Tokyo – Toyo Tires is eyeing a double-digit improvement in its consolidated operating income within the next five years, through a mix of investments in new products, manufacturing and market development.
Unveiling its mid-term ’21 plan, which will run through to 2025, Toyo said it will look to increase its operating income by 65% to Yen600 billion (€4.64 billion) and invest a total of Yen194 billion in growth and equipment.
As part of the strategy, Toyo said it will target North America as a key market, where it expects to generate 58% of total global sales by 2025.
In a 25 Feb presentation, the Japanese tire maker said it intended to improve its North America ranking from 7th in 2020, to 5th in 2025, through expanding production capacity in the US and increasing exports from its facilities in Japan and the currently under-construction plant Inđija, Serbia.
Under the plan, Japan-based units will shift to ‘high-value-added products’ as the key production base of the group with the aim to increase supply to the North American market.
As the group’s “most cost-competitive” production centre – with 30% lower costs compared to Toyo’s manufacturing unit in Sendai, Japan – the Serbian unit will export 2 million tires a year to North America, while supplying 3 million units to the local European market.
Other key markets over the five-year period include Japan, Asia, and Europe, where Toyo expects to complete the construction of its Serbian plant by April 2022, to support a “balanced global supply”.
In addition, the plan will further focus on R&D and introducing “differentiated products” which will have “enhanced strengths,” Toyo noted.
These will include advanced designing to meet ‘multiple performance requirements’, developing applicable technologies for next-generation mobility such as electronic vehicles (EVs) and eco-friendly technologies.
Furthermore, the group said it will look to optimise its logistics systems, digitalise sales, and introduce new technologies in order to expand sales networks and cater for each of its key markets.