Japanese tyre maker launches cost-cutting initiative as US tariffs bite

Sumitomo Rubber Industries maintained its full-year profit forecast despite a sharp decline in first-half earnings, as the Japanese tyre maker launched a comprehensive cost-reduction programme to counter rising raw material costs and US trade tariffs.

The company reported business profit of 28.3 billion yen for the six months ended June 30, down 33 percent from the previous year, whilst sales revenue fell  three percent to 572.2 billion yen. Profit attributable to shareholders plunged 63 percent to 14.4 billion yen.

Despite the weak first-half performance, Sumitomo Rubber held its full-year business profit target at 95 billion yen, representing an eight percent increase from the previous year.

"At the initial planning stage for H1, we anticipated significant negative impacts from rising raw material costs, particularly natural rubber, as well as foreign exchange fluctuations," President and CEO Satoru Yamamoto told analysts. "Overall, performance progressed largely in line with our plan."

The company faces headwinds from US tariffs imposed under the Trump administration, with an estimated impact of 14.5 billion yen for the current fiscal year, down from an initial estimate of 18 billion yen following tariff postponements and rate reductions in Japan and Indonesia.

Project ARK targets 30 billion yen savings

To bolster profitability, Sumitomo Rubber launched "Project ARK," a company-wide cost-reduction initiative targeting 30 billion yen in cumulative savings by the end of 2027 from its 1.1 trillion yen annual cost base.

"By advancing Project ARK, which carries forward the direction of the Be The Change initiative, we intend to help build a robust management foundation that is resilient to such external changes," Yamamoto said.

The programme focuses on tyre production costs, shared administrative and R&D expenses, and non-tyre business segments. General Manager Shinji Araki, who leads the project, said the company expects to achieve "several billion yen" in savings this year, ramping up to approximately 10 billion yen in fiscal 2026.

Dunlop brand expansion progresses

The company began selling tyres under the acquired Dunlop brand in North America and Australia in May, following the completion of its trademark acquisition from Goodyear Tire & Rubber. Sumitomo Rubber plans to launch proprietary Dunlop products for the North American market in January 2026, with European sales to follow.

"By introducing differentiated products manufactured by the Company under the DUNLOP brand in Europe, North America, and Oceania, we aim to increase the proportion of premium products," Yamamoto said.

The company's proprietary Active Tread technology, featured in its Synchro Weather tyre launched in Japan last October, won multiple industry awards and is being developed for next-generation all-season tyres targeting European and North American markets for a 2027 launch.

Tariff impact manageable

Sumitomo Rubber began implementing price increases in the US  market in May to offset tariff impacts, with Managing Executive Officer Hidekazu Nishiguchi saying progress has been "generally in line with our plan."

The company estimates it can recover approximately 10 billion yen of the 13.5 billion yen tariff impact on its tyre business through price increases, with the remainder offset through cost reductions and expense controls.

"Since we primarily ship from Thailand, the tariff is applied to the export price from Thailand. As a result, we estimate the effective tariff burden to be around 12% to 13%," Nishiguchi explained.

For the full year, Sumitomo Rubber forecasts sales revenue of 1.215 trillion yen, unchanged year-on-year, whilst maintaining its interim dividend at 35 yen per share with a projected year-end dividend of 35 yen for a total annual payout of 70 yen.

The company's tyre sales volume is expected to decline four percent to 99.03 million units for the full year, though it continues to focus on premiumising its product mix, with premium tyres forecast to account for 46 percent of passenger car tyre sales, up from 44 percent previously.

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The U.S. Tire Manufacturers Association (USTMA) has welcomed the US Senate confirmation of Jonathan Morrison as Administrator of the National Highway Traffic Safety Administration (NHTSA), a role within the Department of Transportation.

The association issued a statement applauding the confirmation, stressing that Morrison brings extensive leadership and expertise to the agency and the association looks forward to partnering with him to advance a modernised regulatory framework for current and future tyre technologies that enhance performance and road safety.

Congratulating Morrison on his confirmation, Anne Forristall Luke, President and CEO, USTMA, said, “Congratulations, Jonathan Morrison, on your confirmation as NHTSA Administrator! The members of the U.S. tyre manufacturing community look forward to working together to advance our mutual goals of highway and motorist safety.”

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The German Agricultural Society (DLG) has conferred a prestigious Agritechnica Innovation Silver Medal upon Nokian Tyres for its Intuitu 2.0 Smart Pressure Assistant. This next-generation smart tyre technology, designed for the Nokian Soil King VF tractor tyres, was recognised as a significant advancement for the agricultural sector by the award's independent jury of experts.

The Intuitu 2.0 system addresses a core operational challenge for farmers by introducing intelligent load-sensing capabilities. Through specialised sensors embedded within the tyre, the technology continuously monitors the axle load of the tractor during normal driving conditions. It then processes this real-time data to provide the operator with a precise recommendation for the correct tyre pressure. This guidance is crucial for adapting to different tasks, ensuring optimal pressure for both efficient road travel and effective fieldwork, thereby improving overall productivity and reducing soil compaction.

This award-winning innovation is an evolution of Nokian's initial Intuitu concept, which was first introduced in 2020. The system's functionality is accessed via a user-friendly mobile application, making advanced tyre management accessible directly to the farmer. The Agritechnica Innovation Award is a highly respected honour in the global agricultural machinery industry, with winners selected based on their potential to advance farming practices, enhance efficiency and promote sustainability. This year, the jury assessed 251 entries, awarding only two Gold and 22 Silver Medals. The Silver Medal specifically acknowledges innovations that constitute a clear improvement on existing products, demonstrate practical relevance and enhanced reliability and have a positive environmental impact.

The official launch for the Intuitu 2.0 Smart Pressure Assistant is scheduled for October. Following this, the technology will be presented to the international agricultural community at the Agritechnica 2025 fair in Hannover, which runs from 9 to 15 November. The development process for this project received partial financial support from Business Finland.

Paolo Pompei, President & CEO, Nokian Tyres, said, “Intuitu 2.0 provides farmers with a unique way to make the most out of their machines while maximising productivity, lowering fuel consumption, protecting soil and extending tyre life. We are very excited to launch the new technology in October, and very proud that its exceptional value and impact has also been recognised by DLG.”

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ZC Rubber seized the prominent platform of Mining Indonesia 2025 to present its comprehensive portfolio of off-the-road tyres, underscoring its global leadership and strategic growth. The company’s exhibit was built around its two flagship brands, WESTLAKE and TIANLI, which were represented by a robust selection of nine distinct mining tyre models. This lineup, featuring sizes such as 27.00R49 and 24.00R35, was engineered to serve a wide spectrum of mining vehicles, including rigid and articulated dump trucks, across both open-pit and underground environments.

A key product on display was the WESTLAKE CB771, a tyre designed for rigid and wide-body dump trucks. Its construction prioritises durability and operational efficiency, featuring a large block tread for superior traction on challenging terrain. The tyre’s reinforced carcass is built to withstand multiple retreading cycles, while thicker sidewalls offer enhanced protection against cuts, contributing to a lower total cost of ownership. For the larger equipment, the TIANLI 27.00R49 TUE402 was presented as a market-leading solution for giant rigid dump trucks. This model incorporates a high TKPH drive pattern for effective heat dissipation and reduced slippage, alongside specialised compounds that improve wear and cut resistance, ensuring a long service life under extreme loads.

Further highlighting its international manufacturing footprint, ZC Rubber featured a 12.00R24 radial tyre produced by its Indonesian subsidiary, PT. Matahari Tyre Indonesia. This localised production exemplifies the company’s commitment to its globalisation strategy and its ability to serve regional markets effectively. The exhibition at Mining Indonesia 2025 solidifies ZC Rubber’s ongoing mission to expand its global production capacity and refine its product offerings. The company is dedicated to providing high-quality, comprehensive tyre solutions that support the demanding requirements of the mining, construction and transportation industries worldwide.

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Hankook Tire has launched a strategic brand film that forges a direct link between the ABB FIA Formula E World Championship and the FIA World Rally Championship (WRC). This narrative leverages Hankook’s exclusive status as the tyre supplier for both premier FIA series to demonstrate its technological breadth. The film’s core concept is an immersive driver exchange, featuring Maximilian Günther of the DS Penske Formula E Team and Adrien Fourmaux of the Hyundai Shell Mobis World Rally Team. The two drivers swap their respective machines – the all-electric GEN3 Evo race car and the Hyundai i20 N Rally1 rally car – to gain a firsthand understanding of each other's discipline.

The production highlights this contrast by featuring dynamic, side-by-side footage of the specific tyres engineered for each challenge: the GEN3 Evo iON Race electric racing tyre and the extreme all-weather Dynapro R213 rally tyre. This visual comparison serves to underscore Hankook’s claim of race-proven performance and versatility across fundamentally different motorsport environments. The experience of the drivers in unfamiliar cars provides an authentic testament to the tyre technology, a point reinforced by positive feedback from representatives of both championships regarding Hankook’s cross-discipline capabilities.

The film, which includes a surprise cameo from Hankook’s Motorsport Director Manfred Sandbichler to signal the start of the action, is part of a broader content rollout. It will be supported by behind-the-scenes footage and short-form content, released in stages across Hankook’s global website and social media channels. This initiative is a showcase of Hankook’s extensive global motorsport involvement, which includes supplying tyres for over 70 FIA-sanctioned competitions. The data and insights harvested from these extreme conditions are channelled into the company’s advanced R&D infrastructure, including the Technoplex headquarters and the Hankook Technoring proving ground, to accelerate technological innovation and solidify its leadership in the tyre market.

Günther said, “I had full confidence in delivering a strong run thanks to Hankook’s exceptional grip and stability.”

Fourmaux said, “The tyres delivered consistent grip and sharp responsiveness at high speed, enabling me to approach the race with complete composure.”

Arne Dirks, Chief Marketing Officer of WRC Promoter GmbH, said, “WRC embraces innovation, and from the outset, that is exactly what this project has been about. It was fantastic for us to be able to join Formula E, to get insights into their world and share with them the thrill of WRC. This, of course, would not have been possible without Hankook, with whom we are continuing to grow and evolve in the first year of our fruitful relationship.”

“It is a rare and exciting opportunity to see cars from two of the FIA's World Championships taking to the same track at the same time. This video really demonstrates the impressive variety in terms of format and technologies that are offered in top-level FIA competitions, with innovation tailored specifically to the unique challenges of racing and rallying environments. It goes to show that there is not one single solution when it comes to either racing or the wider mobility landscape, and that the core DNA of motor sport is consistent regardless of the category. Thanks to our colleagues at Hankook, Formula E, WRC Promoter and Hyundai for making it happen," said an FIA spokesperson.

Alberto Longo, Co-Founder and Chief Championship Officer, Formula E, said, “As the world’s most progressive and competitive motorsport, Formula E has always been bold and ambitious in its approach to success. What has been central in our DNA, however, is pushing the boundaries of performance. What this film demonstrates is that not only are we here to disrupt and innovate but develop world-leading expertise and new technologies.”

Manfred Sandbichler, Director, Hankook Motorsport, said, “Hankook's technology and quality, trusted by leading motorsports entities such as Formula E and WRC, continue to deliver outstanding performance. Like our motorsports slogan, 'Race Beyond Limits', we remain committed to innovation and the ultimate driving experience.”

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