GLOBAL TYRE REPORT www.europeanrubberjournal.com Tyre industry recovered in 2010 IN THIS REPORT iii Top tyre makers iv Top 75 tyre makers - table vi Q3 profits start to grow again viii Imported tyres still break EU rules ix Pirelli sets out strategic goals xi JK Tyre plans investments in Americas Bridgestone has increased its lead at the top of the global tyre makers’ table. Goodyear continues to fall behind the top two, while Hankook, GiTi and other Asia-based tyre makers threaten the established rankings. By Bruce Davis, ERJ Staff, bdavis@crain.com The global tyre market last year rebounded from the recession of late 2008 and 2009, rising nearly 20 percent in value to an estimated $152 billion (€110 billion). This growth continued in the first half of 2011. Based on 2010 sales, Bridgestone Corp. retained the top spot over Michelin, Goodyear and Continental AG for the third consecutive year. In fact, none of the world’s top 11 companies changed position. Taiwan’s Cheng Shin <strong>Rubber</strong>/Maxxis International advanced to a virtual tie for ninth with Cooper Tire & <strong>Rubber</strong> Co., both at $3.36 billion in tyre sales. Cheng Shin reported a 13- percent rise in tyre revenue last year. Hankook Tire Co. Ltd may soon displace Japan’s Yokohama <strong>Rubber</strong> Co. Ltd from the No. 7 spot. The South Korean company posted 12-percent growth in revenue last year. More than half the gain in value came from price increases most tyre makers instituted in 2010, trying to stay ahead of upwardly spiralling raw material and energy costs. Twenty-five companies in the rankings had tyre sales above a billion dollars, up from 19 the year before. The billion-dollar club should add three or four members next year, according to growth monitored in the first half of 2011. The 10 largest tyre makers’ sales collectively topped $100 billion for the first time, up 17 percent from 2009. Bridgestone’s hold on the top spot is reinforced by its 44-percent ownership of xii New cords can help retreadability xiv China outlines policy direction for future xv Aeolus sets out Green strategy xvi Tyre industry investments continue to boom xix Tyre plants around the world xxix Who owns whom in the tyre world xxx Tyre plant cross-reference Turkey’s BRISA, No. 37 with $651 million in sales. Tokyo-based Bridgestone also owns a 19-percent stake in Finland’s Nokian Tyres Plc., No. 20 with $1.26 billion in tyre sales. A number of mergers and acquisitions concluded in the past year (or still pending) will affect the rankings next year and beyond. Pirelli’s agreements in Russia could see the Italian tyre maker take over manufacturing assets there capable of generating annual sales of $715 million by 2014. This development also will see Sibur Russian Tyre and Amtel Povolzhye Tire Complex JSC leave the rankings soon. Pirelli’s agreements also contain a provision for the company to tie up with Nizhnekamskshina R&D spending trends for ’10 through its Russian joint venture. Another major change is Titan’s purchase of Goodyear’s agricultural tyre business in South America and its pending acquisition of Goodyear’s agricultural business in Europe. Titan Chairman Maurice Taylor estimates the two purchases could generate $400 million in annual sales each, pushing the agricultural tyre specialist into the $1 billion-plus club. For Goodyear, the sale could reduce its annual sales by $500 million or more. Toyo Tire & <strong>Rubber</strong> Co.’s acquisition of Malaysia’s Silverstone Bhd. and majority control of Silverstone’s Chinese affiliate Shandong Silverstone Luhe <strong>Rubber</strong> Co. Ltd could add $250 million or more to Toyo’s annual sales. Higher profitability Tyre company earnings rebounded strongly from those in troubled 2009. The average operating income/sales ratio for the dozen largest makers doubled to 8.1 percent, while the net income/sales ratio for the largest companies showed a 10-fold increase to 3.3 percent over 2009. Four of the 19 companies monitored reported net losses in 2009, whereas in 2010 only one, Goodyear, was in the red. New to the global tyre company ranking this year are: China’s Shandong Sangong Tyre Co. Ltd, No. 42 with sales of $429 million; JSC Rosava, Ukraine, No. 70, $106 million; Xingjiang Kunlun Tire Co. Ltd, China, No. 72, $90.3 million; and Modi <strong>Rubber</strong> Ltd, India, No. 74, $78 million. Modi, acquired recently by Continental, won’t be part of the 2011 ranking. Falling from the list were: Dena Tire & <strong>Rubber</strong> Mfg. Co. Ltd, Iran, and Ralson (India) Ltd for lack of updated data; and GPX International Tire Corp., US, which was liquidated during the first quarter of 2010. The Top 75 companies are based in 25 countries. There are 24 companies from China, 10 from India, 5 from Taiwan, and 4 each from the US and Japan. ■ R&D % change % of Company spending* vs. 2009 sales Continental A.G. 1921.1 6.90% 5.60% Tire Division 215.4 5.60% 2.20% Apollo Tyres Ltd. 9 24.00% 0.50% Bridgestone Corp. 968.9 -0.70% 3.00% Tire Division N.A. — — Group Michelin 721.9 7.70% 3.00% Goodyear Tire 342 1.50% 1.80% Sumitomo <strong>Rubber</strong> 212.9 4.00% 3.10% Tire Division 185.1 9.10% 3.20% Pirelli & C. S.p.A. 198.3 9.20% 3.10% Tire Division 192.4 9.80% 3.10% Hankook Tire Co. Ltd. 175.2 8.90% 3.50% Yokohama <strong>Rubber</strong> 147.1 -4.00% 2.50% Tire Division N.A. — — Toyo Tire & <strong>Rubber</strong> 87.2 -8.90% 2.70% Tire Division N.A. — — Cheng Shin / Maxxis Intl. 50.7 14.30% 1.50% Kumho Tire Co. Inc. 48.5 -24.90% 0.20% Cooper Tire & <strong>Rubber</strong> 39.7 11.20% 1.20% Nexen Tire 18.9 17.10% 1.60% Nokian Tyres P.L.C. 16.8 5.80% 1.20% Titan International Inc. 6.3 -29.20% 0.70% JK Tyre & Industries Ltd. 5.3 46.10% 0.40% MRF Ltd. 3.8 13.50% 0.20% Note: * millions of dollars NOVEMBER/DECEMBER 2011 E U R O P E A N R U B B E R J O U R N A L iii
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