AKRON (Aug. 31, 2004) — The world's major tire makers devoted more than $2 billion in investments in the past year for specific expansion/modernization projects, up measurably from the previous two years.
The major producers budgeted $1.2 billion in 2002-03 and the $1.6 billion in 2001-02, according to data gathered for Tire Business's annual Global Tire Report.
Individually, the major companies have budgeted the following:
Group Michelin, nearly $450 million; Continental A.G., more than $389 million in new projects; Bridgestone Corp., $196 million; Toyo Tire & Rubber Co. Ltd., $150 million; Kumho Tire Co. Inc., $130 million; Pirelli S.p.A., $115 million; Goodyear, $82.2 million; Yokohama Rubber Co. Ltd., $76 million; Nokian Tyres P.L.C., $63.5 million; and Cooper Tire & Rubber Co., more than $45 million.
On a corporate basis, the 11 tire makers with more than $1 billion in annual sales plowed 5.4 percent of their 2003 sales back into capital expenditures. The overall level of spending was up nearly 23 percent over 2002 and put the industry's giants back on par with 2001.
Of the 11 major tire makers, only Goodyear, Pirelli and Toyo reported lower capital spending last year.
Kumho reported the heaviest capital expenditure rate at 10.4 percent of sales, ahead of Sumitomo Rubber Industries Ltd. at 7 percent, Bridgestone at 6.8 percent and Michelin at 6.6 percent.
On average, the majors spent 3.3 percent of their corporate revenues in research and development activities, according to data from nine of the 11. The ratio was down slightly from the 3.4 percent reported for fiscal 2002.
Of those that reported R&D spending, Hankook Tire Co. Ltd. and Michelin reinvested the most, at 5 and 4.6 percent of their sales, respectively.