Kumho promises shoddy tire recall; no date set
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A troubled South Korean tire producer, scrambling to draft detailed recall plans, said Tuesday they will take responsibility for all tires not up to quality standards.
The company, Kumho Tire Co Ltd, was under the media spotlight the last week, after CCTV revealed shoddy quality production processes on March 15, ironically the World Consumer Rights Day.
Lee Han Seop, chairman of Kumho Tire China, apologized to Chinese consumers Monday on a CCTV program.
However, consumers might have to wait a few more days before getting to know the detailed recall plans, according to the company Tuesday.
The issue stems from Kumho's factory in Tianjin, where CCTV secretly filmed staff producing new tires with unacceptably high amounts of recycled rubber, raising safety concerns.
The tire maker's stock price fell by 2.73 percent yesterday on the Korea Stock Exchange.
A handful of large automakers such as Hyundai's JV in Beijing, GM's venture in Shanghai, Shanghai PSA Peugeot Citroen and Anhui-based Chery Automobile use Kumho's tires.
"We haven't received a recall notification yet," a Beijing Hyundai dealership salesperson said yesterday. Kumho officials declined to share details on the recall plan.
A consumer rights group has been organized via Sina's microblog. "About 500 owners of Kumho tires have registered," Wang Xing, a lawyer with Beijing-based Huicheng Law Firm, told the Global Times.
This passive recall event will have a negative impact on Kumho sales, Huang Sihua, an automobile and transportation-consulting manager with Frost & Sullivan, told the Global Times.
Huang said that this incident might be also an opportunity for other domestic and international tire producers to pick up the market slack.
However, Kumho might not be the only problematic tire producer in China, Guo Cheng, an industry analyst with YongAn futures, a brokerage firm, told the Global Times.
