After years of steady but unspectacular growth, the global tire industry's sales revenues shot up nearly 15 percent in 2004, on a combination of higher volume, higher prices and currency exchange changes.
The estimated value of the world's tire industry in 2004 grew to $92 billion with a dozen billion-dollar companies-up one from a year ago-controlling nearly 81 percent of the total, according to Tire Business' annual analysis of global tire data.
Although it registered rather modest growth of only 2 percent last year, France's Group Michelin maintained its perch at the top of the global rankings for the fourth straight year, finishing the year about $1 billion ahead of Japan's Bridgestone Corp.
Bridgestone closed the gap slightly, however, with 5-percent growth last year.
The difference between the two companies narrows even more when a share of sales from Turkey's Brisa Bridgestone Sabanci Tire Mfg. is considered; Bridgestone owns 40 percent of Brisa, which is ranked 26th on its own with sales of $375.6 million.
No. 3 Goodyear reported 21-percent growth last year, in part due to the first-time inclusion of sales from its South Pacific Tyres and T&WA original equipment tire-wheel mounting joint ventures, which boosted reported sales by about $1.2 billion.
The ranking was unchanged through No. 11, but with South Korea's Hankook Tire Co. Ltd. and Kumho Tire Co. Inc. challenging Cooper Tire & Rubber Co. and Japan's Toyo Tire & Rubber Co. Ltd., respectively, for the Nos. 9 and 11 slots.
Both Hankook's and Kumho's Chinese subsidiaries are growing rapidly and contributing greater shares of their respective parent firms' annual sales.
It should be noted Tire Business ranks the companies on tire sales only; for those companies with captive retail holdings, revenue from non-tire sales-such as automotive service or sales of tire brands other than their own-is excluded.
Bridgestone, for example, generates more than $2 billion in revenue annually from its captive retail activities in the Americas and Japan.
Moving up to 12th this year is Grandtour Tire Pte. Ltd.-also known as GiTi Tire-the Singaporean holding company for five separate Chinese tire makers, whose collective sales topped $1 billion for the first time.
Grandtour leapfrogged over Taiwan's Cheng Shin/Maxxis International despite Maxxis' 30-plus-percent growth to $983.8 million as its Chinese subsidiary companies started to contribute more significantly to the bottom line.
China's Triangle Group Co. Ltd. slipped to 14th from 12th despite growing nearly 20 percent itself to $910.9 million.
There was little in the way of mergers and acquisitions last year, so this had no effect on the rankings this year. Thus far in 2005 there have been two deals of consequence: Amtel Holdings' acquisition of Vredestein N.V's tire business, and Goodyear's deal to sell its North American agricultural tire business to Titan International Inc.
The Goodyear-Titan deal, if concluded, would double Titan's tire-related sales revenue to more than $400 million, boosting the Quincy, Ill.-based farm, forestry and heavy industrial tire maker into the Top 25 tire makers.
Amtel's $256 million purchase of Vredestein will create a group with annual sales of more than $700 million, pushing the Russian holding company toward the 15th spot in the ranking.
In addition, Michelin has an offer pending to buy into Egypt's Trenco.
Looking forward, Bridgestone is making a bold bid for growth, announcing more than $2 billion in capacity expansion projects during the year that should translate in two or three years' time to additional sales of up to $1.5 billion.
The average revenue per employee for 15 of the largest publicly traded tire makers grew 12.5 percent to $198,254. The averages ranged from $84,400 for India's Apollo Tyres Ltd. to $393,821 for Toyo.
The top 75 includes companies from 28 countries, including 19 from China, eight each from the U.S. and India and five each from Japan and Taiwan.
While higher selling prices translated into higher sales for the industry, they didn't automatically translate into improved earnings, although 10 of the 15 publicly traded companies tracked for this year's Global Tire Report had higher operating earnings last year.
The average operating income for the 15 companies-all ranked among the top 20-was 6.7 percent, up slightly from the 2003 average.
Nokian Tyres P.L.C. was the earnings leader in 2004, reporting an operating earnings/sales ratio of 18 percent. Others in the double-digit range were Hankook Tire (13.1 percent) and Cheng Shin/Maxxis International (12.9 percent).
All the companies tracked were in the black on a net basis as well, with an average earnings/sales ratio of 3.6 percent. (See chart on page 9 for complete details.)
There are eight new companies in the rankings this year, led by Moscow-based Sibur-Russkie Shiny at No. 21. Sibur, with sales of $470 million, is the first-time collective reporting of four Russian tire makers-Omskshina, Yaroslavl Tyre, Voltyre and Ural Tyres-under the control of Russia's Sibur petrochemical conglomerate. Omskshina and Yaroslavl Tyre were ranked on their own accord last year.
Others debuting are:
* South China Tire & Rubber Co. Ltd. of China-also known as Guangzhou South China Tire & Rubber and maker of the Wanli brand-No. 33 with sales of $309.2 million;
* Loadstar Pvt. Ltd./Solideal Co. of Sri Lanka, No. 57, based on 2003 sales of $85 million;
* Balkrishna Industries Ltd. of India, No. 58 with $82.7 million;
* Beijing Shouchuang Tyres Co. Ltd. of China, No. 61, with sales of $77.2 million;
* Xuzhou Tyre Group Corp. of China, No. 66 with sales of 67.8 million;
* Xinjiang Kunlun Tire Co. Ltd. of China, No. 72 with sales of $49.9 million; and
* Changchun Tire Co. Ltd. of China, No. 74 with sales of $44 million.
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Corporate sales per employee
Toyo Tire & Rubber: $393,821
Yokohama Rubber: $290,003
Hankook Tire Co.: $267,724
Nokian Tyres: $263,137
Cooper Tire: $238,197
Pirelli S.p.A.: $237,267
Bridgestone Corp.: $196,443
Continental A.G.: $194,189
Kumho Tire Co.: $183,812
Group Michelin: $159,081
Apollo Tyres Ltd.: $84,400
MRF Ltd.: $75,333
Source: Company annual reports