Japan’s Toyo Tire has announced that it will sell 86% of its equity interest in Toyo Tire Zhangjiagang (TTZ), its tyre manufacturing subsidiary in China, to Chinese investment firm Liaoning Hengdasheng Investment Co Ltd. Against the back of the China exit, Toyo Tire will shift production for other Asian markets to facilities in Japan and Malaysia.
Established in 2010 to manufacture and sell tyres for passenger vehicles and light trucks in the Chinese market, TTZ has primarily produced tyres for China and other Asian countries.
However, in the Chinese passenger vehicle tyre market, it has struggled to fully leverage its competitive advantage as a local manufacturer/supplier, due to slower-than-expected brand and product recognition. Given these challenges, the company has decided to reassess the strategic role of its China business within its global strategy and has concluded that transferring a controlling interest in TTZ to LHI, its marketing alliance partner since 2023, will ensure that TTZ has access to the necessary operational support.
Meanwhile, the tyres produced and sold by TTZ for Asian countries will be supplied from bases in Japan and Malaysia.
Toyo Tire adds it will continue to pursue flexible and agile business operations in North America where sales grew 4.3% last year, representing over 65% of total revenue.
Toyo Tire’s operating profit jumped 22% to US$623 million in 2024, while revenue rose 2.3%. The results were driven by successful sales promotion of priority products and the weaker yen.