AKRON—Group Michelin came out on top in the global tire tug-of-war last year—with an assist from the Asian economic crisis—edging out Bridgestone Corp. as the world's largest tire maker, based on 1998 sales. Michelin's return to the top—with an estimated $12.9 billion in 1998 worldwide tire sales—was due largely to swings in currency values last year. While the Japanese yen fell about 8 percent against the U.S. dollar, compared with its 1997 value, the French franc slipped only about 1 percent.
Making the situation even more difficult to gauge, Bridgestone's tire sales—estimated at $12.6 billion last year—actually grew at a faster pace than Michelin's from 1997 to 1998: 10.4 percent compared with 8.6 percent, when expressed in the firms' respective reporting currencies (yen and francs).
Goodyear also was affected by the Asian and Latin American economic doldrums, as its global tire sales fell nearly 5 percent—or $500 million—with currency-related reporting accounting for the bulk of the drop.
Despite the decline, Goodyear's No. 3 global ranking never was in jeopardy, since its sales of $11.3 billion were more than twice those of No. 4 Continental A.G.
For fiscal 1999, Goodyear will pull closer to Michelin and Bridgestone due to the inclusion of three or four months of sales by the company's new joint ventures with Sumitomo Rubber Industries Ltd. in North America, Europe and Japan.
Starting in fiscal 2000, when the Dunlop ventures are fully consolidated, Goodyear likely will leapfrog to the head of the pack, with annual tire sales of nearly $14 billion.
However, considering Bridgestone's annual growth rates of the past few years and Michelin's open-ended acquisition strategy in Asia, it's not inconceivable that either, or both, of these competitors could reach the $14 billion mark as well.
In the past year, Bridgestone outearned and outspent its major competitors, both in total dollar amounts and as a percentage of sales. On an operating basis, Bridgestone's earnings of $1.78 billion represented 10.4 percent of sales, matched only by Cooper Tire & Rubber Co.'s 10.6-percent performance.
Continental, which has devoted considerable resources of late to building its non-tire automotive business, has turned up the wick a bit on its tire activities, acquiring about $450 million worth of annual tire sales through its purchases of Euzkadi in Mexico and Gentyre Industries Ltd. in South Africa.
Sumitomo, the perennial No. 5 worldwide, may relinquish that spot next year to Pirelli S.p.A., depending on how much of its fiscal 1999 sales are consolidated with Goodyear's.
Michelin, Bridgestone and Goodyear together account for 55 percent of the global tire industry, and the Top 10 tire makers take 80 percent.
As for the remainder of the global Top 75, China's Shandong Triangle Group Co. Ltd. climbed eight places to 18th on the strength of 32-percent growth in 1998. The performance of Shandong Triangle and other Chinese firms was aided by the relative stability of the Chinese renminbi to the U.S. dollar.
New to the rankings this year are:
Belshina, the only tire maker in the former Soviet republic of Belarus, debuting at 54;
Pensler Capital Corp., the financial holding company that owns Denman Tire Corp. and Canada's United Tire & Rubber Co.;
Russia's Moscow Tire Works;
Galaxy Tire & Wheel Co., a U.S.-based ``contract manufacturer'' that contracts out production of farm, off-the-road and industrial tires to a dozen tire manufacturers around the globe, but carries out its own research and development and participates in the design and materials selection of its tires; and
Firestone East Africa Ltd. of Kenya.