TOYO TIRE Value creation

External Environment and Risks & Opportunities

Technical Strategy

Product Brand Strategy

Improving product functionality through motorsports activities

We position motorsports activities as an opportunity to refine our technical capabilities, enabling us to apply insights gained under extreme real-world driving conditions to product development.
In the off-road category, in order to hone the performance of our SUV and pickup truck tires, we provide our OPEN COUNTRY series tires (including racing models) to teams competing in some of the toughest races including the SCORE Baja 1000, where most of the course runs across deserts and only around a half of entrants finish, and the Dakar Rally, reputedly the most grueling off-road endurance rally in the world. The learnings from these competitive events are used to develop rubber composition and internal structure that ensure high durability on rough terrains, and design features and bead structures that minimize tire damage caused by impacts during high-speed driving.
In the on-road category, in order to hone the high dynamic performance required of ultra-high performance (UHP) tires, we compete in races at the Nürburgring in Germany, renowned as one of the world's most demanding race tracks, with vehicles fitted with special PROXES racing tires.
With 300 meters of elevation change and more than 170 corners, the North Course of Nürburgring is renowned for its difficulty, and the lap times and performance quality achieved on this course are important indicators for assessing the ultimate performance of UHP tires. We use the data and insights gained through races under these arduous conditions to improve the handling, stability and durability of our products during high-intensity driving at high speed. These learnings from motorsports activities are also used in product development. An example of that is new materials developed and tuned through racing activities that have now been incorporated into commercial tires in stages.
Going forward, with the goal of competing in the top class of each race and achieving overall victories, we will focus on product development centered on wide light truck (WLTR) tires in the off-road category, working to deliver tires that combine high functionality with unique styling.
In the on-road category, we will further verify and refine our accumulated expertise at an even higher level, thereby enhancing the dynamic performance of our UHP tires and leveraging these achievements to increase our brand value and strengthen our market presence.

Sales Strategy

Sales strategies for priority products

Under the Medium-Term '21 Plan, to further strengthen our competitive edge, we have promoted a priority product sales strategy that stands apart from the pursuit of a full product line or scale. Under this policy of aiming to maximize profit through thorough, consolidated profitability management across each market globally, product development, production, and sales functions have worked as one to deliver high value-added products tailored to the characteristics of each market.
Priority products are an original tire product category that epitomizes Toyo Tire's strengths, comprising new, core, and differentiated products. Our sales function has worked to enhance the quality of its product mix in each region in line with local market characteristics, using the percentage of sales from priority products as a key indicator when developing sales activities. The Medium-Term '26 Plan continues with this approach, pursuing profitability-oriented growth.

Regional sales strategies

North America

In North America, we seek to maintain and enhance Toyo Tire’s presence and expand sales with a WLTR-focused branding strategy. At the same time, we use TBR as a growth driver to strengthen supply capacity and profitability and sharpen our competitive advantage.

・Consolidating our WLTR presence and promoting further growth
The Medium-Term ’21 Plan focused on strategic product development centered around OPEN COUNTRY (TOYO TIRES) /GRAPPLER (NITTO) tires and on the offering of tailored promotions to strengthen dealer relationships. This strategy propelled Toyo Tire rise to No.5 on the U.S. sales table, and helped steadily increase WLTR presence in the North American market.
Demand for wide light truck tires (WLTR) is expected to continue expanding steadily, supported by the upward trend in vehicle sales in the North American market and the rising rate of WLTR installation on new vehicles from major automakers. Traditionally, users have focused on WLTR designability and durability but in recent years, more and more users are also interested in basic performance elements such as better wet performance and rolling resistance. While our WLTR products place particular emphasis on sophisticated features, we are also advancing product development that responds to the market's performance requirements, and we expect demand for our products to remain firm as a result. In North America, market data on price, size, and other factors is readily accessible, and we believe that swiftly and accurately capturing customer feedback will be key to strengthening our competitiveness.
The underlying policy in the Medium-Term ’26 Plan is to maintain and enhance WLTR presence, in which the Group has the competitive edge, and promote further growth. We intend to strengthen our brand strategy centered around OPEN COUNTRY/GRAPPLER tires to better compete with leading brands. We will also aim to expand WLTR sales through marketing designed to foster a passionate WLTR fan base. Ultimately, our aim is to increase WLTR sales volume over the medium-term plan period by a minimum of 10% compared to 2025. In terms of frontline sales, we remain committed to our fundamental approach of staying attuned to market needs and developing a swift response, rapidly bringing the necessary sizes to the market in line with the timing at which demand materializes.

・Market offensive that leverages TBR strengths
Under the Medium-Term’21 Plan, we focused on expanding the sales of truck and bus radial tires (TBR) and delivered firm sales performance over the plan period.
While our TBR products have earned strong recognition and support in the market, we have not always been able to adequately satisfy these expectations due to certain constraints on our supply capacity.
The current Medium-Term ’26 Plan positions the expansion of our TBR market share as a key growth driver and aims to expand its sales volume by 50% compared to the 2025 level. In terms of supply, in addition to our Kuwana Plant in Japan, we plan to build a new TBR plant to strengthen our supply capacity.

Europe

Having consolidated production, sales, and R&D functions in Serbia, we will now turn our attention to strengthening our brand power by integrating these functions, improving supply capacity and lead times by pursuing local production for local consumption, and expanding sales and accelerating revenue growth in the European market by focusing on UHP.

・Consolidating sales functions in Serbia
In the European market, during the Medium-Term '21 Plan period, we consolidated our sales companies previously located across multiple regions into a newly established sales company in Serbia, where our production plant is located, achieving a significant streamlining of our cost structure. Going forward, by advancing the consolidation of our production, sales, and R&D functions in Serbia, we will swiftly build the foundation needed to strengthen our competitiveness in the European market.
Under the Medium-Term '26 Plan, we will fully capitalize on this structure to take a more aggressive approach to growth in the European market. While we have earned a certain degree of recognition through third-party evaluations such as magazine tire tests and motorsports activities, we recognize that we have not yet fully conveyed the technical value behind our products. To address this, our production, sales, and R&D functions will work as one on the marketing front to clearly showcase a strengthened brand power backed by technological excellence.
These strong results in magazine ratings and high-end motorsports, together with our stable supply system and low complaint rate, give our frontline personnel a strong sense of confidence, motivating them to pursue further quality and continuous improvement. We believe this will help establish a virtuous cycle in which heightened awareness enhances quality and performance, encourage stronger external evaluations, and generate even stronger results. Leveraging the strengths generated by coordinating production, sales, and R&D initiatives from a single location will enable us to rapidly share these strong results, and drive more organic and sophisticated ideas and activities.

・Establishing local production for local consumption frameworks
Under the Medium-Term '21 Plan, product supply to the European market was based primarily on shipments from our plant in Japan, which required a certain lead time from order receipt to delivery.
Establishing a local production for local consumption framework will enable us to substantially shorten supply lead times to the European market, while also allowing for a broader product lineup. Going forward, this accelerated supply will drive a major shift in both the quality and tactics of our sales.

Japan

・Focusing on core brands and optimizing sales structures
In the Japanese market, we focus on building relationships with sales partners who share our approach and can work together with us to deliver products to customers. Under the Medium-Term '21 Plan, we worked to build win-win relationships that would lead to sustainable growth over the long term. Through measures such as consolidating sales outlets and enhancing call center functions, we fundamentally overhauled our sales structure, driving this restructuring consistently in line with our market strategy. As fixed cost structures have been reviewed and sales efficiency has improved, a robust business foundation is steadily taking shape in our operations in Japan.
Against that background, under the Medium-Term '26 Plan, we will continue to strengthen our competitiveness by focusing on core brands and developing unique products. On the sales front, as in the European market, we will place emphasis on promoting high value-added products. We will further deepen the efficiency gains achieved through the sales structure reforms carried out during the Medium-Term '21 Plan, leveraging AI and digital transformation (DX) to build a more sophisticated sales framework with greater quality, while further accelerating our shift toward a compact and resilient profit structure. We recognize that establishing OPEN COUNTRY and PROXES as our two flagship brands and using them to elevate the presence of the TOYO TIRES brand is the key to achieving sustainable growth in Japan.

Other markets

・Acquiring brand-conscious customers
In the Southeast Asian market, we will steadily capture demand by appealing to the tastes and preferences of brand-conscious, discerning high-end customers through our product strength and brand power, while working to strengthen our sales base. In recent years, the spread of EVs has helped boost demand for large-diameter tires, one of our focal areas, and this has proved a welcome tailwind for us. We consider product strength and stable supply to be key drivers of our competitive edge, and we will build a flexible supply system that combines supply from both Malaysia and Japan.
In Malaysia, we have leveraged our strength in local production for local consumption to expand both replacement and OEM sales channels and secure the No.1 market share. Pickup trucks remain consistently popular in the market, and our tire lineup complements those vehicles well, enabling us to readily demonstrate our product advantages there.
Thailand is a highly competitive market, but given the high proportion of pickup trucks, it is a market where we can leverage our strengths, and we will continue to aim for expanding our presence there.

Production and Supply Strategy

Global production and supply system

In the early stages of the Medium-Term '21 Plan, the global pandemic and the resulting lockdowns affected production activities across every industry. Our Group was not immune to this impact and was forced to temporarily shut down plants around the world. Even so, in order to meet expectations of us as an essential business, we put in place production arrangements suited to conditions in each region and continued to fulfill our responsibility to supply.
Amid growing workforce turnover, we also faced challenges in employee retention in Europe and the United States. We focused on improving productivity to minimize the impact on our business, and also succeeded in getting supply from our newly established Serbia Plant on track. Furthermore, we seized the opportunity to carry out a disciplined replacement of assets to strengthen our competitiveness, including the closure of the Silverstone Plant in Malaysia and an automotive parts plant in the United States.
In the Medium-Term ’26 Plan, while maintaining the basic principle of local production for local consumption, we are evolving our global production system further so that production bases in different regions can complement one another, enhancing supply capability based on market needs. We are also strengthening the inter-functional collaboration between production, sales and R&D within each region to ensure that market trends and customer needs captured are accurately incorporated into products. By managing all processes from product development to production and supply in such an integrated manner, we can improve our responsiveness and competitiveness.
As each market has a distinct demand structure and product characteristics, our plants in Japan, North America, Europe and Asia are each assigned specific roles and functions to supply their local market as a priority with maximum supply flexibility and efficiency. Furthermore, we will strive to optimize supply allocation in accordance with demand-supply dynamics, which will improve the operational stability and profitability of the business as a whole.
Building on our unique Advanced Tire Operation Module (A.T.O.M.) manufacturing method, our U.S. plant is actively introducing and utilizing the technical expertise and know-how accumulated at our other bases to elevate quality and productivity to the next stage and further strengthen our competitiveness.

Human Capital Management

Medium-Term ’26 Plan: Evolving and deepening

Under the Medium-Term ’26 Plan, we will further evolve and strengthen our human capital strategy, and fully embrace human capital management across the Toyo Tire Group. Our goal is to nurture talents that can pursue and embody the values that are important to us: speed, uniqueness, flexibility, expertise, readiness and resilience. At the same time, we will make our organization more robust so that these talents can function cohesively as an organization. In order to maintain a proudly high-profit business that is positive for employees, we will make full use of a talent management system to develop talents that can play a role in maintaining and expanding the Group’s management and business operations, improve engagement to motivate these talents, and practice data-driven health and productivity management to ensure they can always perform to their full potential. We will implement these actions speedily and steadily in order to build a solid foundation of human resources that can help to achieve the targets of an operating income of 120 billion yen or higher and an operating income margin of 18% or higher by the final year of the Medium-Term ’26 Plan (fiscal 2030).
For human capital management, we have defined key goal indicators (KGIs) for each goal. To maintain a high-profit business with strong pride, we track the operating income and margin targets per capita (generated by human capital). To create a positive environment for our employees, we track the strength of the employees’ sense of well-being (gained by human capital). In order to measure the sense of well-being, we have devised our own metric, the Toyo Tire Better Life Index, to assess the level on an ongoing basis.