Stuck in a shrinking domestic market, major Japanese tire makers are rapidly shifting production to emerging countries where auto demand is soaring.
Tire makers here are facing daunting conditions exemplified by a rapidly graying population and a strong yen hovering at historical highs, both of which will inevitably dent auto demand.
To build a foothold and minimize the risk of foreign-exchange losses, tire makers are rushing to invest heavily in more promising overseas markets, such as China, Southeast Asia, India and Russia.
Bridgestone Corp., the nation’s largest tire manufacturer by sales and profits, plans to spend ¥24 billion by 2015 to boost its presence in emerging economies.
It plans to rev up production capacity by 50 percent at its two Chinese plants that produce car tires and build a second plant in India. In addition, it is “considering entry into the Russian market,” a senior official said.
Sumitomo Rubber Industries Ltd. will increase production capacity at its two Thai plants, one of its main export bases for car tires, 2.3-fold by the end of 2014 compared with 2010 levels.
Along with possible expansion into India and Brazil, the company hopes to raise its proportion of overseas production from 44 percent at the end of March to 60 percent in 2015.
Yokohama Rubber Co. became the first Japanese tire maker to begin manufacturing in Russia when it started production last December. It hopes to be producing 1.4 million tires annually there by next summer and is also “mulling exports to Europe in the future,” one senior official said.
Toyo Tire & Rubber Co. is building a supply base in Malaysia to export tires to Southeast Asian countries under a ¥20 billion investment plan.