Global Tire Report - A solid platform

For most major manufacturers in the global tire industry, this year was about consolidating and, where possible, building on strong growth in sales and earnings achieved in 2022.

As a marker for the general stability among global tire makers in 2022, the top 11 companies retained their prior-year positions in the global tire rankings – amid a fairly dynamic market scenario.

Group Michelin remained the world’s largest tire maker with tire-related revenue of $28.3 billion, well ahead of no 2 Bridgestone’s estimated tire-centric total of $26.6 billion.

Goodyear – with a full year of revenue from the Cooper Tire & Rubber assets acquired in mid 2021 now incorporated – and Continental AG were the next largest players, with tire revenues of $17.9 billion and $12.4 billion respectively.

There were no position-changes either in the second half of the top 10 rankings: Sumitomo Rubber Industries, Pirelli, Hankook and Yokohama Rubber Co., Zhongce Rubber and Maxxis respectively holding onto the next six slots.

The first change in the rankings was seen at no 12 position, with China’s Sailun Group moving up from 14th place – a strong performance in North America helping the Chinese tire maker to grow annual sales by 16.7% year-on-year in fiscal 2022 to $3.29 billion.

By contrast, other Chinese-based tire makers saw sales decline, reflecting a sluggish domestic market and the increasing imposition of trade barriers in their key export markets.

Overall, though, the majority of companies tracked for this year’s report reported double-digit sales growth in fiscal 2022 over 2021 as the world’s major market economies continued to rebound from the impact of Covid over the previous two years.

The highest achievers in terms of sales growth were Michelin and Kumho Tire: topping the growth charts with year-on-year revenue increases of 39.7% and 36.8% respectively.

Overall value

The size of the global market, as expressed in US dollars, grew only marginally as shifting currency exchange rates offset sales gains reported by many companies in their home reporting currencies.

Annual exchange rate averages for 2022 versus 2021 for most of the major currencies shifted measurably, by double-digits in many cases, as many other national economies fared worse than the US.

The value of the Japanese yen/US dollar exchange rate, for example, shifted 20% year-over-year, while the Euro/dollar rate moved 12.4%.

Combined with sales declines at many Chinese tire makers, the currency-rate factors left the estimated value of global tire sales at $188.6 billion in 2022 – just marginally above the prior-year estimate of $188.0 billion.

Based on the various companies’ performances through the first half of 2023, the ranking order of the top dozen or so companies is not likely to change much for the full-year.

One likely exception is Yokohama Rubber, which will eventually add over $1 billion to annual sales from its acquisition of Trelleborg Wheel Systems in May – leaving it poised to challenge Pirelli and Hankook for the no 6 spot in the global tire rankings.

Also expected to affect the 2023 or 2024 rankings is the situation in Russia, where Bridgestone, Continental, Michelin and Nokian have all divested their production companies in the wake of the Kremlin’s invasion of and ongoing war with Ukraine.

These divestitures have created at least three new companies whose projected annual sales are expected to make them eligible for inclusion in the Top 75 rankings.   

Companies ranked in the Top 75 this year are based in 18 nations, with China (31) having the most, including three – Zhongce Rubber, Sailun and Linglong – in the Top 20.

Other countries represented are: India with eight companies; Japan, South Korea, Taiwan and the US with four each; Italy and Turkey, three each; Pakistan, Russia and Vietnam, two each; and one each from Argentina, Belarus, Finland, France, Germany, Iran, Singapore and Thailand.

Global trends

Collectively, the top 10 represent $115 billion in sales, or roughly 61% of the global total.

The average sales/employee for the top-ranked companies that publish employee numbers was $223,437, up 3.4% over the fiscal 2021 figure.

Nokian Tyres generated the most sales per employee, $337,906, ahead of Balkrishna Industries Ltd ($360,017) and Toyo Tire Corp. ($358,124).

In terms of continuing capital investment, most of the two dozen larger tire companies that report their figures publicly ramped up capital spending last year over fiscal 2021.

On average, the reporting firms’ capex was at 6.9% of sales, up marginally over the 6.5% reported in fiscal 2021. The range covers a span from 0.1% (Casumina) to 16.4% (Sailun Group).

Collectively, spending on R&D increased at most of the firms that report such activity, but not at the pace of sales growth. Therefore, average R&D spending for 20 companies this year was 3.5%, down from 3.8% a year ago.