TOKYO-Despite an increase in replacement and export market shipments of tires, Yokohama Rubber Co. Ltd. said it was disappointed by low profits for fiscal 1996, ended March 31. The Tokyo-based tire maker reported consolidated net income of
$5.3 million on net sales of $3.7 billion for the period.
This compares with net income of $20.9 million and sales of $3.8 billion in 1994, the last year-end figure reported by the company. Yokohama said a year-to-year comparison would be misleading because it changed its fiscal year in March 1995.
Sales of tires, which account for 70.9 percent of the company's net sales, reached $2.6 billion, the company said, and were impacted by lower original equipment tire sales for the second straight year.
Although the company said it experienced a ``marked increase in sales of studless tires,'' changes in its distribution system and sales of low-priced products hurt profitability.
``Although shipments of replacement tires and tires for export increased, we were not able to gain the profits expected, owing to adverse margin conditions in the replacement market,'' the company said.
Its U.S. subsidiary, Yoko-hama Tire Corp., ``faced adverse market conditions and a rapid increase in material costs,'' the company said. It expects the U.S. operation to return to the black in 1997.
``In addition, to improving profitability in the face of rapid changes taking place in the replacement market in Japan, we are concentrating on strengthening our marketing by introducing products based on new technologies and integrating the activities of our subsidiaries,'' the company said.