Top 5 Tire Makers on Journeys of Growth, Sustainability

Michelin, again, is the world's largesttire maker. Bridgestone follows at No. 2，while Goodyear andContinental A.G. took the third and fourth positions, respectively.

And that comes as no surprise becauseshuffling among the Top 5 tire makers is rare. But then again, this isn't justany year, Pirelli & C.S.p.A. leap-frogged Sumitomo Rubber Industries toreclaim the No.5 spot in this year's ranking, returning to the position for thefirst time since 2015, when Sumitomo claimed the position .

In the meantime, here's what you need toknow about the world's five largest tire makers.

****Michelin

Michelin has held tight to the title of**** tire maker since 2020 when its global tire sales eclipsed Bridgestone's,ending the Japanese tire maker's 11-year reign at the top of the chart. Thistime around, Michelin posted 2023 tire sales of around $27.5 billion to claimthat top spot. It leads No.2 Bridgestone by about $2.1 billion.

Ultimately, it was an ambitious growthstrategy that drove Michelin to the top of the charts in2020 and it's the sameambition that has kept it there. Because more than five years later, Michelinis still growing.

And it's doing so around a vision itdefines as "with, around and beyond tires.”

Much of its more recent growth has been inthe around and beyond tire spaces, and this plays out on our ranking as, yearover year, the estimated percentage of revenue from tire sales has droppedgradually, going from 93.5 percent in 2021 to 90 percent this year. It isexpected that the percentage will continue to drop as Michelin furtheremphasizes its growth in hose, belting, high-performance materials and othersegments.

Michelin attributes this kind of change toits "win where it matters" strategy-a dedicated focus on high-value,in-demand products.

Driven by the "win where itmatters" approach, Michelin also is right sizing its tire operations byworking to build a balanced portfolio of products while managing itsmanufacturing footprint to best meet global demand and trends.

And woven into Michelin's growth vision isa pledge for greater sustainability. It's a pledge that the French tire makerdefines by considering people, profit and planet in every decision it makes,saying all must benefit. This pledge is playing out in a number of ways acrossMichelin's portfolio of more sustainable products through more sustainablematerials and performance and in its operations.

No.2 Bridgestone

Bridgestone looks a little bit differentthan it did just one year ago. Because the tire maker has restructured itsmanagement into two segments, Bridgestone West-which includes the Americas,Europe, the Middle East and Africa—and Bridgestone East, encompassing China,India and the AsiaPacific region. The aim of the newly aligned Bridgestone isto leverage best practices and streamline the organization.

The company posted global sales of around$25.4 billion to secure the No. 2. spot. What's interesting about Bridgestoneis that, unlike Michelin, more and more of its total sales are coming fromtires. Markedly so, it's estimated that Bridgestone saw about 74 percent of itssales from tires in 2021. Today, about 83 percent of sales come from tires.

In North America, Bridgestone is adjustingto the market, growing in areas where demand is growing and/or consistent, andright-sizing in areas where demand is down. The latter is the case foragriculture tires and that has led the company to announce the closure of itsDes Moines, Iowa-based ag tire plant.

ButBridgestone is growing, too, and investing as it does. Perhaps the mostprominent example of this effort is the $550 million investment in its WarrenCounty, Tenn., truck/bus tire facility. The proiect, expected to be completedin 2026, will increase output and help ensure that the products coming out ofthe plant are more sustainable and new mobility-ready.

Andyou can bet that Bridgestone also is fully committed to greater sustainability.Its investments in and cultivation of guayule is proof of this. But theJapanese tire maker's commitment doesn't end there. Bridgestone is willing tostretch its understanding of sustainability, conducting trials on big ideas with great potential, And no place is this more apparentthan in auto racing.

As the NTT IndyCar Series' sole tiresupplier, Bridgestone tests big ideas against some of racing's most gruelingconditions. This year was no exception. Built into the more than 5,000 FirestoneFirehawk IndyCar racing tires used in the May 26 running of the Indianapolis500 were two monomers-bio-styrene and butadiene-sourced from waste residue ofpalm oil processing.

No.3 Goodyear

It's another big year for Goodyear, whichheld strong to the No. 3 spot after posting 2023 sales of $17.2 billion. That’sbecause the Akron-based tire maker has embarked on its Goodyear Forward plan,one that aims to streamline and optimize the company for growth down the line.And its doing that with its brand new CEO in place.

Early this year, Goodyear welcomed new CEOMark Stewart, who came to the company from Stellantis N.V.in North America,where he served as the chief operating officer. He succeeded longtime CEO RichKramer.

Stewart stepped into the role knowing therewere big changes on the horizon for the tire maker.

The Goodyear Forward plan, first introducedin 2023, was spurred by a letter from Elliott Investment Management L.P., oneof the tire maker’s largest shareholders, in which it shared its disappointmentwith Goodyear’s poor stock performance and demanded changes.

The Goodyear Forward, by the end of 2025,should bring：

Cost reductions netting $1 billion annually；

Top line actions that result in $300million annually;

Doubling of segment operating income marginto 10 percent; and Goodyear closer to an investment-grade rating through astrengthened financial profile, enhanced earnings, cash flow generation and$1.5 billion in debt reduction.

To achieve this, Goodyear looks to divestchemicals/synthetic rubber, off-the-road tire and Dunlop brand businesses.

Already, the Akron tire maker has found abuyer for its OTR business in Yokohama, which intends to purchase the businessfor around $905 million.

No.4Continental

When it comes to North America, Continentalis deepening its roots. Earlier this year, Continental Tire the Americas L.L.C.christened a new headquarters, strengthening its presence in the U.S., and inSouth Carolina particularly.

South Carolina also is home to thecompany’s brand new retread facility, dubbed Continental Retread SolutionsDevelopment Center. Continental believes it can capture a larger share of theretreading market-one dominated by Bridgestone/Bandag and the new facility is akey component to that aim.

Globally, Continental is re-envisioning itsstructure, considering a spinoff of its automotive business. A decision on therestructuring is expected in the fall.

If approved, the automotive business wouldbecome a separate entity, but the tire and ContiTech businesses would remainunder the Continental umbrella.

Such a move would help to put tires more atthe forefront of what Continental does. As of now, the tire segment is only asmall fraction of the automotive giant’s operations. It’s estimated that just28 percent of Continental’s total sales come from tires.

This is to be carbon-neutral across theentire group by 2040, In order to achieve this goal, it aims to implement threeconcrete steps :

Switch all energy purchased to greenenergy. Here the Group has already achieved one milestone: since 2020,Continental has been purchasing green electricity for its own operationsworldwide and has thereby reduced its own emissions by around 70%.

Implement energy efficiency measures andmake use of new technologies to reduce our emissions in production processes toa minimum.

Neutralists the rest of the emissions ithas.

No.5 Pirelli

This year, Pirelli captured that No. 5spot, taking it from Sumitomo after posting $7.18 billion in global sales lastyear. Sumitomo’s sales came in at $7.16 billion.

In North America, Pirelli is making itsmark and it’s doing so, in part, by winning OE fitments. But growth in NorthAmerica-one of the most important regions globally-also means meeting consumers(and the market) where they are. To do this, Pirelli is focused on designingthe kinds of tires that consumers say they want. Those with low rollingresistance, excellent treadwear and optimal performance in all weatherconditions.

Pirelli reviewed all of the different waysa tyre could contribute to sustainability and the result is the P Zero E tyre.This is different from anything else on the market, in terms of materials,emissions in the production chain, and rolling resistance, which influencesfuel consumption. It has a European A-class rating for rolling resistance, thehighest level of energy efficiency, so it reduces tailpipe emissions, and thewear rate has been reduced by 42 per cent compared with earlier products,reducing particulate emissions from the tyre itself, The P Zero E is alreadymade from more than 55 per cent non-fossil-fuel materials. By 2030 we will havea new tyre product that is more than 80 percent fossil free.