Bridgestone Corp. recorded $14.8 billion in revenue for the first half of 2024, which is a 3.6% increase from last year.
The company said revenue benefitted from currency exchange rates, as well as steady sales of passenger high-rim diameter tires (18 inches and larger) for replacement and off-the-road tires for mining vehicles.
However, the company reported an adjusted operating profit of $1.56 million for this year compared to $1.62 million last year.
Bridgestone said the decline in profits was due to the impact of Latin America business declining, decreased profit in North America and reduced sales volume of truck and bus tires and passenger tires on a global scale.
Here’s a look at the company’s regional performance.
North America
The company reported an overall revenue for North America at $6.3 billion.
In the North American region, Bridgestone reported $3.024 billion in revenue from its “core business” — the premium tire business and $319 million in revenue from its retread business. The company’s retail stores contributed $2.4 billion in sales during the first half.
Operating profit in premium tires was hurt by an “increase in low-end imports caused from tariff change,” Bridgestone said, and the retail profit fell from the prior year due to “challenging consumer trends in the U.S. and the impact of decrease in number of customers,” though the tiremaker noted it had improved price per customer in the period.
Bridgestone expects recovery in the second half of the year and said it had overcome “the worst phase” during the first half of the year.
For the company’s retread business, profitability remained high at over 20% of the operating profit margin despite a decrease in profit compared to last year. This was impacted by increased low-end imports, but the company expects this segment to recover in the second half of the year.
Latin America
Bridgestone reported $1.131 billion in revenue in Latin America.
The overall trend of sales and profitability is expected to continue to improve during the second half of the year, but Bridgestone says the region will “remain a huge impact of business deterioration against the fiscal guidance.” The company says it had overcome the worst conditions in Argentina during the first quarter, and Brazil followed suit during the second quarter.
The company says it aims to become profitable in Argentina throughout the year, and that the worsening impact in Brazil bottomed out in the second quarter.
Europe
Bridgestone had increased revenue and decreased profit in Europe for the first half of 2024 compared to the prior year.
Initiatives for 2024 in Europe include promoting fixed cost reduction through optimization of production and sales structure.
Asia and Pacific, India and China
Revenues were down, but the Asia and Pacific, India and China segments saw an increased profit versus last year due to offsetting the revenue decline by improving sales mix in passenger replacement tires and “thorough cost management.”
OTR tires
Off-the-road tires increased revenue and profitability from last year reflecting the “contribution of expanding solutions on top of solid sales,” according to Bridgestone officials.
The company expects solid sales in 2024 at the same level as last year.
Business portfolio & forecasts
The company reported for the first half of 2024 that 63% of its revenue comes from the premium tire business; 30% of revenue comes from its solutions business that includes tires sold in its retail stores and 7% of revenue comes from its diversified products business.
Bridgestone is also focusing on global cost reduction to optimize the balance between sales and production and ensure reduced fixed cost and lean inventory management.
In order to achieve this, the company says it will optimize production capacity by plant mainly in the tire business in North America and Europe and optimize overall investment for production in second half of 2024 and onward.
To maintain a lean inventory, the company says it will reduce inventory and warehouse costs through “lean inventory control” and improve cash conversion cycle.
“If sales volume in North America and Europe recovers earlier than assumed, supply will be covered by exports from Japan and Asia to ensure lean inventory,” Bridgestone said.
By the end of this year, the company's goal is to write-off nonproductive inventory by area and execute optimization of supply chain to reduce both inventory units to establish a lean structure for 2025.
Premium focus
The company says it will continue to maintain a focus on the passenger high rim diameter tires and wants to accelerate enhancement of expansion to tires 20-inches and above.
Tires 20-inches and larger made up 27% of OE sales in North America and Europe combined during the first half of 2024, and the goal will be to bump that up to 30% in the second half of this year. OE Tires in 18-inch and 19-sizes accounted for 39% of sales in those two regions, and the plan is to increase that to 40% during the second half of the year.
The overall numbers of those large tires aren’t as overwhelming in the replacement market, but Bridgestone is still looking to make gains in the 20-inch and larger tire sizes in North America and Europe, with a plan to grow from 13% of sales to 15% of sales in the second half of 2024.
