One year has passed since I assumed the position of President & COO as part of a new three-person executive management team that has brought together three specialists with different experiences and strengths. I believe that our ability to bring different expertise to the table has created a well-balanced management team.
Looking back on Yokohama Rubber’s recent past, I think I can say our globalization has rapidly advanced, thanks in no small part to our M&A deals. The Yokohama Rubber Group now has 34,000 employees around the world who are contributing to our very high growth rate. Japanese companies have their strengths, including excellent manufacturing. However, taking a more global perspective has enabled me to recognize many different manufacturing strengths in companies around the world, especially in China, India, and Europe.
Here at Yokohama Rubber, we are in the middle of our YX2026 medium-term management plan. An important aspect of this plan is the need to balance our commitment to high quality with low cost and speed. Looking at today’s global tire market, the sudden rise of emerging Chinese tire makers has turned the markets for passenger cars, trucks, and buses into a Red Ocean. I am impressed by the speed demonstrated by these emerging Chinese tire makers. Also, I see a big gap between their emphasis on keeping costs down and supplying low-cost products and our meticulous attention to manufacturing high-quality products. Of course, we must continue to develop high-quality products. However, if we are to compete in these Red Ocean markets, we must address two major issues: reducing costs and improving production efficiency. We have a long history of using high-quality, expensive raw materials to develop high-quality tires. Moving forward, we must use our accumulated technological capabilities to develop technologies that will reduce costs. For example, expanding our raw material supply chain will enable us to procure lower-cost materials. However, we also need to develop technologies that will enable us to make full use of those materials.

Premium car makers in Europe and other regions demand tires that not only deliver superior maneuverability but also take environmental performance into consideration. Many premium car makers select our tires as original equipment on their new cars because they highly evaluate our unique compound blending technology and our ability to finish tires according to their specific needs. I consider these technological capabilities to be one of our major strengths.
While we will continue to make use of our many accumulated technologies to expand our lineup of high-value-added tires, we must also pay greater attention to speed and costs from the early planning and development stages in order to provide tires Management Strategy 21 that meet the needs of our customers. We therefore are now working to create a more efficient development and production system. We currently are advancing our AGW strategy centered on our ADVAN, GEOLANDAR, and winter tires (AGW), and we will continue to expand our sales and lineup of high-value-added tires. Going forward, we want to continue providing customers with tires that reflect our constant focus on differentiating our products from those of other tire makers, and we are confident that we will be able to develop such tires.

Our acquisitions of ATG in 2016, TWS in 2023, and Goodyear’s OTR business in 2025 have strengthened our global production and logistics network while also expanding our supply chain. These new Group members are part of our continuing effort to establish a system that can respond quickly and flexibly to diverse market needs. Each of these Group members have different strengths and weaknesses and are active in different markets. By working closely with them, we have been able to make steady progress over the past few years.
We have been good at producing a wide variety of products in small lots. However, in the standard passenger car tire area, we plan to use common parts as much as possible, increase production lot sizes, and use the latest automated equipment to increase productivity as we seek to raise cost competitiveness. The new plants currently under construction in China and Mexico will be launched early to achieve these plans.
Until recently, building a plant in one year was not something that even crossed our minds, but we are now in the process of realizing a new form of manufacturing created by combining the corporate cultures and their emphasis on speed of acquired companies with the Yokohama Rubber Group's focus on quality. We have gained a lot through M&A, and I think this is giving us strengths that other companies do not have. Considering that the tires needed by customers and the required technologies differ from region to region, it is extremely important that we have the ability to grasp such information and incorporate it into our product development.

Human resource development is another important initiative in our growth strategy. For example, to improve the quality and speed of technological development, it is important that staff know how to apply large amounts of accumulated data in the development of new products. HAICoLab, a proprietary AI utilization framework, enables our younger employees to quickly acquire the knowledge they need to create basic tire designs. It also enables our development staff to know the factors that led to AI-generated answers, giving them new insights into new areas. We also are using HAICoLab to conduct virtual experiments to develop tires for certain car makers. Moving forward, we will continue to develop personnel who can make full use of HAICoLab to bring about new innovations. DX personnel are a core part of our human capital strategy, and we plan to focus their efforts on improving operations and changing processes. Based on our overall DX concept, we will focus on developing human resources that will be able to use AI to bring about changes in all business units. The expanding use of autonomous driving and EVs is increasing demand for tires that can meet increasingly strict requirements for fuel efficiency, quietness, and durability. Our response to this changing market will focus on developing technologies that contribute to reducing the supply chain’s environmental impact and achieving carbon neutrality by, for example, reducing the amount of rubber used in our tires and lengthening their usable lifespan.
We have FY2030 and FY2050 targets for reducing CO2 emissions and increasing the ratio of renewable & recycled raw materials used in our products, and we consider achieving those goals by developing high-quality products while reducing costs as one of our key corporate missions. We also will continue our many other efforts aimed at achieving our goals in 2030 and beyond, including steady energy conservation activities, a shift to renewable energy for fuels and electricity, and the development of renewable & recycled raw materials.

As a tire maker, we will continue to do our utmost to develop high-value added products that please our customers. We will enhance our corporate value by reducing costs even as we continue to deliver tires that provide the excellent performance and high quality expected of YOKOHAMA tires. I hope that all of our stakeholders will continue to have high expectations of Yokohama Rubber in the future.