Tokyo—The Yokohama Rubber Co., Ltd., today announced that it finalized a fundamental strategy based on its new corporate grand design. In order to develop the strategy, the company has cross-divisionally studied what its corporate goal should be, by forecasting changes in lifestyle, society, automotive industry and other important factors after 10 years from now. As a result, the Tokyo-based tire manufacturer created the strategy to achieve a goal of becoming a company with strong brand power driven by the company's new philosophy: "We supply customers worldwide with excellent products and services based on our proprietary technologies." In the process of finalizing the strategy, the company employed "Growth", "Production innovation" and "Globalization" as basic policies and set the financial goals to attain at least "a turnover of total assets", "five per cent sales growth" and "operating profit to net sales ratio of eight per cent" for facilitating business growth and upgrading financial strength.

The framework of the new strategy consists of business strategies for tire and other multiple businesses and research and development strategies.

Yokohama Rubber's Tire Group shoulders tire businesses as the core of the company. The group has the three major strategies. The first is the HPT Strategy to further promote the company's image as the supplier of YOKOHAMA-brand high-performance tires by using cutting-edge technologies for the development of high-performance, high quality new products. The second is the TB Strategy for launching world-level new products in the area of tires for trucks and buses. The third is the International Strategy that focuses on the expansion of export businesses, the establishment of a network of manufacturing bases in Asian countries, and the follow-up of global procurement activities by Japanese automakers.

The Multiple Business Group aims to become the main driver for corporate growth. One of its goals is to increase the ratio accounted for by new products in group sales to 50 per cent by utilizing superior technologies to promote the development and launch of new products. In order to achieve this goal, the group plans to further expand product areas where it is already strong and peripheral businesses. Specifically, it plans to rely on the Outdistance Strategy to expand and strengthen businesses and operations that are already ranked Number One or Two in terms of market share. Other main business strategies are the International Strategy that emphasizes businesses in China and North America, and the Business Development Strategy to create and establish a new business as the group's sixth pillar.

In making the R&D Strategy, Yokohama Rubber placed importance on long-term projects and clarified strategies to support business growth by developing world-leading products based on technological achievements from those projects. Under the theme of "Superior Function, Safety and Environment-Friendliness", the company will upgrade its R&D capabilities by drawing on its expertise in the development of world's first technologies and materials and in material technology, analytical simulation technology and process technology.

Yokohama Rubber's financial goals for 2005 are to achieve 460 billion yen in net sales and 35 billion yen in operating profit on a consolidated basis. Compared to 2002, these figures are up 15.0 per cent and 52.2 per cent, respectively. The company's "1-5-8 Financial Goals" call for the achievement of the asset turnover of 1.0, the sales growth of 4.8 per cent (annual average) and the operating profit to net sales ratio of 7.6 per cent in 2005.