Yokohama Rubber’s New Medium-Term Management Plan—Yokohama Transformation 2023

The current tire market can be divided into “consumer tires” for passenger cars and “commercial tires” used on trucks and buses, agricultural machinery, and other industrial vehicles. The two markets are roughly thought to be equal in scale. However, as CASE*1, MaaS*2 and other similar trends become more widespread, individual car ownership will decline and infrastructure-type vehicles used to move people and goods will increase. As a result, what were once consumer tires will become commercial tires. Accordingly, Yokohama Rubber will respond to this changing market through a two-pronged approach. First, the consumer tire business will deepen focus on the initiatives such as expansion of sales of high-value-added tires. Second, the commercial tire business will search for and seize new business opportunities presented by the market changes in four thematic areas.

■Consumer tires
Maximize sales ratio of high-value-added tires
The consumer tire business will strive to maximize the sales ratio of its core high-value-added tires, comprising the global flagship ADVAN brand, the GEOLANDAR brand of tires for SUVs and pickup trucks, and various winter tires. The initiatives taken to achieve this goal will include (1) expansion of ADVAN and GEOLANDAR tires as original equipment on new cars, (2) strengthen sales in the tire replacement market and expand the size lineups for these brands and the company’s winter tires, and (3) product and regional business strategies that will increase sales of tires that respond to specific trends in each regional market. Through these initiatives, Yokohama Rubber aims to increase ADVAN brand sales by 50%, GEOLANDAR brand sales by 15%, and winter tire sales by 20% over their respective 2019 levels in 2023, thus raising the combined sales ratio of these three core tire brands from the current 40% to 50%.

■Commercial tires
Further strengthen the business by capturing market changes
Responding to the dynamic market changes being brought about by CASE*1, MaaS*2 and other new trends, the commercial tire business will search for new ways to provide value through initiatives taken in four thematic areas. It also will strengthen its OHT and TBR businesses.

Cost
To meet the expected growth in demand for lower cost tires caused by changes in the market, Yokohama Rubber will position its passenger car tire plant in India as the lowest cost tire factory in the Yokohama Rubber Group and create a new, low-cost production model. The company will also consider using a low-cost production model to expand output at its TBR tire plant in Thailand.

Service
With corporate ownership of vehicles expected to increase, Yokohama Rubber will package tire-related after-sales services with the tires it sells. Yokohama Rubber will strengthen its service system by leveraging its nationwide sales and logistics network and increasing its service trucks.

DX
Yokohama Rubber will accelerate its development of tire sensors and create new value-added services by gradually expanding services and customers as new functions are added to the tire sensors.

Product lineup
The transportation and logistics industries are expected to need a wide variety of tires to meet a range of mileage and usage conditions as electric and driverless vehicles become more common. Yokohama Rubber will help facilitate this transformation in logistics by expanding its already wide-ranging tire lineup, thus further enhancing a core strength that provides it with a distinct advantage in this market.

■OHT business: Build into driver of future growth
The ongoing integration of the OHT businesses of Yokohama Rubber and Group companies ATG and Aichi Tire will further accelerate the growth of the Yokohama Rubber Group’s OHT business. The business will be strengthened by a multi-brand approach to market development and responsiveness to customer needs. The company also is aggressively investing to expand production capacity as it targets OHT sales revenue of ¥140 billion in 2025, the equivalent of 30% of Group-wide profit at that time.

■TBR business: Strengthen foundations for growth
The company will continue its efforts to bolster its Mississippi plant’s ability to provide a stable supply of truck and bus tires in the United States. The company plans to increase the TBR production capacity to meet robust demand and expand sales revenue to ¥100 billion by 2025.

*1 The first letters of “connected”, “autonomous”, “shared” and “services” (sometimes only “shared”), and “electric”
*2 Mobility as a Service. The provision through packaged search, reservation, payment, and other related functions of optimal combinations of public transport and other mobility services for addressing the mobility needs of local residents and of travelers

MB segment during YX2023 is to transform its product portfolio into one providing both strong growth potential and stable profits. The MB segment will concentrate its resources in its two strongest business domains—hoses & couplings and industrial products—as it transforms itself into a growth driver capable of generating stable profits. At the same time, MB’s Hamatite business will improve its business structure by refocusing on areas of expertise, and the aerospace products business will undergo restructuring aimed at developing business in tune with trends in today’s aerospace industry.

YX2023’s HR strategy includes reforming the personnel system to strengthen staffing at the company’s management and administrative levels, building a stronger organization that can quickly respond to changes in the environment, and implementing work-style reforms that will benefit all employees. In line with the company’s CSR slogan “Caring for the Future,” ESG initiatives will continue to focus on providing environmentally friendly products, achieving carbon neutrality, and supporting activities in communities that are home to Yokohama Rubber operations. Management also will strengthen corporate governance and continue the company’s efforts to create safe, secure, and comfortable workplaces.