Strategic Expansion in the Face of Trade Uncertainty

In a proactive move to mitigate potential risks associated with a possible return to Trump-era trade policies, Korea & Company is significantly boosting its production capabilities within the United States. This decision aligns with a broader trend of companies adjusting their strategies in response to evolving global trade dynamics. The company’s chairman, Cho Hyun-bum, highlighted the importance of preemptive measures in navigating the uncertainties of the current geopolitical landscape.

This strategic shift comes on the heels of Hyundai Motor Group‘s recent declaration of a substantial $20 billion investment in its US operations,signaling a growing commitment to the American market among Korean automotive and related industries. The expansion by Korea & Company underscores the tire industry’s sensitivity to potential tariff impositions and the desire to secure a competitive edge within the US market.

Doubling Down on US Manufacturing

Korea & Company has revealed plans to dramatically increase the output of its Tennessee plant. Tire production is set to surge from 5.5 million units to 12 million annually, while battery production will double to 1.5 million units. This expansion is a direct response to the possibility of increased tariffs under a future Trump administration, aiming to insulate the company from potential trade barriers [[1]].

The decision to bolster US production reflects a broader trend of companies seeking to establish or expand their manufacturing footprint within the United States to avoid potential tariffs and capitalize on the growing demand for domestically produced goods. This strategy is notably relevant considering discussions surrounding global tariffs, which could significantly impact the cost of imported goods [[1]].

Focus on High-Value Tire Segments

A key element of Korea & Company’s strategy involves increasing its market share in the high-margin tire segments, specifically those designed for Sports Utility Vehicles (SUVs) and electric vehicles (EVs). Hankook Tire, a subsidiary of Korea & Company, is actively targeting the global electric car tire market with its dedicated ‘Aion’ brand. Currently, only a select few global tire manufacturers, including Hankook Tire and Kumho Tires, operate specialized tire brands for electric vehicles.

The emphasis on SUV and EV tires reflects the evolving automotive market, with SUVs continuing to dominate sales and electric vehicles experiencing rapid growth. By focusing on these segments, Korea & Company aims to capitalize on the increasing demand for specialized tires that offer enhanced performance, safety, and efficiency for these vehicle types.

Battery Production Expansion and AGM Battery Focus

In addition to tires, Korea & Company is also doubling its battery production capacity at the Tennessee plant. The company is a prominent player in the lead-acid battery market, which are commonly used as auxiliary batteries in vehicles. Lead-acid batteries accounted for approximately 70% of korea & Company’s total sales last year, highlighting their significance to the company’s overall business.

Moreover, Korea & Company plans to establish a production system capable of manufacturing 5 million units of its premium ‘AGM Battery’ by 2030. AGM (Absorbent Glass Mat) batteries are a type of lead-acid battery known for their enhanced performance, durability, and safety features. This investment underscores Korea & Company’s commitment to innovation and its focus on providing advanced battery solutions for the automotive market.

Chairman Cho has been strategically investing in local factories since 2018, based on a thorough analysis of the US finished car market. korea & Company stands out as one of the few domestic companies in the lead-acid battery sector with a North american production base, positioning it favorably to serve the growing demand for batteries in the region.

Global Distribution network Expansion

Beyond its US manufacturing investments, Korea & Company is also expanding and strengthening its product distribution network in key markets across Asia and the Pacific. This includes Australia, Taiwan, Indonesia, Malaysia, thailand, and Vietnam. This strategic move aims to diversify the company’s revenue streams and capitalize on the growth potential of these emerging markets.