After billions of dollars spent and millions of man-hours devoted to make, promote, distribute and sell their products, the world's top tire makers find themselves largely where they were a year ago in terms of who's the largest.
The pecking order for Rubber & Plastics News' 2015 Top 75 tire makers ranking from largest—Bridgestone Corp. for the seventh straight year—through No. 17—Apollo Tyres Ltd.—is unchanged from the 2014 ranking.
The first change in the ranking this year came at No. 18, where South Korea's Nexen Tire Corp. advanced from 22nd on the 2014 ranking as other companies in the $1.7 billion to $1.9 billion range suffered sales drops.
Overall, more than half of the companies reported lower sales in their respective 2014 fiscal years, which together with the impact of a strengthening dollar against most major currencies led to a drop of about 3.5 percent to leave the market just shy of $180 billion.
Bridgestone's estimated tire-related sales of $26 billion put it comfortably ahead of Michelin's $24.7 billion and Goodyear's $16.4 billion, according to research by Tire Business, a sister publication of RPN.
The rankings place tire makers based on their revenue from the sale of tires they've manufactured, excluding sales of non-tire products, such as auto-service-related revenue at company-owned retail stores, sales of steel cord, synthetic rubber or carbon black to third parties.
Bridgestone, Michelin, Goodyear and Continental A.G., for example, report tens or even hundreds of millions of dollars in revenue from their respective captive retail networks, and Bridgestone, Michelin and Goodyear derive some revenue from the sale of synthetic rubber or other raw or semi-processed materials to third parties.
Bridgestone's position at the top is solidified by its minority ownership holdings in two other Top 75 companies—a 43 percent ownership stake in Turkey's BRISA/-Bridgestone-Sabanci Tire Mfg. (No. 35 with 2014 sales of $739.5 million) and a 15 percent stake in Finland's Nokian Tyres P.L.C. (No. 19 with $1.75 billion in sales).
Six of the companies ranked in the top 10—Michelin, Goodyear, Pirelli & C. S.p.A., Hankook Tire Co. Ltd., Maxxis International and Zhongce Rubber Group Co. Ltd.—reported lower sales in their own home reporting currencies, and the non-U.S. companies also faced currency swings that devalued their reported sales figures.
Overall, 11 of the 20 publicly traded companies outlined in these rankings reported sales declines in 2014 compared to 2013.
Collectively, the top 10 tire companies accounted for 63 percent of the world's tire sales last year, based on the rankings numbers, essentially unchanged from a year ago, the first time in several years that the top tier has maintained its market share compared to the rest of the world's tire makers.
Continental was comfortably positioned at No. 4 with sales of $11.9 billion, ahead of the remainder of the Top 10: Pirelli, Sumitomo Rubber Industries Ltd., South Korea's Hankook, Japan's Yokohama Rubber Co. Ltd., Taiwan's Maxxis Inter-national/Cheng Shin Rubber Industrial Co. Ltd. and China's Zhongce Rubber Group.
There were no significant mergers/acquisitions during the past year that affected the rankings.
The pending acquisition of Pirelli by China National Chemical Corp. likely will not impact next year's ranking, but ChemChina's plan to combine Pirelli's commercial tire activities with its own would carve out about $1.6 billion in revenue from Pirelli's ledger. That would put Sumitomo Rubber and Hankook Tire in position to challenge for fifth and sixth and the combined ChemChina/Pirelli truck tire business looking for a spot among the top 15.
The U.S. dollar-denominated sales figures are based on average annual currency exchange figures, in order to avoid unusually high or low exchange rates at year-end.
New to the rankings this year are:
• Prinx Chengshan (Shandong) Tire Co. of Shandong, China—formerly known as Cooper Tire Shandong (Chengshan) Co. Ltd.—No. 32 with sales of $844.9 million;
• Weifang Yuelong Rubber Group of Qingdao, China—No. 43 with sales of $527.9 million;
• Camso Ltd. of Magog, Quebec, Canada—the former Camoplast Solideal Inc.—tied for No. 47 with estimated tire-related sales of $500 million;
• Shandong Zhongyi Rubber Co. Ltd. of Dawang, Shandong, China—No. 51 with sales of $468.2 million; and
• Altai Tyre Kombinat of Barnaul, Russia—No. 69 with estimated sales of $142 million.
In addition, Qingdao Yellow Sea Rubber Co. Ltd. of Qingdao, China, reappears on the Top 75 list at No. 75 with sales of $100.9 million.
Dropping out of the ranking this year were:
• Shandong Deruibo Tyre Co. Ltd. of Guangrao, China, after filing for bankruptcy during 2014;
• Xinjiang Kunlun Tyre Co. Ltd. of Xinjiang, China, acquired by Double Coin Holdings Ltd.; and
• Magna Tyres Group of the Netherlands; General Tyre & Rubber Co. of Pakistan Ltd. of Pakistan; Tianjin United Tire & Rubber Co. of China; and Inoue Rubber (Thailand) Co. Ltd. of Thailand. They were displaced by new companies with larger sales volumes.
There are 29 Chinese companies in the 2015 ranking—including five among the top 20—along with 10 from India, five each from Taiwan and the U.S., four from Japan, three each from Russia and South Korea, two each from Italy and Turkey, and one each from Argentina, Belarus, Czech Republic, Finland, France, Germany, Indonesia, Iran, Singapore, Thailand and Vietnam.
Average operating earnings ratio among the 20 largest tire makers was 12.3 percent, down slightly from the 12.5 percent registered last year after two straight years of measurable growth.
All but three of the companies reported gains in operating income; one of the three, Titan International Inc., reported an operating loss.
Nokian Tyres P.L.C. and Continental's tire division were the most profitable, percentagewise, with 22.2 and 18.7 percent operating ratios.
The average net income ratio for the group of 20 was 7.4 percent, up nearly 2.5 percentage points over the 2013 average. Only five of top 20 firms registered lower net income last year vs. 2013 and only one—Titan—was in the red.
The average sales per employee for the dozen publicly traded companies that provided employment data was a few dollars shy of $240,000.
Nokian Tyres had the highest sales per employee at $431,835, ahead of Nexen Tire at $405,105, Cooper Tire & Rubber Co. at $385,632, Toyo Tire & Rubber Co. Ltd. at $343,396 and Titan International Inc. at $291,615.