30-percent-cheaper Chinese tires flood Korean market

[Photo by Yonhap]

Chinese commercial vehicle tires continue to increase their market share and are increasingly dominating the South Korean commercial vehicle tire market as cost-conscious drivers, particularly those who drive for a living, start prioritizing affordability.

According to the Korea Tire Manufacturers Association (KOTMA), about 442,000 light truck tires (LTRs) were imported from China between January and April 2024, accounting for 93.3 percent of all imported LTRs. Considering that the total distribution of domestic and imported LTRs in Korea during this period was about 1.68 million, Chinese tires held a 26.2 percent share of the overall market. The share of Chinese tires in the Korean LTR market has been steadily increasing, from 12.8 percent in the first four months of 2022 to 19.1 percent in 2023.

The primary reason Chinese LTRs are making inroads into the Korean market is their affordability. Korea’s popular 1-ton trucks, the Hyundai Porter and Kia Bongo, require six tires (two front and four rear), for example. While replacing these with Korean tires costs nearly 500,000 won ($365), replacing them with those made in China costs around 300,000 won.

[Graphics by Song Ji-yoon]

For medium and large trucks and buses, which are often used for long-distance travel, the perceived price difference is even more significant. For a typical 5-ton truck with 19.5-inch wheels, a Korean tire replacement costs about 300,000 won per tire, whereas a Chinese tire costs about 150,000 won, or half the price. The economic advantage of purchasing Chinese tires is even more pronounced for vehicles with more wheels, such as dump trucks and trailers.

However, global brands are showing little interest in the Korean commercial vehicle tire market as it is less profitable than the passenger car tire market.

“Commercial vehicle tires have a high proportion of raw material costs, which means manufacturers incur losses if material costs rise,” an industry insider explained. “Chinese brands are filling the gap left by global brands.”