Financial Overview

(in millions of JPY)

	FY2008	FY2007	Rate of change (%)	Factor
Overall
Sales	517,262	551,431	(6.2)	-Sales, operating income, and ordinary income decreased from the previous year's results despite the following initiatives: -The Company made upward price adjustments to its product selling prices in the first half of the year. -As emergency countermeasures to cope with the deteriorating economic environment  in the second half of the year that might have put the Company in a critical situation, the Company cut down production, postponed and froze investment projects, and further reduced costs.
Operating income	12,808	33,118	(61.3)
Ordinary income	371	25,164	(98.5)
Current net income	(5,654)	21,060	-
Tire Operations
Sales	399,728	419,916	(4.8)	<Japan> -OEM sales of tires in Japan increased in the first half of the year, supported by automakers' production expansion initiatives. Sales on a full-year basis, however, fell from the previous year's result mainly due to the impact of the global economic crisis in the latter half, which forced automakers to cut down vehicle production dramatically. <Outside Japan> -Sales of truck and bus tires as well as construction vehicle tires decreased from what they were last year, being severely hit by the global financial crisis.
Operating income	9,890	26,049	(62.0)

Supply Agreement with Nissan
-The Company is supplying its ADVAN brand tires as original equipment for the new Nissan Fairlady Z. This vehicle model, which is designed for the global market and known as the Nissan 370Z outside Japan, comes with the ADVAN Sport in size 225/50R18 95W (front) and 245/45R18 96W (rear). (From a press release on Dec 9, 2008)


Enhancing its production structure
-The Company announced that it will acquire a business site in the Industrial Estate Bahadurgarh in India.

-The Company held an opening ceremony at its first plant in China set up to manufacture truck and bus (TB) tires; in Suzhou City, Jiangsu Province.

-The Company announced that it will build a natural rubber processing factory in Thailand.

-The Company announced its plans to construct a tire plant in the Lipetsk Special Economic Zone (SEZ) in Russia.

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Mid-term management plan GD100 Phase II

(in millions of JPY)

	FY2008	FY2011	FY2017
Sales	517,262	550,000	1,000,000
Operating income	12,808	38,500	100,000

Business strategy
<Russia>
-The Company will set up a new tire plant at the Lipetsk Special Economic Zone located in the southwest region of Russia. Operations at this facility are scheduled to begin in 2011.

<China>
-The Company will continue with its expansion project in China, working to increase its annual production capacity at its passenger vehicle tire plant from the current 3 million units to 4.1 million units.


-The Company began discussing the idea of producing and selling environmentally friendly tires in China, following Japan. The Company began operations at its truck and bus tire plant in China in October, 2008, targeting an annual production capacity of 2 million tires over the midterm. The addition of environmentally friendly tires to its production lineup will allow the Company to better meet a diversifying need in China. The Company anticipates growing demand in China for tires to be used for high-speed transportation in line with the development of a national expressway network. By launching sales of more ecologically friendly tires in the Chinese market, namely tires that are high quality, longer lasting, and achieve lower fuel consumption, the Company expects to improve its market penetration from today's share of less than 1%. (From an article in the Nikkan Jidosha Shimbun on Nov. 7, 2008)

R&D Expenditure

(in millions of JPY)

	FY2008	FY2007	FY2006
Overall	15,277	15,289	14,649
Research Headquarters	1,829	1,936	1,390
Tire Operations	9,098	8,993	8,932

R&D Structure
Research facilities
-RADIC, a research and development center at the Hiratsuka factory, is the main facility. The Company is working on developing new technology through using equipment such as supercomputers, electronic microscopes, ESCA (surface analysis device for materials) and centrifugal separators.

-The Company conducted tests using real vehicles at its integrated tire testing facility D-PARC and another tire testing facility for the winter T*MARY.


R&D Profile
-The R&D Division is developing not only new materials but also advanced simulation techniques capable of analysing the structures and multiple reactions of materials to various elements,  making use of the Company's accurate and sophisticated analysis technology. Its development focus is set on engineering environmentally friendly tire materials as well as conducting studies to find where these materials can be further applied, such as in the fields of electronics, new energy, and energy saving technologies.

-In the tire business, the Company is working to achieve the target it set, which is for all of its products to be environmentally friendly by FY2017, which will end in March 2018.


Technology Licensing Contracts Involving Tire Operations

Counter party (Location)	Details	Effective from:	Will expire in:
Continental AG (Germany)	Licensing of patents and production technologies regarding tires for trucks and buses	May 21, 1990	Dec. 31, 2012
Toyo Tire & Rubber Co., Ltd. (Japan)	Licensing of patents and production technologies regarding tires for trucks and buses	Aug. 2, 1990	Dec. 31, 2012
Continental AG (Germany)	Licensing of patents and technology information regarding vehicle tires	Apr, 1, 2002	Mar. 31, 2012

Licensing Agreements Involving Tire Operations

Counter party (Location)	Details	Effective from:	Will expire in:
Continental AG (Germany)	Licensing of patents and production technologies regarding tires for trucks and buses	May 21, 1990	Dec. 31, 2012
Toyo Tire & Rubber Co., Ltd. (Japan)	Licensing of patents and production technologies regarding tires for trucks and buses	Aug. 2, 1990	Dec. 31, 2012
Continental AG (Germany)	Licensing of patents and technology information regarding vehicle tires	Apr, 1, 2002	Mar. 31, 2012

Capital Investment

(in millions of JPY)

	FY2008	FY2007	FY2006
Overall	43,300	27,300	29,000
Tire business	38,400	23,000	25,600

-The Company invested 17.9繝ｻbillion yen to enhance equipment and improve its productivity and the quality of its products.

-The Company invested 9.3 billion yen to construct additional facilities to produce passenger-car and light-duty-truck tires; and to build a new, large proving-ground at Yokohama Tire Manufacturing (Thailand).

-The Company invested 3.3 billion yen to install additional production equipment to produce truck and bus tires at Suzhou Yokohama Tire Co., Ltd.


Investments Outside Japan
<India>
-The Company announced that it will acquire a business site of 25 acres (approximately 101,000 square meters) in the Industrial Estate Bahadurgarh from Haryana State Industrial and Infrastructure Development Corporation of India. The Company launched its business operations in India in April 2007, when the Company established Yokohama India Pvt. Ltd., a wholly owned subsidiary in India. Yokohama India has worked on developing a market for its brand of tires by making use of its own network since 2007 by starting sales activities that encourage customers to buy Yokohama tires when replacing their worn out tires. (From an article in the Nikkan Jidosha Shimbun on Apr. 26, 2008)

<China>
-The Company held an opening ceremony in Suzhou City, Jiangsu Province at Suzhou Yokohama Tire Co., Ltd., the site of its first manufacturing facility in China to produce truck and bus tires. Bringing this plant online completed the Company's business strategy for China in terms of its producing tires for both passenger cars and trucks and buses. The plant will have an annual manufacturing capacity of 340,000 tires, or 1,000 tires a day, by May 2009, with the number of its employees likely to be reaching 400 by that time. The launch of production at this plant brings the total number of countries where the Company manufactures truck and bus tires to three outside Japan: the United States, Thailand and China. Yokohama Rubber invested a total of 9.5 billion yen to construct the 79,000-square-meter plant. The Company plans to make additional investments to expand the capacity in line with future sales growth. (From an article in the Nikkan Jidosha Shimbun on Oct. 25, 2008)

<Thailand>
-The Company announced that it will build a natural rubber processing factory in Thailand. According to the announcement, the construction will start in January 2009 and operations will begin in October. Operating its own processing plant will ensure the Company of a stable supply of quality natural rubber. The new plant in Surat Thani Province, southern Thailand, will be operated by a company established on September 3 as a joint venture with Tech Fu Joint Venture Co., Ltd. which is a wholly owned subsidiary of Teck Bee Hang Co., Ltd., a natural rubber processing company based in Thailand. The new joint venture was established with the Company investing 95% of the capital and Teck Fu Joint Venture investing the remaining. (From an article in the Nikkan Jidosha Shimbun on Nov. 13, 2008)

<Russia>
-The Company announced its plans to construct a tire plant in Lipetsk Special Economic Zone (SEZ). The facility, which is scheduled to begin operations in 2011, will have an annual production capacity of 1.4 million tires. Total investment is expected to be about 3.5 billion RUB (about 11 billion yen). (From a press release on Dec 26, 2008)


Planned Capital Investments (Tire business) (As of Mar. 2009)

Facility (Location)	Business	Expected Investment (millions of yen)	Start	Planned completion	Increased capacity after completion
The Company
Hiratsuka Plant (Kanagawa, Japan)	Manufacturing	2,472	Apr. 2008	Mar. 2010	-
Mie Plant (Mie, Japan)	Manufacturing	3,171	Apr. 2008	Mar. 2010	-
Mishima Plant (Shizuoka, Japan)	Manufacturing	2,632	Apr. 2008	Mar. 2010	-
Shinshiro Plant (Aichi, Japan)	Manufacturing	13,900	Apr. 2008	Mar. 2010	-
Onomichi Plant (Hiroshima, Japan)	Manufacturing	4,775	Apr. 2008	Mar. 2010	-
Yokohama Tire Corporation
Salem Plant (Virginia, USA), etc.	Manufacturing and other business	3,825	Apr. 2008	Mar. 2010	-
Yokohama Tire Manufacturing Thailand
Headquarters and Plant (Rayong, Thailand)	Manufacturing  and other business	16,267	Jun. 2007	Unknown	2.8 million passenger car/light truck tires