I was appointed president in 2017, when Yokohama Rubber celebrated its 100th anniversary.
We have continued to grow based on our Corporate Philosophy of “To enrich people’s lives and contribute to their greater happiness and well-being by devoting our wholehearted energies and advanced technology to the creation of beneficial products.”
However, to put it a bit harshly, a bit of dust has accumulated over the past 100 years.
I am thinking specifically of the technology and production departments that are the foundation of Yokohama Rubber’s business.
We still hold to the mindset that so long as we make good products we will succeed, without considering the cost. With the automotive industry facing a once-in-a-century major transformation, this complacency on the technological and production fronts has caused our competitiveness to wane, and we are now being threatened by makers from emerging countries such as China and India.
I believe that my mission is to sweep away this dust to create an organization that can survive for another 100 years. As such, I have been implementing reforms over the past seven years.
We have made progress in transforming our business structure, particularly in the planning, sales, and marketing departments.
However, there is still room for improvement in the technology and production departments. I believe that if we can change the mindset of all departments across the board, from planning to development, production, logistics, and sales, we will be able to survive.
When I became president, sales revenue was about \600 billion.
We are now close to achieving sales revenue of \1 trillion through business acquisitions and other measures. However, due to the rapid expansion of overseas sales and significant changes in the organization, certain aspects of our business have become sluggish.
To address these management issues, we decided to appoint a new management team. As CEO and Chairman of the Board, I will handle major decisions regarding overall management and our business in North America. Shinji Seimiya was appointed President & COO, responsible for technology and production, quality assurance, and business in Japan, China and elsewhere in Asia. Nitin Mantri was appointed Senior Managing Officer & Co-COO, responsible for our prized OHT (off-highway tire) business and operations in other overseas regions.
We will each carry out our roles responsibly, supporting the rapid expansion of Yokohama Rubber.

There is a growing sense of crisis around the world about environmental, economic, and social sustainability issues, such as climate change, biodiversity, and human rights. As such, it is important that we create shared value with stakeholders. With the formulation of the new YX2026 management plan launched in fiscal 2024, the Yokohama Rubber Group reviewed its materiality in light of changes in the business environment and societal issues, and identified new materiality that takes into account the impact that our business activities have on society and the environment, as well as how society and the environment affect our business activities. In line with this materiality, we will implement initiatives aimed at achieving our vision.
In recent years, the production capacity of Chinese tire makers has gained momentum. For example, one-third of the world’s consumer tires are now being produced in China, and nearly half of this output is exported. The commercial TBR (truck and bus tire) business in China is gaining even further, with Chinese makers accounting for nearly half of the world’s production volume, half of which is exported.
Nevertheless, the position of Japanese tire makers remains firm.
The four major tire makers (Bridgestone, Sumitomo Rubber, Yokohama Rubber, and TOYO TIRES) together hold a 25% share of the \20 trillion global tire market. Japanese tire makers are still in a strong market position, even as the market share of Japanese companies in many automotive-related industries is declining. Further, although our overseas network is expanding, keeping production in Japan creates employment, and exports bring in foreign currency. Having served as Chairman of the Japan Automobile Tyre Manufacturers Association (JATMA), I can affirm that all four of Japan’s major tire makers, as well as the Ministry of Economy, Trade and Industry, hold a similar view. Therefore, I believe that our purpose as a technology-oriented Japanese company remains firm.
A particular strength for the Yokohama Rubber Group is the OHT business. The OHT market is currently worth about \4 trillion, and we anticipate an annual growth rate of about 6%, compared to just 2% for the consumer tire market. We estimate that agricultural and forestry machinery will account for about 40% of global OHT demand.
The Yokohama Rubber Group has the top share in these areas, overtaking Michelin. We also have the second-largest share in industrial and port-use machinery tires, which accounts for 25% of the OHT market.
While maintaining these market positions, to address societal issues, we will fulfill our responsibilities as a maker by applying our Corporate Philosophy: “To enrich people’s lives and contribute to their greater happiness and well-being by devoting our wholehearted energies and advanced technology to the creation of beneficial products.”

The YX2023 management plan covered the three years from 2021 to 2023 as the “Culmination of the past 100 years.” We came close to achieving 100% of the aims of this plan.
During each fiscal year, we were able to significantly exceed our initial sales revenue and business profit targets. In fiscal 2023, although sales revenue did not reach \1 trillion, we posted sales revenue of \985.3 billion, greatly surpassing our initial target of \700 billion. Business profit was \99.1 billion, surpassing the initial target of \70 billion. The D/E ratio fell short of target due to the acquisition of Trelleborg Wheel Systems Holding AB (TWS), while ROE was also below target at 9.9%. However, operating cash flow expanded to \267.2 billion (cumulative total for three years), surpassing the target of \250 billion.
We achieved our grand strategy of restructuring the Tire Business. In 2020, the year when the YX2023 plan was formulated, our consumer tire to commercial tire sales ratio was 3:2, while the global market ratio was an even 1:1. The acquisition of TWS in fiscal 2023 dramatically increased both production capacity and revenue for commercial tires. In addition, we were able to offer a top-class product lineup in the OHT category, achieving a 1:1 consumer tire to commercial tire sales ratio, the same ratio as the general market. In addition, the composition of our commercial tire business is now more heavily weighted toward the more highly profitable OHT, with an OHT to TBR ratio of 2:1, the reverse of the global market’s 2:1 ratio favoring TBR.
Structural reforms of our MB Business were completed with the sale of the Hamatite business in November 2021, and the integration of the aerospace products division into the industrial products division in March 2022. We now have a solid foundation for growth under the new management plan.
Cross-shareholdings have also been steadily unraveled since I became president in 2017. We have reduced our position from 122 issues with a total balance sheet value of \96 billion to 86 issues worth \77 billion as of the end of 2023. We also sold idle assets, businesses, and subsidiaries, generating a total of more than \100 billion over the past seven years. These funds have been allocated to strategic investments for further growth that will enhance our corporate value.

I do not think that we were able to fully transform Yokohama Rubber under the YX2023 plan. Accordingly, we launched the YX2026 plan in fiscal 2024 with the intent of continuing the “exploitation” and “exploration” strategies implemented during YX2023, and completing the transformation of the Yokohama Rubber Group, leaving no negative legacies for the next generation.
The YX2026 plan aims to establish a foundation to address two major concerns: 1) How to respond to China’s aggressive rise in the passenger car tire market, which is one of our priority areas, and 2) How to move away from competitive Red Ocean areas, and develop business in more open Blue Ocean markets.
Our fundamental policy for increasing corporate value is to pursue a growth strategy. Rather than the gradual gains we have made to date, we are aiming for “Hockey Stick Growth” that we think matches our stakeholders’ expectations.
First, we aim to achieve sales revenue of \1,000 billion with business profit \100 billion, levels that show that we are a leading Japanese company. We expect to achieve that level this fiscal year, and have set targets for fiscal 2026 of \1,150 billion in sales revenue, with business profit of \130 billion.
By the end of the YX2026 plan, in the passenger car tire business, we expect that our high value-added products ADVAN, GEOLANDAR, and winter tires, (which we collectively refer to as “AGW”), will account for half of the total production volume, and generate a high profit margin. Regarding Yokohama brand standard tires, which account for the remaining 50% of our passenger car tires, we will increase revenue and earnings by reducing costs, generating profits, and firmly competing against China. As part of these efforts, we are building a new factory for passenger car tire production in Mexico to increase our local production capacity to meet local consumption in the North American market. This factory is scheduled to start production in the first quarter of 2027 with a capacity of five million tires per year, with the potential for future expansion.
In the commercial tire business, since Chinese makers are emerging in the TBR business, we will increase sales and profits by concentrating resources on business areas where Yokohama Rubber has competitive advantages. Growth of sales in its commercial tire business is gradual but steady, and we hope to expand in such areas. In the OHT business, the acquisition of TWS has provided us with production bases in the major OHT markets of Europe and the US, which will generate synergies going forward.

Companies must grow with a focus on increasing revenue and earnings, but we also view sustainability initiatives as a strategy to strengthen our business. Through a variety of activities from an ESG (environment, society, and governance) perspective, we aim to achieve sustainable growth in corporate value. Sustainability initiatives, as corporate activities, should contribute to corporate growth. Instead of making excessive investments now that will place a burden on future management, we need to ensure that our environment-related investments conform to normal investment recovery standards, and are compatible with our efforts to generate earnings.
For reducing greenhouse gas emissions, which includes efforts by our sales subsidiary Yokohama-TWS (Y-TWS), we plan to reduce greenhouse gas emissions by 30% by 2026 versus 2019 levels, and 40% by 2030, while also lowering costs. We will continue this effort after 2030, aiming to achieve carbon net zero by 2050.
To further the use of sustainable raw materials, we have set a usage target of 28% by 2026 and 30% by 2030, without increasing costs. Utilizing our technical capabilities, we believe it is possible to expand sustainable raw material use to 40% by 2030 without any additional burden.
In addition, we plan to conduct an employee engagement survey starting in fiscal 2024. As we begin to clarify the mechanisms and methods that make our company profitable, we want to create an organization where employees understand these processes, work toward achieving targets, and share in the rewards. Further, as KPIs for human resource development, by fiscal 2026 we aim for 15% of department heads to have participated in MBA programs or received other types of management education, and 10% of administrative and technical staff to have participated in DX leadership training.
We are committed to pursuing these initiatives to achieve our goals of sustainable growth and increasing corporate value.

With the aim of strengthening the supervisory function of the Board of Directors and further enhancing corporate governance, in 2023, we transitioned our governance structure from a company with an Audit & Supervisory Board to a company with an Audit and Supervisory Committee. We believe governance effectiveness will be ensured by the composition of our Board of Directors, which has eight internal directors and seven external directors. Two internal and three external directors serve on the Personnel and Remuneration Committee for Corporate Officers and Directors. Our challenge for the future is to change our consciousness while respecting our history. When a Yokohama Head Office employee assumes the position of president of an overseas subsidiary or sales company, he or she is likely to make decisions based on a Japanese way of thinking. To change this mindset and achieve better execution of our global strategy, we need to appoint management personnel who understand the local market and staff. We also are considering increasing the number of non-Japanese directors, which currently is only one - Mr. Nitin Mantri.