The China factor weighed in on this year's Tire Business Global Tire Company Rankings. The three behemoths of the world's tire business-Group Michelin, Bridgestone Corp. and Goodyear-retained the top spots in the rankings, based on 2002 sales.
But the rise to prominence of a dozen-plus Chinese tire companies caused the trio's dominance of world tire sales to fall slightly to 56 percent.
Overall, the size of the global market rose 3.1 percent to an estimated $70.6 billion, with growth by the Chinese firms accounting for much of that increase. The shift in value between the dollar and other currencies accounted for a portion as well.
Michelin retained the No. 1 spot it grabbed from Bridgestone last year, recording a slight gain in tire sales to $13.8 billion on the strength of currency fluctuations. The French company's sales volume rose 3.5 percent, but revenues in euros fell 0.8 percent from 2001.
Bridgestone ranks No. 2 again, with global tire sales of $13.5 billion, a 0.9-percent gain over 2001. Goodyear's global tire sales slipped slightly to $12.3 billion, largely on sales losses in North America.
Goodyear claims world leadership in tire production, with 214.3 million units in 2002. This output, though, was 2.3 percent lower than in 2001, which in turn was 1.8 percent below 2000. Goodyear's first half 2003 production fell 0.8 percent shy of 2002.
The biggest changes to the rankings this year are the rise of South Korean tire maker Kumho Industrial Co. Ltd. to ninth from 10th-ahead of Japan's Toyo Tire & Rubber Co. Ltd., despite a 2-percent sales gain by Toyo-and of Taiwan's Cheng Shin/Maxxis International to 12th from 14th.
Both Kumho and Cheng Shin/Maxxis have growing Chinese operations, which contributed greatly to their double-digit sales increases. In Cheng Shin/Maxxis' case, its Chinese operations accounted for more than half of the firm's $646.5 million in sales last year.
No. 11 Hankook Tire Co. Ltd., the last of the billion-dollar tire makers, boosted sales 12.5 percent over 2001 to $1.3 billion, coming up just shy of unseating No. 10 Toyo. At mid-year 2003, Hankook's sales were 14 percent ahead of 2002.
China is represented in this year's Top 75 rankings by 16 companies with combined sales of $3.45 billion, up about 15 percent from 2001. The largest, Shandong Triangle Group Co. Ltd., is 13th on the global ranking, but it could be supplanted next year by Grandtour Tire Group, a growing collection of tire companies under the direction of Singapore's Grandtour Tyre Pte. Ltd. (See story on page 10.)
Future rankings could change because of three notable occurrences in the tire sector last year: Michelin's deal to buy a 10-percent stake in Hankook; Bridgestone's purchase of an 18.9-percent share in Finland's Nokian Tyres P.L.C.; and Continental A.G.'s acquisition of minority shares in Malaysia's DMIB Bhd. and Sime Tyres International (M) Sdn. Bhd.
The Michelin-Hankook deal was portrayed at the time of its signing earlier this year as an expansion of the agreement of companies cooperating on Michelin's Pax extended-mobility tire-wheel system. But the contract calls for far more, according to analysts who cover Hankook. (See separate story on page 9.)
Bridgestone's deal with Nokian will provide it with access to Nokian's extensive distribution network in the Nordic countries. It also opens a possible door to Eastern Europe through Nokian's manufacturing and distribution deals in Russia and other former Soviet Bloc nations.
Conti's arrangement with the Sime Darby tire companies gives the German firm a manufacturing and distribution foothold in Asia, up to now the weakest link in its global production activities.
For 2002, Michelin and Sumitomo Rubber achieved the highest operating earnings ratios among the 11 billion-dollar tire companies, at 7.8- and 7.1-percent, respectively. The average among the top 11 companies was 4.3 percent, with two companies-Goodyear and Kumho-reporting pretax losses.
Hankook also took top net profit ratio honors, at 3.8 percent, just ahead of Michelin's 3.7 percent. The average for the eight companies that were in the black was 1.8 percent. (Goodyear, Pirelli and Kumho were in the red.)
There are six new companies making the Tire Business ranking this year:
* Lion Group Bhd., the Kuala Lumpur, Malaysia-based holding company for Silverstone Tire Co. Ltd. and Dong Feng Lion Tyre of China, debuting at No. 43 with sales of $136.5 million. Silverstone previously had been ranked on its own merits.
* Shandong Linglong Rubber Co. Ltd. of Zhaoyuan City, China, at No. 45 with sales of $133.8 million, up nearly 20 percent over 2001.
* Pars Tire Co. of Tehran, Iran, coming in at No. 66, with sales of $65.2 million.
* Galaxy Tire & Wheel Inc., the Malden, Mass.-based earthmover and off-the-road tire developer that became a tire manufacturer last year by purchasing Serbia's Rumaguma A.D. The company, which debuts at No. 67 with sales of $65 million, still sources the bulk of its tires through contract manufacturing agreements with up to 10 firms in six countries around the globe.
* Shandong Zhongce Tyre Co. of Shouguang City, China, on the list at No. 73 with sales of $48.3 million; and
* TVS Srichakra Ltd. of Madurai, India, at 75th with sales of $47.8 million.
Among the companies that fell out of this year's Tire Business rankings are Modi Rubber Ltd. and Govind Rubber Ltd. of India, both of which suspended operations in the past 12 to 18 months, and Romania's Tofan Grup.
Where can you expect to see the most growth in 2019?
45% (34 votes)
|General automotive service||
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