Toyo Tire Corporation

Business Details

The core segment engaged in the manufacture and sale of passenger car tires, light truck tires, truck and bus tires, and other related products. In Japan, the company offers replacement and OEM tires, while overseas, Toyo Tire U.S.A. Corp. and Nitto Tire U.S.A. Inc. cover the North American market, and Toyo Tire Serbia d.o.o. covers the European market. Manufacturing sites are located in Japan, North America, Malaysia, and Serbia. As the core business accounting for approximately 91% of consolidated net sales, the segment maintains high profitability by focusing on large-diameter light truck tires and SUV tires as priority products.

Recent Overview

Q1 net sales declined 3.6% year on year; Europe and Japan declined significantly, while OEM tires increased substantially.

In Q1 FY2026 (ending March 2026), Tire Business net sales were ¥119,329 million (down ¥4,434 million, or 3.6%, year on year), and operating income was ¥20,042 million (down ¥1,859 million, or 8.5%, year on year). In the North American replacement market, price increases took hold and solid demand for OPEN COUNTRY and NITTO GRAPPLER improved the product mix, keeping sales roughly in line with the prior year. Europe is in a transitional period toward a local production-for-local-consumption model centered on the Serbia plant, resulting in a significant decline in both sales volume and revenue. In Japan, sales declined significantly due to a decrease in winter tire demand following the rebound from heavy snowfall in the prior year, as well as supply constraints. On the other hand, OEM tires saw a significant increase in both sales volume and revenue due to model changes of large SUVs, among other factors.

Key Products

Growth Drivers

• Solid demand for large-diameter light truck and SUV tires (OPEN COUNTRY, NITTO GRAPPLER Series) in the North American market and improved product mix through price increase penetration
• Significant increase in sales volume and revenue of OEM tires due to model changes of large SUV models, among other factors
• Advancement of the European local production-for-local-consumption structure centered on the Serbia plant, supporting expanded sales in Europe from the second half onward
• Expansion of priority domestic products through the launch of new truck and bus tire products (All Weather M630, Rib M170)
• Promotion of growth strategy, structural reform, and foundation strengthening under the five-year medium-term management plan "Chuki '26" starting in 2026

Risks

• Continued contraction of the North American replacement tire market (consumer spending restraint and trade-down to Asian products amid inflation and Middle East tensions)
• Risk of a significant decline in sales volume and revenue during the transitional period of shifting to a local production-for-local-consumption structure in the European market
• Decline in domestic replacement tire demand (decrease in winter tire demand due to rebound from the prior year's heavy snowfall) and supply-side constraints
• Changes in the competitive environment and uncertainty stemming from trade policy and tariff increases under the Trump administration
• Foreign exchange risk centered on the US dollar (profit pressure from yen appreciation)
• Risk of rising costs due to inflation and increases in raw material prices
• Impact on demand and supply chains from heightened Middle East tensions and geopolitical risk