Improved sales mix enabled Bridgestone Corp. to achieve a 5% gain in revenue during 2023.
The Tokyo, Japan-based company posted revenue of $28.7 billion and an operating profit of $3.2 billion for the year.
In the Americas, Bridgestone achieved revenue of around $13.8 billion.
During 2023, “we thoroughly improved sales mix” by increasing sales of high rim-diameter (18 inches and up) tires, while working to reduce “loss-making and unprofitable areas,” say Bridgestone officials.
“Amid a situation where demand for new tires is becoming more severe than expected, in (the replacement PBR) business in North America, where we have a strong business foundation ... we were able to improve our share of new and retread tires in the premium segment.
“In addition, mining tires achieved solid sales and market share gains,” which “underpinned the company’s overall performance in a challenging business environment.”
When commenting on the company’s operating profit during 2023, Bridgestone officials said that “the negative impact of manufacturing costs due to raw materials and inflation (energy, labor costs, etc.) was off-set by improvements in price and sales mix, along with strong expense management and on-site improvement in production.
"However, there was still a negative impact from decreased sales volume and increased conversion cost. Additionally, Argentina’s hyperinflationary accounting had a significant negative impact” on 2023 operating profit levels.
Performance by segment
In the passenger tire channel, “vehicle production conditions at automobile companies is improving. Tire sales increased year-on-year, excluding some regions.”
However, replacement passenger tire sales declined year-over-year due to “economic slowdown, mainly caused by sales decline from weak winter tire demand in Japan due to (the) warm winter climate.”
Replacement TBR tire sales also fell in the U.S. and Europe due to economic conditions, “with Europe showing a significant decrease in sales.”
OE TBR tire sales “continued to recover from the impact of semi-conductor shortages.”
In the OTR tire segment, OE sales increased, but replacement sales for medium and small OTR tires decreased. Meanwhile, demand for steel and copper remained “resilient,” which helped mining tire sales.
Inventory levels
In North America, Bridgestone officials report that “normalization” of TBR tire inventory “has progressed for most dealers. However, some dealers ended slightly higher than average” as 2023 ended.
Normalization of dealer inventory levels is expected to “complete” during the first quarter of 2024.
On the passenger tire side, inventory normalization among North American tire dealers completed near the end of the first half of 2023, “which led recovery trend of demand” to continue during the second half of the year.
Full-year forecast
Looking to the rest of 2024, Bridgestone officials believe the business environment “well remain severe, especially during the first half,” attributed to factors like economic trends, especially in Europe; high energy and labor costs; “higher ocean freight due to the situation in the Red Sea;” and costs related to sustainability.
“Continuous monitoring of geopolitical risks (will be) required.”
OE tire demand is expected to be at the same level as in 2023.
“Although there are differences by region, it is expected that the recovery trend” will continue in the replacement tire channel and will experience “gradual recovery.”
Demand for high-diameter passenger tires is expected to increase, “mainly in the U.S. and Europe.”
