Help create a society of sustainable mobility / Support the enjoyment of mobility for all

• Challenges
• Our policy
• Responsible executive (as of April 2024)
• Organizational responsibilities (as of April 2024)
• Grievance mechanism
• Main resources for promoting activities (2023)
• Environmental contribution
• Safety
• Commercializing airless tires
• Ultimate enjoyment of driving and sophisticated features

Challenges

• Environmental contribution (CO₂ emissions reduction): Reducing tire rolling resistance, improving EV compatibility, saving resources
• Safety: Maintenance-free products, diagnosis of tire wear
• Commercializing airless tires
• Ultimate enjoyment of driving and sophisticated features

Relevant stakeholders

• Direct: Customers(consumers), suppliers, employees, research institutions
• Indirect: Shareholders and investors, creditors, local communities, NGOs, industry groups

Our policy

We know that the sustainable future for tire and automotive parts manufacturers will only be ensured once a society of sustainable mobility has been created. That’s why we are working to help establish a society of sustainable mobility that boasts less environmental impact, fewer traffic accidents and efficient transportation.
In addition to providing the necessary elements for promoting sustainability, we believe that using our unique products and services to satisfy the various features that people expect from superior mobility life will create added value designed to support a diverse mobile society, so that is what we intend to do.

Responsible executive (as of April 2024)

Director, Corporate Officer and Vice President of R&D Headquarters

Organizational responsibilities (as of April 2024)

Spearheaded by our R&D Headquarters, we are working together with product planning, production management, sales planning and digital transformation (DX) functions and promoting sustainability-related activities based on various themes that correlate with the aims of our medium-term business plan.
The Technical Committee oversees the overall implementation of those activities and reports progress to the Sustainability Committee.

Grievance mechanism

• Reporting hotline (whistle-blowing system): For executives, employees and suppliers
• Customer Relations Department: For customers (consumers) and local communities
• Online inquiry form: For customers (consumers), shareholders and investors, and NGOs
• n addition to the above routes, our technical service departments, Group sales companies and distributors also receive inquiries and complaints.

Main resources for promoting activities (2023)

• R&D expenses: 12,729 million yen *including 1,610 million yen for basic research expenses
• Expenses related to environmental conservation during R&D activities: 443 million yen
• Capital investment in rationalization, improving quality and enhancing production facilities: 26,342 million yen
• R&D bases: 5 bases (Japan, US, Germany)
• We are strengthening our unique technologies and developing differentiated products by encouraging cooperation between our R&D functions in Japan, the US and Europe. We also conduct joint research with multiple universities and research institutes.

Environmental contribution

Reducing vehicles’ CO₂ emissions is a challenging issue that needs to be addressed throughout the supply chain in order to achieve carbon neutrality by 2050. Although the global shift to EVs is slowing, EVs will remain an effective means of transportation to reduce emissions in the medium- to long-term, and the shift is expected to continue. Despite the backlash, we believe it is important to systematically and effectively pursue initiatives to reduce CO₂ emissions from vehicles.
At Toyo Tire Corporation, our goal is to help reduce CO₂ emissions per tire by 20% by 2030 compared to 2019 levels and our functional organizations collaborate to develop products.
Our R&D function strives to consistently update basic technology over a medium- to long-term span in anticipation of automotive industry trends and the level of performance and functionality required of tires. While engaging in activities to improve the precision of material compounding and tire design, we have established an R&D system that can respond at a high level to the fuel efficiency performance and EV requirements of next-generation vehicles (reduced rolling resistance, larger diameter tires, quietness, etc.). Material development is one of the approaches we use to reduce rolling resistance. We use Nano Balance Technology, our proprietary platform technology for rubber materials, to facilitate more accurate predictions regarding specific material properties and optimize material structure, and we are promoting its use in practical development. Our engineering and production functions are collaborating to support product development by, for example, improving processing methods.
Our product planning function plans model changes (rolling) in cooperation with our R&D and sales functions, based on our medium-term product plan. While keeping a close eye on market trends, we are incorporating upgraded functions and performance, including fuel-efficiency, that are compatible with EVs into the development requirements for our priority (core) products. At the same time, we plan to launch differentiated products for EVs.
Through these activities, we will contribute to the creation of environmental value by implementing business strategies that appropriately respond to the shift to EVs while continuing to improve the fuel-efficiency of our products.

Development of EV tires for pickup trucks & SUVs

In our Sustainability Management Policy, published in 2022, we set out our unique EV strategy as scenarios for achieving medium- to long-term value creation.

EV Strategy
- Develop technology for electric SUVs and pickups trucks
- Develop differentiated products for SUVs and CUVs according to trends in the North American market

Based on these scenarios and our medium-term product plan, we developed the OPEN COUNTRY A/T III EV tire for pickup trucks and SUVs, which we launched in the North American market in February 2024.
Taking advantage of the features of the OPEN COUNTRY A/T III, which has been well received in Japan and the North America, the EV tires offer both a powerful off-road driving experience and on-road maneuverability and comfort, as well as an improved cruising range thanks to their reduced rolling resistance. Wear resistance and durability to handle the instant torque, rapid acceleration, and additional weight, characteristics of EVs, are also maintained. The tires also meet the requirements for the snowflake mark^*1, which is proof of their suitability for use year-round on a wide range of EVs.

• *1 Tires that meet the severe snow-grip requirements stipulated by the United Nations Economic Commission for Europe (UNECE)

Unique aerodynamic simulation technology

The OPEN COUNTRY A/T III EV was designed using Mobility Aerodynamics (aerodynamic simulation), our proprietary technology. The tires feature an “AEROWING” sidewall lug design to reduce wind drag generated while rotating.
Aerodynamic refers to wind drag generated when driving. Reducing wind drag contributes to improving fuel efficiency and, in the case of EVs, increases the cruising range per charge.
Analyzing the airflow around the tires while driving and optimizing the tire profile helps reduce the impact^*2 on a vehicle’s aerodynamic characteristics. Our Mobility Aerodynamics technology enables us to predict the aerodynamics of an entire vehicle, taking into account the ground contact, deformation and rotation of the tires when driven. We use T-MODE (design support technology) to design tires that can improve the aerodynamics of each vehicle model.

• *2 Tires are said to account for approximately 15% of the total aerodynamic drag of an entire vehicle.

Visualization of air flows around vehicles and tires

Building the technology for virtual development

We have been working on building the technology for virtual development by improving the accuracy of estimates of tire characteristics on paper and establishing an efficient workflow for assessing actual vehicles. In addition to using this technology for centralizing data management, improving the accuracy of estimates of basic dynamometer characteristics and constructing tire models, we are working to adapt it to other items for actual vehicle performance estimation. These initiatives enable shorter development periods as well as reduce the number of prototypes and actual vehicle assessments, thereby helping cut CO₂ emissions in the development process.

Developing weight reduction technology

We are developing weight reduction technologies and rolling out products for each category of tires for passenger cars, light trucks, and trucks and buses. To achieve our medium-term target of reducing tire weight, we have been working on reducing the thickness of components, considering new structures, and improving the work process capacities of our plants. In particular, we have already started developing products with weight reduction technology using high-precision equipment at our Serbia Plant last year, and plan to expand this initiative in the future.

Safety

Tire wear forecasting system to boost customer safety

The Technology Development Division and the DX Promotion Division are collaborating on an application that can diagnose tire wear based on information about the usage status of truck and bus tires. The teams are conducting trials by asking customers to try out the app so they can improve the accuracy of their predictions and expand the range of functions to facilitate the remote confirmation of air pressure and wear prediction results. This technology enables us to help improve the safety of drivers and passengers by encouraging customers to appropriately rotate their tires based on the wear predictions. We also expect it will have environmental benefits by extending tire life and increasing the possibility of reuse as retread tires.^*5

• *5 A worn tire that is reused by replacing the rubber in the part of the tire that comes into contact with the road surface.

Achieving long product life and superior braking performance on wet surfaces

To develop technologies that protect the safety of customers by improving product life and superior braking performance on wet surfaces, we have been installing new facilities and modifying evaluation equipment with the aim of raising the level of tire measurement, analysis and evaluation technologies. We are working on visualizing the behavior of tires with tire wear and when braking on wet surfaces, and developing new design elements. The design elements we obtain from this process will be rapidly applied to our products to help ensure the safety of our customers.

Commercializing airless tires

A likely effect of changes such as self-service gas stations, home charging of EVs and wider adoption of car sharing is that there will be fewer opportunities for drivers to get tires serviced by experts. Also, cars need to be lighter in order to save energy and resources, and tire manufacturers face the challenge of providing safety in the next generation of mobility without the need to carry a spare tire. We are tackling this challenge by developing airless tires designed to provide maintenance-free, spare-free solutions. Our “noair” airless concept tire achieves the level of durability and maneuverability close to that of pneumatic tires and can be fitted on passenger vehicles for driving. As part of the path to commercialization, we are currently trialing the noair tires on last-mile delivery vehicles. We are paying close attention to the legislative and regulatory direction regarding the use of airless tires on public roads while continuing our development work, taking into consideration potential use cases such as tires for future mobility vehicles and as a recycling solution.

Ultimate enjoyment of driving and sophisticated features

Toyo Tire Corporation’s unique strategy applies the Company’s core strengths to developing technologies and commercializing products that offer exquisite design features and the ultimate enjoyment of driving, while demonstrating high commitment to environmental and safety considerations.
We have established a strong business model in North America in particular by communicating minute detail to local dealers in order to engage more deeply with discerning customers seeking the ultimate driving enjoyment, and by creating a consistent operation that covers all stages from market research through production and sales to facilitate speedy product supply. Our North America sales department leverages the brand recognition and dealer relationships, which are assets that have been cultivated in this way, to gain a quick and firm grasp of the needs and wants of local customers and the problems they may be experiencing for internal feedback. The sales department sometimes cooperates with the technical department and goes out into the field to gather insights on customer preferences so that we can develop differentiated products and fuel a virtuous product-development cycle. The strongest part of this process lies in the effective communication between the head office in Japan and the overseas sales companies that transcends the physical distance between them. Information on local customer feedback and trends is exchanged constantly through formal settings and on other various occasions, and reflected in product planning. The whole process is underpinned by our fundamental shared values and commitment to supporting a bountiful range of mobility-related lifestyles through our products while also maintaining basic tire performance.
Toyo Tire Corporation also participates in what are considered some of the world’s toughest international off-road races, such as the Dakar Rally and BAJA 1000, and we channel the knowledge gained through these experiences into product development in order to sharpen our technology and enhance product performance. We glean particularly useful information from the Dakar Rally’s challenging desert and rocky terrain which we use to improve durability, a factor leading to product reliability.
Thanks to these continued efforts, our Open Country tire brand has been able to establish a firm position in North America’s 4WD, SUV and pickup truck markets.

Toyo Tire Corporation is pursuing its own marketing activities centered around the Open Country brand and building new fanbases in other markets outside of North America as well. As part of our strategy, we focused on the possibility that excellently designed tires can transcend the narrowest concepts of mobility and earn a place in people’s daily lives as a lifestyle facilitator that can foster a particular worldview and culture. In some part of Asia, our sales department works together with local distributors on promotions that effectively employ social media to highlight the design features of our tires to car users who like to camp outdoors. In Japan, we advertise through means other than automobile magazines, such as outdoor, fishing and fashion related media, to reach car owners who are not particularly interested in tires and encourage them to choose their tires to suit their individual lifestyles. Our unique approach to the pursuit of ultimate driving enjoyment is to foster a set of values that inspires customers to change their tires not because they are worn out as consumables but because they want to replace their current tires for a more appealing luxury product. These marketing activities have helped fuel a growing awareness of the Open Country brand in Japan, especially among users who seek highly customized products. Going forward, we intend to use test-drive meets for tire users to promote awareness of the Open Country brand and its essential pursuit of “functional beauty” that embodies reliable performance.