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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In a significant expansion of its global retail footprint, NEXEN TIRE has inaugurated its first dedicated brand shops in Bahrain and Kuwait. This strategic move underscores the company's focused effort to grow within key emerging markets, including the Middle East, South America and Southeast Asia. The Middle East is particularly vital, representing the company's third-largest overseas market, a position cultivated since establishing its Dubai branch in 2009.

The expansion is driven by a ‘shop branding’ strategy, which involves collaborating with local partners to apply a consistent and recognisable brand identity to tire stores. This approach ensures a uniform customer experience through standardised purple signage, interior design and displays, thereby strengthening brand recognition and loyalty in a cost-effective manner. This flexible model allows NEXEN TIRE to create tailored, immersive brand environments that adapt to the specific needs of each local market while maintaining a cohesive global image.

The company's global branding initiative has seen remarkable progress. In 2025 alone, NEXEN TIRE introduced its brand identity to more than 130 stores worldwide. This builds upon a substantial foundation of approximately 400 stores that have been similarly branded over the preceding four years. This rapid growth has been evident across diverse regions. In Europe, the brand's presence was solidified in major cities including Frankfurt, Milan, Lyon and London. Simultaneously, a significant rollout occurred in Turkey, with 50 local stores in metropolitan hubs like Istanbul and Ankara adopting the new identity.

Beyond established markets, NEXEN TIRE is making substantial inroads in high-potential emerging economies. Recent efforts have resulted in 12 branded stores across the Middle East and North Africa, 16 in South American nations such as Brazil and Argentina and 13 throughout Southeast Asia, including Malaysia and Thailand. Through these partnerships with local distributors, NEXEN TIRE is systematically enhancing its international profile and market penetration.

John Bosco (Hyeon Suk) Kim, CEO, NEXEN TIRE, said, “Our shop branding project serves as a strategic foundation for enhancing brand value in developed markets while unlocking growth potential in emerging economies. Moving forward, we will continue to strengthen localised, customised marketing and build global partnerships, expanding customer touchpoints to further solidify our position in the global market.”

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Yokohama Rubber Co has announced that its Mexican subsidiary, Yokohama Industries Americas de Mexico, S. de R.L. de C.V. (YIA Mexico), will expand its production capacity. YIA Mexico manufactures air conditioning and transmission oil cooling hose assemblies for the North American market.

The expansion involves constructing a new building on approximately 32,000 square metres of land adjacent to the existing plant, more than doubling the current site area. Construction is scheduled to begin in the fourth quarter of 2025, with operations expected to start in the fourth quarter of 2026.

The expansion aims to strengthen YIA Mexico’s profitability and support the continued growth of Yokohama Rubber’s hose and couplings business.

The move is part of the growth strategy within Yokohama Transformation 2026 (YX2026), the company’s medium-term management plan, which positions the hose and couplings business as a driver. Expanding capacity at YIA Mexico is an effort to restructure the MB Segment’s value chain and North American production network.

Prior to construction, a groundbreaking ceremony was held on 14 October, attended by local government officials, including the governor of the state of Aguascalientes and the mayor of the city of San Francisco de los Romo.

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In a significant move to reinforce their strategic partnership, ZC Rubber recently hosted a delegation from International Tyres, the exclusive UK distributor for its WESTLAKE tyre brand, at its Hangzhou headquarters. The visit, which included Managing Director Andy Jackson and Commercial Director Richard Allen, was centred on a mutual dedication to providing superior product quality, reliable supply chains and excellent service for commercial vehicle operators in the United Kingdom. The itinerary provided a comprehensive look into ZC Rubber's operations, beginning with a corporate showroom that detailed the company's brand history, global presence and future innovation strategies, including its sustainability efforts.

The tour then progressed to two key manufacturing facilities. The first was the Future Factory for passenger car tyres, where the delegation observed highly automated production lines. This facility demonstrated a commitment to smart manufacturing through real-time quality monitoring, end-to-end traceability and automated logistics, all designed to ensure consistent product quality while improving environmental efficiency. The second site visited was the Zhongce Qingquan TBR plant, which specialises in all-steel truck and bus radial tyres. Here, the guests witnessed the entire production process, from initial material mixing to final inspection.

The tour emphasised robust construction techniques, precise engineering and stringent quality checks that contribute to the tyre's durability and potential for retreading. This collaborative visit has set a strong foundation for the two companies to continue aligning on product availability and responsive support, ensuring that UK fleets receive dependable performance and value from WESTLAKE tyres across various demanding applications.

Leo Liao, European Sales Director of ZC Rubber International Business, said, “International Tyres is a trusted partner, and visits like this ensure we stay closely aligned with the expectations of UK customers.”

Andy Jackson, Managing Director, International Tyres, said, “We appreciated the open access to ZC Rubber’s teams and facilities. Seeing the manufacturing and quality processes behind WESTLAKE strengthens our confidence in the product and our ability to support fleets across the UK.”

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The Vredestein Wintrac Pro+ has earned a notable third-place ranking with an 'Exemplary' rating in a major test of high-performance winter tyres conducted by Auto Bild Allrad. The German magazine’s rigorous assessment involved 12 different tyre models in size 215/55 R 17, putting them through a demanding series of tests on specialised tracks in Finland and Germany. These trials – performed with a Volkswagen T-Roc as the primary test vehicle – were designed to evaluate safety and performance across the most challenging winter conditions, from icy and snow-covered roads to wet surfaces.

Testers praised the tyre for its exemplary balance and specifically highlighted its outstanding wet grip and traction. They described its performance as confident and well-rounded, noting its ability to deliver consistent grip and precise steering control even in highly demanding scenarios. This performance profile confirms the tyre's design and engineering purpose as an ideal choice for modern high-performance vehicles.

The Wintrac Pro+ is the latest flagship winter tyre from Vredestein, a brand with a heritage of winter innovation spanning more than half a century. Its advanced technology includes a high-silica tread compound and an optimised directional pattern. This combination is engineered to provide exceptional braking and handling on snow, slush and ice while also contributing to reduced rolling resistance for improved fuel efficiency.

To accommodate a wide array of vehicles, the tyre is available in over 120 different sizes fitting rims from 17 to 22 inches. The majority of these variants carry a ‘Y’ speed rating, meaning they are certified for speeds up to 300 kmph. Furthermore, every tyre in the range carries the Three Peak Mountain Snowflake symbol, certifying that it meets strict European regulatory standards for severe snow service.

Daniele Lorenzetti, Chief Technology Officer, Apollo Tyres Ltd, said, “The Vredestein Pro+ is a premium winter tyre designed specifically for high-performance cars and SUVs, including the latest generation of performance-oriented electric vehicles. With this segment continuing to grow rapidly, it’s significant that Auto Bild Allrad has once again endorsed the competitiveness of our products. The Wintrac Pro+ combines exceptional winter capability with the refinement and confidence expected by today’s drivers.”

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