THE YOKOHAMA RUBBER CO., LTD.

Business Details

Manufactures and sells a diverse range of tires for passenger cars, trucks and buses, agricultural machinery, mining and construction vehicles, industrial vehicles, and forestry machinery. Comprised of Tire Consumer Products (OE & Replacement) and Off-Highway Tires (OHT). Serves domestic and overseas automakers and the replacement market as customers, driving a shift in revenue structure centered on high-value-added products (AGW) and high-inch products. The acquisition of Goodyear's OTR business has achieved a full lineup of OHT products.

Recent Overview

Q1 FY2026 business profit surged 89.1% year-on-year, with business profit margin improving to 15.1%

In Q1 FY2026 (ending March 2026) (January–March 2026), Tires segment revenue was ¥278,118 million (up 11.1% year on year), and business profit was ¥42,019 million (up 89.1% year on year), representing a substantial increase in profit. Increased sales of high-value-added products (AGW) and high-inch products, higher sales volumes in the OHT business, and internal efforts on fundamental cost improvement and structural reform all contributed. On the other hand, one-time costs associated with the closure of the Salem, Virginia plant in the U.S. affected the operating profit level. Sluggish sales by Japanese automakers in China and unfavorable weather in North America were partial headwinds.

Key Products

Growth Drivers

• Improved revenue mix through increased sales of high-value-added products (AGW) such as ADVAN and GEOLANDAR, winter tires, and high-inch products
• Full lineup of OHT products and expanded sales channels and production capacity through the acquisition of Goodyear's OTR business
• Sales growth in Europe and North America through a multi-brand strategy (Mitas, Alliance, Galaxy) for agricultural machinery tires
• Expanded OE fitment on premium vehicles in Europe and the U.S. (mainly SUV and CUV models)
• Development of new business partners and expansion of transactions with existing customers in emerging markets such as China and India
• Improved profitability through fundamental cost reductions and structural reform

Risks

• Risk of declining automotive tire demand due to economic slowdown in major markets such as the U.S., Europe, and China
• Risk of rising manufacturing costs due to higher prices of raw materials such as natural rubber and petrochemical products
• Risk of declining market share and intensifying price competition due to the rise of low-cost, low-price emerging tire manufacturers
• Risk of reduced overseas business earnings due to exchange rate fluctuations (particularly yen appreciation)
• Risk of goodwill impairment if the performance of Goodyear's OTR business falls short of assumptions at the time of acquisition (goodwill balance of ¥336,597 million)
• Risk of one-time costs (¥13.0 billion recorded in Q1 FY2026, ending March 2026) and additional costs associated with the closure of the Salem, Virginia plant in the U.S.
• Risk of declining OE tire demand due to sluggish sales by Japanese automakers in China
• Seasonal fluctuation risk due to concentration of studless tire sales (e.g., reduced snowfall)