AKRON—After years of leapfrogging past each other to claim the title of world's largest tire maker, Bridgestone Corp. and Group Michelin finished fiscal 1999 in a virtual dead heat.
Goodyear placed third in Tire Business' annual global ranking, based on sales revenues from tires.
Goodyear, with tire-derived sales of $11.5 billion last year, did not move up in the ranking, despite its highly publicized purchase of the Dunlop North American and European tire activities from Sumitomo Rubber Industries Ltd. of Japan.
Though announced in February 1999, the deal did not take effect until Sept. 1, so only four months of the Dunlop units' sales are included in Goodyear's 1999 results.
However, even if the Dunlop acquisition had been included for the full year, Goodyear still would have lagged behind Bridgestone and Michelin, though by a narrow margin.
In a pro-forma accounting, consolidating the Dunlop acquisition on a full-year basis, Goodyear's direct tire-related sales would have been $13.2 billion in 1999, vs. $13.5 billion each for Bridgestone and Michelin, based on sales data provided by the companies.
Mid-year 2000 reports from all three companies indicate the race for No. 1 will be equally as close this year.
Goodyear claims No. 1 status in terms of tires produced. The company made more than 200 million units last year, a 6.8-percent increase over 1998. The Dunlop acquisition added more than 40 million units of new capacity to Goodyear's ledger on an annualized basis.
Comparable figures for Michelin and Bridgestone are not available.
Changes in the values of international currencies played a measurable role again this year in determining the ranking order. Bridgestone, especially, benefited, since its sales in yen actually were slightly lower in 1999 than in 1998, but recalculated into dollars, the 1999 sales figure is slightly higher than 1998's.
The rest of the top 10 stayed the same as the past several years. For 2000, though, it's certain that Sumitomo Rubber Industries Ltd. will drop at least a couple of rungs down the pecking order, as its tire sales—now limited to Asia—likely will settle in the $1.7 billion to $1.8 billion range.
>From a profitability standpoint, Bridgestone and Cooper Tire & Rubber Co. out-earned their major competitors based on operating and net earnings, respectively.
Bridgestone's operating earnings of $2.08 billion last year topped the list both in straight earnings standpoint and in earnings ratio: Its $2.08 billion in pre-tax profits was equal to 11.4 percent of sales, putting it ahead of Cooper's 10.9 and Pirelli's 10.5 percent.
Cooper's 6.2 percent net profits/sales ratio was the best among the top dozen companies.
Overall, the estimated size of the global tire market grew by about 3.5 percent to $69.5 billion, more than 80 percent of which is in the hands of the 10 largest tire makers. The Big 3 (Michelin, Bridgestone and Goodyear) now each control about 19.5 percent of the global tire industry.
In a study of the world tire market, Germany's Deutsche Bank A.G. said it expects still further consolidation, as the major players seek to spread their sales footprints more equally around the globe. The bank's analysts expect the five largest tire makers to spend more than $3.5 billion to increase their collective market share by about seven percentage points.
There are 10 new faces among the 75 tire companies in this year's ranking, due to consolidations, currency devaluations in several key countries, and, in some cases, either the lack of reliable information or the availability of new or revised corporate information.
The newcomers to this year's ranking are:
Kerman Tire & Rubber of Tehran, Iran, which ranked No. 40 based on 1998 sales of $148.8 million. 1999 sales were unavailable.
Compania Hulera Tornel S.A. de C.V. of Mexico City, Mexico—No. 56. The last remaining independent Mexican tire maker, Tornel returned to the list for the first time in several years, based on 1999 sales of $94.5 million.
Jiangxi Tyres of Jiangxi, China, which debuted at No. 60 with estimated sales of $67 million.
Govind Rubber Ltd. of Ludhiana, India—No. 67. Initially a maker of bicycle tires only, Govind has expanded in recent years into light truck and farm/industrial tires, generating sales of $61 million in 1999.
Societe Tunisienne des Industries du Pneumatique (STIP), of Sousse, Tunisia—No. 68. Formerly minority-owned by Pirelli S.p.A., STIP took over the only other Tunisian tire maker, Sonap, a few years back and has grown to sales of $56.6 million in 1999.
The companies in the final six spots on this year's Top 75 advanced into the ranking by virtue of others falling out. They are:
Xiamen Rubber Factory in Xiamen, China.
Silverstone Tire & Rubber Co. Sdn. Bhd., Kamunting, Malaysia.
Weida (Wuxi) Rubber Group Co. Ltd., Wuxi, China.
Metro Tyres Ltd., Ludhiana, India.
Voltyre, Volzhsky, Russia.
General Tire Morocco, Casablanca, Morocco.
Among the companies no longer listed are: Mexico's Compania Hulera Euzkadi and South Africa's Gentyre Industries Ltd., both acquired in 1998 by Continental A.G.; the Ukranian tire makers Dniproshina and Rosava for which reliable sales data no longer were available; Russia's Moscow Tire Works, Kirov Tyre Co., Voronezhshina, and Barnaul Tire, all knocked out by the falling value of the rouble; and China's Guilin Tyre Co., whose sales were surpassed by other companies this year.
At least two other companies not in this year's ranking also bear mentioning—retread system supplier Bandag Inc. and off-the-road/industrial tire distributor Galaxy Tire & Wheel.
If all purchases of Muscatine, Iowa-based Bandag-brand retreads were added together, it would come to about $900 million, Bandag stated in its 1999 annual report—a sales volume greater than all but 11 of the world's new-tire makers. On its own, Bandag sold $103 million worth of retreads last year through its TDS unit.
Malden, Mass.-based Galaxy Tire reported sales of $65 million last year for its Galaxy-brand OTR and industrial tires, produced under contract by various tire makers, including Dunlop Africa Ltd. of South Africa and Tofan Group of Romania.
The companies in this year's Top 75 make their headquarters in 29 different countries. China is home to 18 of the 75, followed by eight Indian tire makers, seven from the U.S., six from Japan and five from Taiwan. Other countries with multiple entries are Malaysia, Russia and South Korea, with three each, and Italy, with two.