Bridgestone 'makes gains' under 10-year growth strategy

Tokyo – Bridgestone has reported significant progress under its 10-year strategy to improve profitability, including gaining a clearer vision of its target areas for growth.

In an update on Bridgestone 3.0, launched in 2020, the group said it achieved a ‘reinforcement of [its] tire business’ during the period 2021-2023.

According to the Tokyo-based group, this had been in-line with its goals to evolve the unit into a “sustainable global premium tire business”.

As a next step, Bridgestone said 30 June, the tire business unit will progress strategies based around to the group’s market positions in the main geographic regions.

Over the period 2024-2026, the group aims to acquire “a leading position” in North America and maintain its “clear and absolute leader” position in Japan.

In Europe, meanwhile, Bridgestone's target is to “establish a unique position by integrating solutions while still implementing a follower strategy”.

Bridgestone will also enhance its tire business in Latin America, southeast Asia and the Middle East: regions expected to become “the next profit contribution areas”.

In emerging countries and growing markets, Bridgestone will enhance its position in the “premium” passenger car tire business, especially in India and China.

The group also aims to bring its specialities tires – including off-the-road tires for mining vehicles – business into a ‘premium leader’ position.

Amid difficult 2022 trading conditions, Bridgestone expanded sales and market-share in the premium segment, the group noted in its strategic review.

The group also enhanced its strategic price-management through “flexible and agile supply management,” added the Bridgestone 3.0 progress report.

As a result, the group achieved annual revenue of over Yen4,000 billion for the first time, while adjusted operating profit increased 122% year-on-year to Yen482.6 billion.

Bridgestone linked the jump in earnings to the group’s increased focus on premium areas as well as its implementation of ‘expense structure’ reforms.

“Even during turbulent change in the business environment, the group responded to change flexibly and agilely, steadily moving closer to the “strong” Bridgestone it envisions,” it commented.

For 2023, the group aims to “move even closer to a “strong” Bridgestone, capable of adapting to change as the final year of the 2021-2023 business plan.

The current year, it stated, is also important “for building the foundation for future growth aligned with the 2030 long-term strategic aspiration roadmap.”

Manufacturing footprint

Regarding “past negative legacies” Bridgestone said it had “almost completed” the restructuring of its manufacturing footprint and business portfolio as stated in its mid-term business plan.

The Japanese group, however, will continue to implement expense and cost structure reformation such as reducing fixed costs towards “rebuilding earning power”.

For 2023, Bridgestone plans to achieve sales of around Yen4,100 billion, about Yen510 billion in adjusted operating profit and an adjusted operating profit margin of 12.3% this year.

Moreover, Bridgestone is now targeting a 10.5% - previously 10.0% - return on invested capital (ROIC), which it described as “the most important management KPI in its mid-term business plan.

Going forward, Bridgestone said it will make strategic growth investments and reinforce its structure for producing premium products.

For passenger car tires, these investments will be focused on production of HRD tires and products equipped with its Enliten technology.

The programme, it stated, will be "not only to replace manufacturing equipment at 20 sites around the world, but also to increase production capacity in Brazil, Costa Rica, and Japan."

For truck & bus tires, meanwhile, Bridgestone’s manufacturing structure for new tires and retreads "will be strengthened," in response to sales and market-share expansion, particularly in the US.