Toyo Tires raises profit targets under new mid-term plan

Tokyo — Toyo Tires has set new profitability and capital efficiency targets under its new Mid-Term ’26 business plan, aiming to increase operating income by over 20% compared to its previous strategy.

Under the new plan, unveiled 4 March, the Japanese tire maker is targeting operating income of Yen120 billion (€657 million) or higher and an operating margin of 18% by the 2030 financial year.

The plan also sets goals of return on equity (ROE) of at least 13% and return on invested capital (ROIC) of 10% or higher, alongside increased shareholder returns.

The targets represent a significant step up from the company’s previous mid-term programme.

Under the Mid-Term ’21 plan, which was completed at the end of last year, Toyo had aimed to lift operating income to Yen60 billion by 2025.

Ultimately, however, the group delivered Yen97.4 billion in 2025, significantly exceeding the original target.

Based on the new plan, operating income would increase by 23% compared with the level achieved under the previous programme.

The Japanese tire & rubber group said the strategy is designed to “sustain growth through agile and flexible approaches to environmental changes” while building a more resilient earnings base.

Growth under the plan will be driven by higher-value tire segments.

Toyo said it intended to strengthen its position in ultra-high-performance (UHP) tires, expand the truck and bus radial (TBR) segment and reinforce its Proxes premium passenger-car brand.

The group will also invest in new TBR production projects and upgrade existing manufacturing assets, including renovation of its US plant and the establishment of a new R&D centre in Serbia.

Toyo did not provide further details about the plans for new manufacturing plants.

According to the company, the plan aims to increase decision-making speed and create “uniqueness that sets us apart in the industry.”

Digital transformation will also play a central role in the strategy.

Toyo said it intended to introduce ‘data-driven management systems,’ including real-time dashboards for corporate operations and greater use of AI technologies in production.

The programme includes the design of “intelligent” manufacturing plants and broader automation of routine work, as well as a global upgrade of enterprise resource planning (ERP) systems.

At the same time, Toyo plans to increase capital efficiency by strengthening balance sheet management and reducing capital costs.

Toyo said the combination of growth investments, structural reforms and capital management is intended to “sustainably enhance corporate value” over the long term.