Unbelievable speculation: Kumho to withdraw from China?
News that Kumho Tire would possibly need to relocate its factory out of Nanjing, in China’s Jiangsu Province, first broke some six weeks ago, and the Chinese officials have now confirmed their decision. Kumho received word from the Nanjing Environmental Protection Bureau on its decision that it, along with 172 other companies in Nanjing, must move elsewhere. Chinese media sources, such as those reported by gasgoo.com, state Kumho’s Nanjing factory has “long since” been marked by the municipal government as one of the city’s “most polluted factories,” although details of offences are not given. Orders to cease production at the plant have already been given.
According to older news reports, Kumho has been looking for a new location for its 15-year old Nanjing plant for at least two years now; the reason given for this search for a new site was a lack of expansion opportunities at the existing location. This then gives a situation in which Kumho Tires is compelled to leave a site it already intended to replace.
Yet gasgoo.com shares that “many in the industry” speculate Kumho will retreat from the Chinese market. This, however, seems more than unbelievable, as the Korean manufacturer produces around half of its 60 million tyres per annum in its three Chinese factories, a quarter of which were manufactured in Nanjing. Other prior news reports hinting that Kumho is interested in “starting again” in China with a different product brand are also difficult to comprehend, even though the manufacturer and its products have been at the centre of negative official media coverage in China.
In particular, the Korean manufacturer attracted negative headlines after it became known that levels of so-called ‘rework rubber’ used in the production of new tyres at its Tianjin factory (opened in 2006) were allegedly too high. Initial denials from Kumho were soon replaced by a tearful apology on Chinese state television. A short time later the company’s Korean headquarters stated these alleged quality problems affected tyres “only” intended for the Chinese market; such comments have turned Kumho Tire into something of a pariah in the eyes of some Chinese observers.