Yokohama Rubber reports record 2022

The Yokohama Rubber Co. Ltd. has reported record sales and earnings in its fiscal 2022 (January to December 2022) figures. Sales revenue increased 28.3 per cent over the previous year, to 860.5 billion yen (£5.338 billion; 6.009 billion euros; US$6.409 billion). Business profit increased 12.8 per cent to 70.1 billion yen (£434.864 million; 489.504 million euros; $522.164 million). Both sales and profit were record figures. However, due to profit from the sale of Yokohama Rubber’s headquarters building in the previous year and other factors operating profit was down 17.7 per cent to 68.9 billion yen.

Yokohama put the strong financial performance down to “a successful summer campaign for promoting sales of Advan-brand high-value-added products and vigorous business in of agricultural tyres and other off-highway tyres”.  Product price and mix improvements were another reason, as well as “notably strong sales gains in North America”.

In addition, the company’s sales of original equipment tyres increased as OEMS began restoring production volume post-pandemic and as Yokohama Rubber won new fitments in North America.

Yokohama Rubber also posted sales growth in replacement tyres. Heavy snowfalls in Japan in early 2022 stimulated sales of Yokohama Rubber’s winter tyres, and successful promotion of high-value-added products in overseas markets fuelled sales momentum in North America and in China and other Asian nations. Sales revenue in replacement tyres also benefited from price increases in several markets, though the contribution from price increases was less than planned in Japan.

Yokohama’s Tyres business continued to drive both sales and profitability, with the company’s Yokohama Off-Highway Tyres business accounting for roughly a fifth of overall “Tyres” performance. Indeed, the company posted record-high sales revenue and business profit in its Yokohama Off-Highway Tires unit (which includes the former ATG [Alliance Tire Group] segment). That strong performance reflected success in asserting the cost competitiveness of the unit’s Indian-produced tyres through North American and other sales channels and success in securing price increases for the unit’s products.

Looking forward, Yokohama’s management projects that full-year sales and earnings will again attain record-high levels in fiscal 2023 results. Its projections suggest there will be 4.6 per cent increase in sales revenue, to 900.0 billion yen; a 4.2 per cent increase in business profit, to 73.0 billion yen; and a 6.0 per cent increase in operating profit, to 73.0 billion yen.

Passenger car electric vehicle OE wins

In 2022, efforts to expand sales of OE tyres for use on premium cars and electric vehicles (EVs) resulted in Yokohama tyres becoming OE on several new models from leading automobile makers, including Mercedes-AMG’s first EV; BMW M GmbH’s high-performance models; Toyota Motor Corporation’s Lexus LX and Lexus RX; the new Nissan Z from Nissan Motor Co., Ltd.; and Subaru Corporation’s EV, the Solterra.

In 2023, Yokohama aims to boost the sales ratio of its high value-added tyres to 47 per cent. In order to achieve that, Yokohama has begun supplying Advan Apex V601 tyres as OE for Toyota Motor’s new GR Corolla, and it also plans to launch new Advan tyres for EVs.

Future off-highway and truck tyre growth

In the off-highway tyre (OHT) business, considered a key driver of future growth, YOHT began production ahead of schedule in August at its new Visakhapatnam Plant in India. The truck and bus (TBR) business continued to improve the supply capability of its Mississippi Plant in the United States, achieving record high production volume at the plant in 2022. In addition, the company invested to expand production of ultrawide base 903W tyres and all-season BluEarth 711L tyres at the company’s Mie Plant.

In 2023, the OHT business will operate the Visakhapatnam Plant at full capacity and proceed with the second stage of the plant’s expansion. The company also is making an additional investment to expand production of truck and bus tyres including tyres for light trucks at its Mie Plant in Japan. The investment will add 100,000 tyres to the plant’s annual production capacity.

Meanwhile, Yokohama plans to export a greater proportion of its overall tyre production for sale international markets than for at least the last sixe years. In 2022, Yokohama exported 179,000 tonnes of tyres, up from 179 million the year before. In 2023, Yokohama is planning to both increase its overall tyre production volume and increase the proportion destined for sales in non-Japanese markets. As a result, Yokohama expects to sell 198,000 tonnes of tyres in oversea markets this year.

Finally, with the off-highway business particularly significant to Yokohama, and with Yokohama’s acquisition of Trelleborg Wheel Systems set to complete in the first half of 2023, it will be interesting to see what impact that has on the YOHT, Yokohama Tires and indeed the final Yokohama Rubber balance sheet.