Toyo Tire selling majority stake in Chinese manufacturing subsidiary

Hyogo, Japan – Toyo Tire Corp.’s board of directors has agreed to transfer an 86% equity interests in its tire manufacturing subsidiary in China to Liaoning Hengdasheng Investment (LHI), a Shenyang City-based investment group.

In a 14 Feb statement, the Japanese group said it is to sign a memorandum of understanding with LHI by the end of the month for the transfer of interests in Toyo Tire Zhangjiagang (TTZ).

The company cited "strong competition in the local market" as the reason behind the move.

Established in 2010 to manufacture and sell tires for passenger vehicles and light trucks in the Chinese market, TTZ has primarily produced tires for China and other Asian countries.

However, Toyo said, in the Chinese passenger vehicle tire market, the subsidiary had “struggled to fully leverage its competitive advantage as a local manufacturer/supplier, due to slower-than-expected brand and product recognition.”

Given these challenges, Toyo said it had decided to reassess the strategic role of its China business within its global strategy.

LHI has been in a marketing partnership with Toyo since 2023 and the move will enable TTZ to “have access to the necessary operational support.”

Meanwhile, the tires produced and sold by TTZ for Asian countries will be supplied from Toyo production bases in Japan and Malaysia.

The subsidiary reported sales of Yuan328 million (€43 million) and loss of Yuan5 million in 2024.