AKRON (Aug. 30, 2012)—Total tire revenue for the world's 75 largest tire manufacturers rose 22 percent in 2011 from the previous year, much of it a continuation of higher wholesale selling prices spurred on by rising raw material costs.
Unit sales, however, showed low or no growth for the period, most of the major tire makers reported in their most recent fiscal accounts. Combined sales for the companies reached $187.5 million, according to figures complied in the annul Rubber & Plastics News ranking of the top 75 global tire manufacturers.
Fiscal year 2011 marked the second straight year the tire industry showed 20-percent-plus growth, after the market plateaued in 2008 and 2009. The increases continued through the first half of 2012, with some of the world's largest tire makers reporting double-digit revenue growth collectively through mid-year despite lackluster unit sales.
Bridgestone Corp. retained the top spot in the tire company ranking for the fourth straight. The Japanese company's tire sales rose about 7 percent in 2011 from the previous year to $28.5 billion, despite the turmoil caused by the East Japan earthquake in May.
Michelin continued at No. 2, edging closer to Bridgestone with roughly 12-percent higher sales of $27.4 billion.
No. 3 Goodyear's sales jumped nearly 21 percent to $20.5 billion—twice that of No. 4 Continental A.G.'s tire businesses.
Pirelli Tyre S.p.A., Sumitomo Rubber Industries Ltd., Yokohama Rubber Co. Ltd. and Hankook Tire Co. Ltd. retained their Nos. 5-8 rankings from the past several years' lists. Yokohama's sales are pro-forma for the year since Yokohama transitioned to a calendar year fiscal year from a March 31 year-end accounting.
That meant Yokohama's fiscal year consisted of just nine months of results. To keep the rankings relevant for comparison, the ranking presents a pro-forma 12-month year using what Yokohama reported and adding sales from the January-March 2011 period.
Among the top dozen firms, Taiwan's Maxxis International/Cheng Shin Rubber Co. Ltd. moved up one spot to ninth on the strength of a 30-percent jump in sales, to $4.26 billion, supplanting Cooper Tire & Rubber Co. Likewise, South Korea's Kumho Tire Co. Inc. regained the No. 12 ranking ahead of China's Hangzhou Zhongce Rubber Co. Ltd.
Toyo Tire & Rubber Co. Ltd. solidified its ranking as 13th through its acquisition last year of Malaysia's Silverstone Bhd. ($140 million in annual) sales and a 75-percent stake in Silverstone's affiliate, Shandong Silverstone Luhe Co. Ltd.
GITI Tire Pte. Ltd., the Singapore-based Chinese tire maker, moved up one spot on the ranking to 14th with sales of $2.9 billion. The firm's sales are augmented by more than $1 billion in revenue from P.T. Gajah Tunggal Tbk., the Indonesian tire maker in which GITI owns a 49.8-percent stake.
If the firms' sales are considered together, GITI Tire would be ranked 10th, between Maxxis International and Cooper Tire. It should be noted, though, that roughly 12 percent of Gajah Tunggal's $1.24 billion in sales last year, or about $150 million, were for Michelin, which owns a 10-percent stake in the Jakarta-based company.
Likewise, Bridgestone's sales scope is enlarged by its 43-percent ownership stake in Turkey's BRISA/Bridgestone-Sabanci Tire Mfg. (No. 34 with 2011 sales of $896 million) and a 19-percent interest in Finland's Nokian Tyres P.L.C. (No. 18 with $1.83 billion in sales).
Other major changes in the global configuration of the major players include Pirelli's move into Russia. The Italian tire maker created a joint venture with Russian Technologies State Corp. to take over assets from the former Amtel Holdings and Sibur Holdings worth about $430 million in annual sales.
Off-the-road and farm tire and wheel specialist Titan International Inc. jumped nine rungs on the Top 75 ladder to 27th on the strength of new sales derived from the former Goodyear farm tire assets in Latin America, which Titan took over in the first quarter of 2011.
There are 29 billion-dollar tire companies in the 2011 rankings and four more companies knocking on the door with sales greater than $900 million, according to an analysis of the available data.
The “Big 3” tire makers—Bridgestone, Michelin and Goodyear—collectively accounted for $76 billion in sales, or 40 percent of the estimated global total.
The 10 largest makers represent $125 billion, or two-thirds of the global marketplace.
New to the rankings this year are five Chinese companies: Shandong Hengfeng Tyre Co. Ltd.; Jiangshu Tongyong Tire Ltd.; Shanxi Suanxi Tyre Co. Ltd.; Haoyou Tire Co. Ltd.; and Xinjiang Kunlun Tire Co. Ltd. Additionally, Specialty Tires of America Inc. returned to the Top 75 after a few years' hiatus.
Dropping out of the ranking were: Societe Tunisienne des Pneumatiques; Artawheel Tyre Co.; Ralson (India) Ltd.; Poddar Tyres Ltd.; J.S.C. Rosava; and Guangzhou Pearl River Rubber Tyre Ltd. In each case, either larger companies took over their spot, or reliable financial information was unavailable.
From a profit standpoint, 2011 was solid for the 20 largest companies that provided fiscal sales and earnings data. The average pretax operating profit ratio for the 20 was 8.7 percent, up 0.7 point from 2010, and the average net income ratio was 4.6 percent, up more than a full point from 3.3 percent in 2010.
Only two companies in the Top 75, Kumho Tire and India's JK Tyre & Industries Ltd., were in the red in fiscal 2011.
Nokian Tyres generated the highest earnings from a ratio standpoint, recording operating and net income ratios of 26.1 and 21.1 percent. Maxxis International, Hankook Tire, Continental, Shandong Linglong and Pirelli also reported double-digit operating income/sales ratios.
There are 27 Chinese companies in the 2012 ranking—including five among the top 20—along with 11 from India, five each from the U.S. and Taiwan, four from Japan, three from Italy, Russia and South Korea, two each from Indonesia, Thailand and Turkey and one each from Argentina, Belarus, Czech Republic, France,