Roundup: Global Top 75 tiremakers see 2011 sales revenues jump by 22% on year

The combined sales revenues of the world’s Top 75 tire manufacturers reportedly soared by 22% year on year in 2011, reaching as much as 187.5 billion U.S. dollars, chiefly thanks to higher product prices triggered by the price hike in raw materials.

But their sales volume basically stayed unchanged, or just posting a slight increase from a year earlier, the top tire makers’ financial reports show.

As a matter of fact, the tire industry witnessed an annual growth rate of over 20% for the second year in the 2011 fiscal year, after the market stabilized in 2008 and 2009.

The rising momentum extended to the first half of this year, with leading tire manufacturers all registering double-digit growth in revenues in the period of January to June, despite of the not-so-good growth in volume.

Bridgestone maintained its first place in the Top 75 list for the fourth straight year. Despite of the adverse effects from the devastatingJapanquake in early 2011, the company still managed to grow at an annual rate of 7%, hitting 28.5 billion U.S. dollars.

And the second place was secured by Michelin, narrowing its gap with Bridgestone by raking in full-year revenues of 27.4 billion U.S. dollars in 2011, up about 12% from 2010.

Goodyear ranked the third, with revenues up 21% year on year to 20.5 billion U.S. dollars, doubling that ofGermany’s Continental AG, which was the fourth in the Top 75 list for 2011.

Pirelli, Sumitomo Rubber Industries, Yokohama Rubber, and Hankook Tire were respectively in the fifth to eighth place.

Moreover, Maxxis from Chinese Taiwan advanced to the ninth place by realizing full-year revenues of 4.26 billion U.S. dollars in 2011, which represented a surge of 30% from a year earlier, whileSouth Korea’s Kumho Tires regained the 12th place, surpassing Chinese tire maker Hangzhou Zhongce Rubber Co.

Toyo Tire strengthened its place at the 13th after acquiring the 75% stake inMalaysia’s Silverstone (with annual sales at USD140 million) and its subsidiary inChina’sShandongprovince.

Giti Tire advanced to the 14th place, with annual sales hitting 2.9 billion U.S. dollars. Specifically, Gajah Tunggal, an Indonesian tire producer, contributed more than one billion U.S. dollars to Giti’s handsome performance – Giti owns 49.8% stake in Gajah Tunggal.

If combining the sales of its associated firms, Giti’s rank will be 10th, right between Maxxis and Copper Tires. But it is necessary to point out that some 12% of the annual sales of Gajah Tunggal last year (at about 124 U.S. dollars) shall vest in Michelin, since the latter holds 10% stake in the former.

Likewise, the extended sales of Bridgestone came from its Turkish joint venture Sabanci (ranking 34th, annual sales at 896 million U.S. dollars), in which Bridgestone owns a 43% stake, andFinland’s Nokian Tyres (ranking 18th, annual sales at 183 million U.S. dollars), in which Bridgestone has a 19% stake.

At the meantime, Pirelli’s expansion to the Russian market represents one of the most eye-catching changes in tire industry. The Italian tire maker has set up a joint venture with a local firm inRussia, taking over the former assets controlled by Amtel and Sibur, with annual sales at around 430 million U.S. dollars.

Titan International Inc., a specialized engineering tire and farm tire producer, also had outstanding performance last year. Thanks to the contribution of farm tire assets originally owned by Goodyear inLatin America, Titan International managed to advance to the 27th place in the latest Top 75 list.

The sales revenues of the top 10 tiremakers totaled 125.0 billion U.S. dollars last year, accounting for two thirds of the global market.

In the ranking list for 2011, there are 29 firms reporting sales of over one billion U.S. dollars, and four more companies see sales exceeding 900 million U.S. dollars.

The top three tire tycoons – Bridgestone, Michelin and Goodyear – raked in aggregate sales of 76 billion U.S. dollars, taking up 40% of the global tire industry.

Meanwhile, after several years of silence, Specialty Tires of America (STA) returned to the Top 75 list.

Companies that dropped out of the list for this year include Societe Tunisienne des Pneumatiques of Tunisia, Artawhee fromIran, Poddar Tire fromIndia, JSC fromUkraine, and Pearl River Tyre Co. from southernChinacity ofGuangzhou.

It’s learned that the reasons of their drop out were either being replaced by larger companies or failure to offer reliable financial indicators.

In terms of profit margin, the pre-tax operating margin of the top 20 tire companies averaged 8.7%, up 0.7 percentage points from the previous year.

Among the top 75 tire makers, only two incurred deficits in 2011 – Kumho Tires fromSouth Koreaand JK Tyre fromIndia.

At the same time, Nokian Tyres posted the highest, and record-setting, operating margin and profit ratio for 2011 – 26.1% and 21.1%, respectively. Maxxis, Hankook Tire, Continental, Shandong Linglong, and Pirelli all reported double-digit revenue sales ratio.

Of the Top 75 tire manufacturers, a total of 31 are Chinese companies, including 26 from the Chinese mainland (some five companies are in the top 20) and five from Chinese Taiwan. The rest Top 75 companies basically come fromIndia(11), theUnited States(5),Japan(4),Italy(3),Russia(2),South Korea(2),Indonesia(2),Thailand(2),Turkey(2),Argentina(1),Byelorussia(1), Czech (1) and France (1).

(Contributed by Olivia, olivia@