Bridgestone retains top spot in Global Tire ranking

AKRON — For most of the world's major tire makers, 2018 was a flat year saleswise, leading to another year of status quo at the top of the Global Tire Report ranking compiled annually since 1986 by Tire Business.

That means Japan's Bridgestone Corp. retained the title of world's largest tire maker for the 11th straight year, edging out France's Group Michelin again.

The tables very well could be reversed this year, however, based on the full-year consolidation of a pair of major acquisitions Michelin carried out in the past year: the $1.45 billion buyout of off-road tire specialist Camoplast Ltd. last year and the more recent $545 takeover of Indonesian tire maker P.T. Multistrada Arah Sarana TBK.

• This article appears in the print edition of the Sept. 2 Tire Business.

Together, the pair represents potential annual sales revenue of nearly $1.2 billion.

According to the firms' respective fiscal 2019 half-year earnings results, they're in a virtual tie for the No. 1 ranking half-way through 2019, based on Michelin's 11% sales growth in the period versus a slight drop in Bridgestone's tire division revenue.

Michelin said at the time of the Camso acquisition that combining the Canadian firm's business with its own OTR tire assets would create a global leader in OTR mobility solutions, with 26 plants, roughly 12,000 employees and annual sales exceeding $2 billion.

Goodyear remained a solid No. 3 in the rankings at $14.4 billion, but the gap between Goodyear and No. 4 Continental A.G. narrowed slightly due almost entirely to changes in the dollar-euro exchange rate. Conti's tire business unit sales in 2018 were essentially unchanged versus 2017, while Goodyear's increased just 0.3%.

The rest of the Top 10 remained unchanged — Japan's Sumitomo Rubber Industries Ltd. retained the No. 5 spot it gained a year ago, staying ahead of Pirelli & C. S.p.A., Hankook Tire Co. Ltd. and Yokohama Rubber Co. Ltd. — except for China's Zhongce Rubber Group Co. Ltd. slipping ahead of Taiwan's Cheng Shin Rubber/Maxxis International into ninth on the strength of its own 10% sales growth and a slight drop in sales by Maxxis.

Michelin's takeover of Cikarang, Indonesia-based Multistrada — which goes to market with the Achilles and Corsa brands — provides the French tire maker with more than 180,000 metric tons of annual production capacity and strengthens its presence in the fast-growing Indonesian/Asian market.

Multistrada is ranked No. 57 on this year's Global Top 75 with fiscal 2018 sales of $318.5 million. The deal includes a 20% stake in the Indonesian retailer P.T. Penta Artha Impressi and 123 acres of available land, according to Michelin.

For the annual Top 75 ranking, Tire Business rates tire makers on revenue from the sale of tires they have manufactured in order to achieve a more equitable "apples to apples" comparison. Excluded are items such as third-party sales of steel cord, synthetic rubber or carbon black, as well as estimates for non-tire items such as auto-service-related revenue at company-owned retail stores.

Bridgestone, Michelin, Goodyear and Continental, for example, report hundreds of millions or even billions of dollars in revenue from their respective captive retail networks, which generate measurable shares of their revenue from automotive-service-related activities and sales of tire brands other than their own.

In addition, Bridgestone, Michelin and Goodyear derive a measurable amount of revenue from the sale of synthetic rubber and/or other raw or semi-processed materials to third parties.

Bridgestone's position at the top of the ranking is solidified by minority ownership stakes it holds in two other Top 75 companies — a 43.6% stake in Turkey's BRISA/Bridgestone-Sabanci Tire Mfg. (No. 40 with 2018 sales of $610.8 million) and a 14.6% stake in Finland's Nokian Tyres P.L.C. (No. 21 with $1.72 billion in tire manufacturing-related sales).

Further down the list, Japan's Toyo Tire Corp. moved up one spot to 11th ahead of Giti Tire Pte. Ltd. on the strength of 4.4% sales growth. Giti also moved up a spot, to 12th, ahead of Cooper Tire & Rubber Co. whose sales slipped 1.6% from 2017. Cooper's sales have declined five years running.

New to the rankings this year are:

• Shandong Huasheng Rubber Co. Ltd. — purveyor of the Huasheng, Kapsen, Taitong and Terraking brands — at No. 42 with sales of $586.1 million

• Magna Tyres Group, the Waalwijk, Netherlands-based off-the-road tire company that opened its first corporate-owned manufacturing unit last year — at No. 71 with estimated sales of $105 million.

• Service Industries Ltd., a Lahore, Pakistan-based company active in the two- and three-wheeler market — at No. 73 with sales of $103.8 million.

• Hwa Fong Rubber (Thailand) Public Co. Ltd., the publicly traded Samutprakarn, Thailand-based subsidiary of Taiwan's Hwa Fong Rubber Co. — at No. 74 with sales of $81.3 million.

• Inoue Rubber (Thailand) Co. Ltd., the publicly traded Bangkok-based affiliate of Japan's Inoue Rubber Co. — No. 75 with sales of $79.2 million.

Additionally, Thailand's Vee Rubber Corp. re-appears at No. 70 based on estimated fiscal 2017 sales of $145 million.

Twenty-nine of the companies in the top 75 are from China, including four among the top 20 — Zhongce Rubber Group Co. Ltd. (No. 9); Linglong Group Co. Ltd. (No. 17); Sailun Jinyu Tyre Co. Ltd. (No. 18); and Shandong Hengfeng Tyre Co. Ltd. (No. 19).

Other countries represented in the ranking are: India (seven companies); Taiwan and the U.S. (five each); Japan (four); Italy, South Korea and Thailand (three each); Pakistan, Russia, Turkey and Vietnam (two each); and one each based in Argentina, Belarus, Finland, France, Germany, Indonesia, Netherlands and Singapore.

Seven of the 25 publicly traded companies outlined in this report suffered tire business sales declines in 2018 versus 2017, while five companies or tire divisions recorded double-digit growth, led by Turkey's Petlas Tyre Industry & Trade (34%) and Brisa/Bridgestone (30.7%) and India's JK Tyre & Industries Ltd. (22.9%). (See table on page 10.)

Overall, the estimated value of the world tire industry's sales was $168.6 billion, up 1.8% over 2017.

Collectively, the top 10 tire companies accounted for slightly more than 63% of the world's tire sales last year, based on Tire Business' numbers — up 1 percentage point from the 2017 ranking.

The average operating earnings ratio among the 24 publicly traded companies that Tire Business monitors for this report was 9.9%, down a half point from the 10.3% recorded in 2017 and the second straight year of decline.

Half of the 24 companies reported lower operating income in 2018 versus 2017 with none in the red.

Finland's Nokian Tyres and India's Balkrishna Industries Ltd. were the most profitable, percentage-wise, with 23.3% and 22.6% operating ratios, respectively, research shows.

The average net income ratio for the group of 24 was 6.4 percent, a slight improvement over 2017. All of the companies reported higher net income last year versus 2017.

The average sales per employee for the 24 publicly traded companies that provided employment data was $211,661, up nearly 4% over 2017.

Nokian had the highest sales per employee at $398,729, ahead of Toyo Tire Corp. at $311,381; Cooper Tire at $304,996; Hankook Tire at $274,295; and Nexen Tire at $271,087.