ‘Gold Medal’ rating in May from EcoVadis, a global ESG evaluation agency, ranking in the top 3%.
“Our continuous efforts to enhance product quality and technological capability, aligned with the expectations of global customers, are showing results.” commented a NEXEN TIRE representative. “We will continue to strive to provide premium product experiences to more customers.”