(ATTN: ADDS background in last 3 paras)
SEOUL, Dec. 5 (Yonhap) -- Kumho Tire Co., the South Korean unit of Chinese tiremaker Qingdao Doublestar Co., said Wednesday it began to supply tires to the BMW G30 5 Series model from October.
Kumho Tire will deliver the high-performance ECSTA PS91 tires for the BMW G30 5 Series for the duration of its production, the company said in a statement. The cars are being manufactured at the carmaker's Dingolfing plant in Bavaria in the form of original equipment (OE) tires
Supplying OE tires to car manufacturers does not generate much revenue for tiremakers but securing big companies as clients helps improve their brand images and can lead to the raising of product prices down the line.
For tiremakers, it is more profitable to sell replacement equipment (RE) tires in after-sales markets.
Kumho Tire currently supplies tires to global carmakers, such as BMW, Mercedes-Benz, Volkswagen, Skoda and Fiat Chrysler Automobiles.
It operates six plants globally -- three overseas ones in Georgia of the United States, Vietnam, and China, and three domestic ones in Gwangju, Gokseong and Pyeongtaek.
In 2017, the six plants had an overall output capacity of 54.64 million tires but produced 48.29 million tires.
This year, Qingdao Doublestar acquired Kumho Tire by investing 646.3 billion won (US$578 million) in a 45 percent stake of the country's second-biggest tiremaker after Hankook Tire Co.
In the January-September period, Kumho Tire's net losses deepened to 159.21 billion won (US$143 million) from 59.91 billion won a year earlier.
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