Oct. 17, 2011
Toyo Enters into a Distributorship Agreement with Singapore’s YHI Group To Proactively Develop the Nitto Brand Tires in the China Market
OSAKA, JAPAN - October 17, 2011 - TOYO TIRE & RUBBER CO., LTD. (President and CEO: Kenji Nakakura) announced that Toyo and YHI Corporation (Shanghai), a subsidiary of the YHI International Limited (headquarter in Singapore; Richard Tay Tian Hoe, Group Managing Director), have agreed upon a sales concept for the Nitto Brand passenger car tires in the China market, and thereby entered into a basic contract today.
The Nitto Brand, which Toyo will be developing, has already gained strong popularity particularly in North America with the high added-value large-diameter tires. In the future, over the 5-year period leading up to 2015 which will be the target year for the Mid-Term Business Plan 2011, the goal is to increase the sales volume of the Nitto Brand to approximately 2.5 times what is current (6.75 million tires). Together with expanding the sales in North America, which is its current base, there are plans to globally spread the regions in which the Nitto Brand is developed, into Asia, South America, Oceania, etc.
The entry into the China market, where motorization is progressing dramatically, has been especially identified as the pillar to the growth strategy, and various sales networks have been examined and evaluated. YHI, which will become Toyo’s business partners at this time in developing sales in the China market, is a Group publicly traded on the Singapore Stock Exchange, and is one of the leading firms in Asia engaged in tire sales, and manufacture/sales of wheels. YHI has built a sales network throughout various countries in Asia, including China, and has the sales experience and track record of more than 38 years. It is thought that the sales know-how and expertise over high value-added products which YHI Corporation (Shanghai), a subsidiary of this Group, has in China will definitively contribute to the China sales strategy for the Nitto Brand, which is backed by Toyo Tire & Rubber’s advanced technology and product quality.
In the 2011 Mid-Term Plan, Toyo has set the sales target for the tire business in 2015 at 310 Billion Yen (143.1% compared to 2010) and the operating profit of 24 Billion (269.6% compared to 2010), and thus is proactively working to build a global manufacture-and-supply structure. Toyo has achieved “the Acquisition of a passenger car tire manufacturer in Malaysia” in December 2010, “the Subsidarization of a truck and bus tire manufacturer in China” in June 2011, and there are further plans underway to start new operations of localized passenger car tire plants, in China in December 2011, and in Malaysia in April 2013.
Together with the laying of these manufacturing foundations, Toyo will expand the sales in and further develop the original “Toyo Tires” and “Nitto” Brands strategically in growth markets. The hope is to increase profitability by planning a product composition which best befits each market, and thus build a global business structure which makes best use of the distinctive characteristics of these brands.
Toyo has already begun to undertake the global development of the Nitto Brand. Through these expansions, it is planned to increase the Nitto Brand’s percentage within Toyo’s brands from 9% in 2010 to 15% by 2015.
Toyo Tire Corporation Corporate Communications Planning Dept.
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