Kumho Tires Co (Kumho Tire), a Korean tires manufacturer and one of the largest tire suppliers in China, lost much of its market shares after a quality scandal, Beijing-based Securities Daily reported on Sept 13.

The State-run China Central Television (CCTV) reported this March that Kumho Tire used excessive amounts of recycled rubber as raw materials at its Tianjin factory, which diminishes its safety guarantee.

Sales plummeted from April to May in some regions of South China and in some cities the sales dropped 30 to 40 percent after the report. In Nanjing, Kumho Tire’s profits reached -64.06 million yuan ($10.03 million) in the first half of the year, the largest amount of deficit among foreign multinational firms, Securities Daily reported.

Li Jianan, an industry analyst of CIC Consulting, told the reporter that Kumho Tire has dominated more than 20 percent of the market share in passenger vehicle tires. After the scandal, its market share plunged, opening the opportunity for other firms to access to the market.

Double Coin Holdings (Anhui) Warrior Tire Co Ltd has already made its move. French tire maker Michelin has become a strategic investor in Double Coin, according to Securities Daily. – China Daily