My first year as Co-COO has been very fulfilling and challenging at the same time. Our consumer tire business achieved record high sales revenue and profit in overseas markets, including Europe, Asia and India. By focusing our sales efforts on our ADVAN, GEOLANDAR, and winter tires (AGW), we were able to increase our market share in high-inch tires, which we consider to be an important accomplishment.
Meanwhile, our OHT business has been dealing with a cyclical downturn in the market for agricultural machinery. This has weighed on Y-TWS earnings, which are highly dependent on sales to agricultural machinery makers. In response, we have taken concrete measures to optimize our footprint by closing three plants and increasing our market share in the aftermarket. We believe these strong actions will improve our profitability in the medium term, while making us very competitive in the longer term.

The OHT business is the most promising segment in the tire industry and is expected to expand at an annual growth rate of 6% over the long term. We therefore continue to consider it to be a business that will play a key role in our medium-term management plan YX2026. OHT segment growth is being driven by macroeconomic trends, such as population growth and the shift to cleaner energy sources, that are contributing to increased demand for tires for agricultural machinery, construction and mining vehicles.
In addition, given the high barriers to entry into the OHT segment, we expect our OHT to generate higher margins than passenger car tires and truck/bus tires. OHT are technologically complex to design and manufacture. In addition, their use in a wide variety of applications with very different needs can only be fully met by suppliers with a product lineup of about nearly 6,000 SKUs. While these factors contribute to the high barrier to entry mentioned above, they are a source of our competitive advantage in our OHT business.
In addition, the acquisition of Goodyear’s OTR business has given us a full product lineup, and we have established a unique position as the only OHT player with strengths in both the premium and value segments of the OHT market. In 2024, we reorganized our OHT business into three internal companies. Y-TWS and Y-OTR are specializing in the premium segment, and Y-ATG is focused on the value segment. While maintaining independent sales functions as they implement strategies tailored to their specific market segment, the three companies are maximizing the use of Group synergies by integrating such back-end functions as procurement and production. This organizational structure enables each company to leverage economies of scale to improve operational efficiency while remaining customer centric and agile. All three companies are aiming to growth faster than their individual markets by focusing on new product development, deepening their relationships with makers of agricultural machinery, construction and mining vehicles, and aggressively pursuing aftermarket sales.

Yokohama India Pvt. Ltd. (YIN) is the Yokohama Rubber Group’s passenger car tire production and sales company in India. YIN has enjoyed remarkable growth since it established a passionate local management team five years ago that has a deep knowledge of the local market. In addition to reducing processing costs about 50%, YIN has increased its market share nearly four times by strengthening brand positioning and building an affiliated sales store network of more than 500 stores. YIN currently is one of the Yokohama Rubber Group’s most profitable member and also may have one of the highest profit margins in the whole tire industry. In addition to increasing sales and contributing to Group earnings, YIN’s various improvement activities are serving as a model for other Group members. As such, YIN is playing on extremely important role in the Group’s medium-term management plan YX2026.
The Indian passenger car tire market is becoming more competitive owing to recent re-entry of a major global tire maker and its construction of a new plant. Nonetheless, I am confident that YIN’s strategy of building deep relationships with its sales network partners and helping them achieve higher profitability than dealers selling our competitors' tires will enable it to continue increasing its market share.
However, YIN’s limited penetration of the original equipment (OE) tire market in India is an issue that needs addressing. YIN's limited production capacity in recent years have prevented it from increasing sales of OE tires. This has hurt not only brand visibility but also sales of replacement tires in the aftermarket. YIN is addressing this issue in two ways. First, we have formed a dedicated team focused on the car dealer sales channel and are already expanding our market share of tire sales at car dealerships in India. Secondly, with new capacity provided by the startup of new production line, we are stepping up marketing of OE to car makers and aiming to be as successful as we are in the aftermarket.

One of the most notable achievements of the sustainability initiatives at our OHT business and Indian business is the employment of women at production sites. Currently, more than 1,000 women are working at our plants across India. It is not very common for women to work in tire manufacturing plants in India, but we made it possible by proactively reforming our processes and workplace culture. This initiative is not only about women' empowerment; it also is benefiting our business. Female employees have lower absentee rates and are more meticulous and precise, which helps improve higher productivity and quality. In addition to fostering a corporate culture that respects diversity, we are contributing to regional development by creating employment opportunities for women in local communities and promoting their economic independence.
As for our environment-related sustainability measures, about 50% of the electricity consumed by our plants in India is generated by renewable energy sources, such as wind and solar. This is reducing our energy cost, as renewable energy is more economical in India than coal-fired power generation. We would like to increase the percentage of electricity generated by renewable energy, but we face some restrictions due to government regulations. In addition, we have invested in machinery that shreds scraps generated during the tire manufacturing process, so that we can use them as a recycled material, thus reducing waste and improving resource efficiency. We believe these initiatives’ contributions to reducing environmental impact and lowering costs will strengthen our foundation for sustainable growth.

Our OHT business and Indian business have performed well in the past and are ready to deliver results for YX2026 and beyond. We will do everything we can to help Yokohama Rubber Group become one of the top 5 tire makers in the world.
Under Chairman & CEO Yamaishi’s leadership, we have grown into a business that is highly regarded within the industry. We believe that the measures we are currently implementing will significantly improve our profitability and mitigate the effects of economic fluctuations. I remain excited about the future and look forward to making more contributions to the sustainable growth and success of the Yokohama Rubber Group.