Bridgestone Reviews Europe

Bridgestone Corporation has told the Financial Times that it is reviewing its European operations with a view to increasing production in this area. “We are undertaking a study of what might be built and where,” said Bridgestone Europe’s chairman and chief executive, Minekazu Fujimura.

According to the business newspaper, Europe accounts for 12.5 per cent of Bridgestone’s global sales, which are expected to be to total more than $17 billion last year for 2004. Bridgestone is suggesting that any new manufacturing capacity will be located in Central or eastern Europe. Any future move will be made in response to the regions low labour costs and fast-growing car markets, factors that also prompted the company to double production in Poland. In addition Bridgestone is establishing a new proving ground, training and research centre near Rome, which is due to be completed in Spring 2006. Bridgestone currently runs five plants in Europe – three in Spain, one in France and one in Poland.

Mr Fujimara explained that moving to Eastern Europe also involves something of a pay-off. “Affordability is an issue for western tyre makers seeking to grow sales there – they are behind on technology but lower on prices,” said the Bridgestone executive.

Bridgestone says it believes it is “breakthrough time” for run-flat tyres. At least three major new volume-built car models will be launched this year with run-flat tyres specified as standard, said Des Collin, Bridgestone’s commercial vice-president. While the contracts for the first volume car application – the new Mini – have gone to Pirelli and Goodyear, Bridgestone has won contracts with BMW for its One Series small car. Bridgestone expects sales of its run-flats to rise by 50 per cent this year to 1.5 million Mr Collin added.