Tokyo – Bridgestone is looking to cut fixed costs by approximately Yen53 billion (€405 million) over the next two years as part of its mid-term business plan to 2023.
The Japanese group will reform expense and cost structure to through further efficiency and optimisation in procurement and logistics across all regions, said Bridgestone in its 2020-2021 sustainability report on 29 June.
The activities, Bridgestone said, are expected to reduce fixed costs by Yen53 billion by 2023, compared to the 2019 baseline.
The group said its 2020 structural reforms, in response to the Covid pandemic, improved fixed annual costs by Yen25 billion.
In the coming years, the group said, it will aim to maintain “this greatly improved fixed-cost structure” and continue to promote further reformation and improvements.
As part of the “drastic” structural reform, Bridgestone said it will continue to “consider and execute the restructuring of its business portfolio and manufacturing footprint over the long term.”
The group said it is examining the restructuring of its 160 manufacturing sites, including diversified products and material manufacturing sites, keeping in mind the sustainable growth of each business.
In addition, Bridgestone said it will reinforce its tire manufacturing sites by maximising the use of existing production capacities “through optimisation of its global supply system and manufacturing improvement.”
In addition, Bridgestone said it aimed to "rebuild" its earning power, through reinforcing sales of passenger car high-rim diameter (HRD) tires.
In developed markets, especially the US and Europe, where the shift to higher rim diameter tires is "ahead", the group is reinforcing sales of 18-inch and larger tires as premium products.
In the emerging markets of Asia-Pacific and Latin America, it will be selling 17-inch and larger tires as premium products in anticipation of the trend toward HRD tires.
In China, Bridgestone said, HRD tires already account for over 70% of total sales of original equipment tires.
In this region, the group said it will drive sales of replacement HRD tires to more than 70% by 2023, compared to approximately 50% in 2019.
“China is a focus area in the group’s premium strategy and the group will continue to reinforce this market,” it added.
Furthermore, as part of its mid-term business plan, the group will be “flexibly reallocating strategic resources”, that are generated by the rebuilding of its earning power, to strategic growth investment.
These will include tire-centric solutions, the core of its solutions business area, where the group will expand and strengthen its subscription and retreading services.
Bridgestone said it planned to scale up its mobility solutions offerings through Webfleet Solutions, and through “strategic partnerships and M&A activities in North America and other regions.”
In doing so, Bridgestone said it intended to triple its sales from tire-centric solutions to Yen67 billion by 2023. This will expand the group’s solutions business area from Yen533 billion in 2019 to Yen650 billion in 2023.