AKRON—The global tire industry got bigger last year—13 percent bigger—with Michelin leading the pack.
The estimated size of the business grew to $127 billion, based on surveys of the world's leading tire makers and analysis of available data. And Michelin edged out Bridgestone Corp. for the top spot—$21.8 billion to $21.5 billion.
The Top 75 ranking is based on a firm's tire manufacturing-related revenue.
Estimates for non-tire sales from companies' captive retail store organizations are factored out to give a clearer apples-to-apples comparison with companies that don't have retail holdings.
Michelin claimed the No. 1 ranking almost entirely on the swings in currency values. The company's sales in euros grew 3 percent from 2006, while Bridgestone's tire-related sales rose more than 12 percent.
Michelin's revenue in dollars was aided by an 8.2-percent change in the euro-dollar exchange from 2006 to 2007, while the yen-dollar exchange rate changed only about 1.2 percent from year to year.
Bridgestone, however, could lay claim to No. 1 if its share of sales from the firm's minority-held subsidiary in Turkey—Brisa Bridgestone Sabanci Tire Mfg.—were included in the Tokyo-based company's total. Brisa, which sells both the Bridgestone and its own Lassa brands, ranked 30th with sales $571.2 million.
Bridgestone also owns a minority share of Finland's Nokian Tyres P.L.C.—which had $1.19 billion in tire sales in 2007—and obtains some Bridgestone-brand tires from Nokian under contract.
The next 11 spots in the ranking were unchanged from 2006, with Goodyear, Continental A.G. and Pirelli & C. S.p.A. rounding out the top five.
Conti's $7.5 billion in tire sales last year, an increase of about 5 percent over 2006, included five months of revenue from Matador A.S. Conti bought majority control of the Slovak Republic-based company during the year.
The first change in the ranking is at No. 14, where China's Triangle Group Co. Ltd. moved ahead of fellow Chinese tire maker Hangzhou Zhongce Rubber Co. Ltd.
There are now a dozen companies with sales of more than $2 billion and nine more with sales of $1 billion-plus. One of those, China's GITI Tire Co. Ltd., would be in the $2 billion club if its share of sales by its affiliate, Indonesia's P.T. Gajah Tunggal—No. 28 with sales of $625.2 million—were included in GITI's total.
New to the ranking this year are Dunlop India Ltd. (No. 40), Sichuan Haida Tyre Group Co. Ltd. (No. 59) and Tianjin United Tire & Rubber Co. (No. 66). Due to disappear from the ranking next year will be Matador, ranked 46th for its estimated partial-year sales of $245 million.
Dunlop India, ranked 40th, is making a return to the Top 75 after a several-year absence as the firm went through bankruptcy and now is operating under new ownership.
The owner, India's Ruia Group, also acquired two other Indian tire companies—Falcon Tyres Ltd. and Monotana Tyres Ltd.—and now has a tire operation that accounted for more than $400 million in sales in 2007.
Twelve of this year's Top 75 are Chinese companies, followed by 10 from India, eight from the U.S., five each from Japan and Taiwan, four from Russia, three each from South Korea and Iran, and two each from Indonesia, Italy and Turkey.
For the most part, 2007 was a profitable year for the majority of tire makers, with only two of the top echelon—Kumho Tire Co. Inc. and Titan International Inc.—reporting losses. The average operating earnings/sales ratio for the top 20 tire makers was 8.4 percent, up from 6.1 percent in 2006 when three companies were in the red.
Among the top 20 tire makers, Nokian Tyres P.L.C., Conti and Cheng Shin/Maxxis International were the most profitable on an operating basis, with operating profits/sales ratios of 22.8, 16.2 and 14.6 percent, respectively.
Nokian also was the most profitable on a net basis at 16.5 percent, followed by Cheng Shin/Maxxis and Nexen Tire Corp. at 13.2 and 6.8 percent, respectively.
Toyo Tire & Rubber Co. Ltd. topped the rankings in terms of sales per employee, at $431,209, followed by Nokian at $404,301.
The average sales per employee of the 20 largest tire makers was $226,967 last year, up 6.4 percent from $212,338 in 2006.