Toyo Tire & Rubber Co., Ltd. Business Report FY2010

Business Highlights

Financial Overview

(in millions of JPY)
  FY2010 FY2009 Rate of
change (%)
Sales 294,092 287,726 2.2
Operating income 12,182 8,664 40.6 -
Ordinary income 9,193 8,979 2.4 -
Net income 521 2,957 (82.4) -
Sales 216,596 214,308 1.1 1)
Operating income 8,863 6,933 27.8 -
Sales 77,462 73,380 5.6


Operating income 3,197 1,698 88.3 -

1)Tire Business
-Sales of tires were favorable in the first half of the year, thanks to the last minute demand that resulted just before the eco-car sales incentives came to an end, and also to the greater volume of tires the Company exported. However, in the second half of the year, sales in Japan decreased as a result of the eco-car sales incentives ending and the negative impact caused by the Great East Japan Earthquake. As a result, unit sales volume was lower than that recorded the previous year; however, sales in monetary terms increased year-on-year because of the tremendous increase in sales of high value-added products.

2)DiverTech Business
-Sales of anti-vibration rubber increased year-on-year because of the strong performance throughout the year in exports of vehicle models equipped with the Company’s tires, despite the significant decrease in vehicle unit production volume that resulted from the Great East Japan Earthquake.  
-Sales of automotive seat cushions were significantly lower year-on-year because of poor sales in the second half of the year of vehicle models equipped with the company’s cushions, especially eco-cars such as hybrids which were affected by the end of the eco-car sales incentives.


The Company announced that its Open Country W/T tires designed for winter road driving in Europe have been chosen as original equipment tires for the Audi Q7 sold in Germany. The 255/55R18 Open Country W/T tires are expected to support the dynamic driving performance of luxury SUVs on harsh, winter road surfaces in Europe. (From an article in the Nikkan Jidosha Shimbun on January 29, 2011)

The Company started delivering its "Proxes T1 Sport (AO)" tires to Audi AG in April 2010. The tire, in size 255/35ZR19 96Y, has been chosen as the exclusive fitment for all TTS models. The tire has also been selected as an option for the TT. These vehicles will be available worldwide, including in Europe, North America and Asia. (From a press release on July 13, 2010)


In October 2010, the Company announced its decision to acquire Silverstone Berhad, a Malaysian tire manufacturer, in order to start manufacturing in Southeast Asia. It aims to strengthen its foundation in the growing Southeast Asian market. While Toyo will make Silverstone its 100% subsidiary through acquisition of all the shares, it will reinforce the production capacity of Silverstone's plant in Taiping, Malaysia and produce tires of the Toyo Tire & Rubber brand. It plans to increase the annual production capacity to five million tires in the first one or two years and up to eight million tires in the future. (From an article in the Nikkan Jidosha Shimbun on October. 23, 2010)

New Company

In April 2010, the Company announced that it has obtained an approval of the Chinese local government for conducting operations at its planned new production and sales company for tires in Zhangjiagang City, Jiangsu Province, China. Having completed formalities of incorporation by receiving the license from the Administration of Industry and Commerce, the company will launch full-scale preparation work for the new plant, aiming to start operations in December 2011. The new company, which will be called Toyo Tires Zhangjiagang Co., Ltd., will have the capacity to manufacture 2 million tires for passenger vehicles and light-duty trucks per year. The subsidiary will be capitalized at 50 million dollars (approximately 4.6 billion yen), which will be fully invested by Toyo Tire & Rubber, and hire some 500 people. (From an article in the Nikkan Jidosha Shimbun on Apr. 22,2010)

In September 2010, the Company announced that Toyo Tires Zhangjiagang Co., Ltd., its new tire manufacturing subsidiary in Zhangjiagang City, Jiangsu Province, held a groundbreaking ceremony at its plant site. The ceremony was attended by approximately 300 people including Kenji Nakakura, president of Toyo Tire; Xu Mei-jian, the mayor of Zhangjiagang City; Isao Okai, the Japanese Consulate in Shanghai; and many representatives from the municipal government, local community, and tire retail outlets throughout China. President Nakakura said in a speech, "This is our first wholly-owned Asian tire production facility outside of Japan, and it will be one of the most important plants of our Group. We are grateful for the opportunity to make a contribution to the local community by establishing this factory, which will lead to the creation of stable jobs. We also look forward to evolve and prosper together". Toyo Tires Zhangjiagang is Toyo Tire's second wholly-owned tire production facility to be established outside of Japan after Toyota Tire North America Manufacturing Inc. in the United States. The Chinese subsidiary was established in April with a registered capital of 50 million US dollars to produce and sell tires for passenger cars and light trucks. The plant is looking to commence production by the end of 2011. Its annual production capacity is expected to reach 2 million tires with a workforce of some 500. (From an article in the Nikkan Jidosha Shimbun on September. 11, 2010)

>>>Financial Forecast for the Next Fiscal Year (Sales, Operating Income, etc.)


R&D Expenditure

(in millions of JPY)
Business segment FY2010 FY2009 FY2008
Overall  8,556 8,315 8,762
Tire  5,459 5,327 5,567
DiverTech  2,249 2,102 2,326
In common  847 886 869

R&D Facilities

Tire Technical Center Hyogo Pref., Japan
R&D Center Osaka, Japan
Automotive Parts Technical Center Aichi Pref., Japan
Automotive Components Technical Center Chiba Pref., Japan
Miyazaki Tire Proving Ground Miyazaki Pref., Japan
Saroma Tire Proving Ground Hokkaido, Japan

R&D Activities

The tire technical center focuses on developing new tires by:
-developing fundamental technology on tire design that incorporates analyzing the behavior of both the tires and the vehicles; and
-developing simulation technology that can analyze noise and abrasion performance of tires.
-The Company built a production technology workshop on the premises of its tire technical center in order to develop elemental technology involved in production processes as a means toward improving its production technology.
-The Company is carrying out R&D activities on elemental technology, which it will introduce in its new plant to be built in China.

The Company is considering offering new product lines under the “Nitto” brand with the aim of expanding sales in the Asian market. It will develop new tires with excellent performance particularly on wet road surfaces for markets in Japan, China and Southeast Asia. Toyo Tire & Rubber has already decided to begin production of Nitto brand tires at its plant in Malaysia it acquired by purchase of a local company. In addition to its existing major markets in North America and the Middle East, it intends to boost sales in the Asian market by introducing new products with additional features catering to the local market, while maintaining a long-cherished brand value. (From an article in the Nikkan Jidosha Shimbun on February 1, 2011)

<Transportation equipment>
-Advanced Technology: As part of its efforts to create suspension systems that feature the most suitable grounding performance, the Company completed development of a product called Low Friction-BUSH that largely improves both passenger comfort and driving performance. The Company is preparing to launch the new product.
-The Company has developed a high-performance, vibration-reducing rubber that is highly heat resistant. This new material responds to temperature rise in the engine room. The Company is working to commercialize it in the future.
-Environment: The Company had been focusing on developing hexahydric-chrome-free products. But its recent focus is on reducing VOC (volatile organic compound) emissions in its production lines as well as in its products by increasing the use of alternative materials.
-Fuel Economy: The Company is trying to develop parts that are not only lighter but also have higher performance, by making use of aluminum and resin materials; and by also developing new methods and new materials.

Investment Activities

Capital Expenditure

(in millions of JPY)
Business segment FY2010 FY2009 FY2008
Overall  28,324 13,215 29,221
Tire  26,299 10,842 23,955
DiverTech  1,814 2,372 5,266

-The Company made a capital investment mainly to streamline production, improve product quality, and enhance production facilities at tire plants in North America.

-The Company made a capital investment mainly to streamline production and improve product quality.

Planned Capital Investments

(As of Mar. 31, 2011)

Planned amount of investment
(in million JPY)
Objective of the investment
Tire 24,734
Streamlining production and improving product quality; enabling operations to respond to the Company's global supply structure
DiverTech 2,697 Streamlining production and improving product quality; enabling operations to respond to the Company's global supply structure  
In common 293 Strengthening research on fundamental technology
Total 27,724 -