Japanese tyre maker launches cost-cutting initiative as US tariffs bite

Sumitomo Rubber Industries maintained its full-year profit forecast despite a sharp decline in first-half earnings, as the Japanese tyre maker launched a comprehensive cost-reduction programme to counter rising raw material costs and US trade tariffs.

The company reported business profit of 28.3 billion yen for the six months ended June 30, down 33 percent from the previous year, whilst sales revenue fell  three percent to 572.2 billion yen. Profit attributable to shareholders plunged 63 percent to 14.4 billion yen.

Despite the weak first-half performance, Sumitomo Rubber held its full-year business profit target at 95 billion yen, representing an eight percent increase from the previous year.

"At the initial planning stage for H1, we anticipated significant negative impacts from rising raw material costs, particularly natural rubber, as well as foreign exchange fluctuations," President and CEO Satoru Yamamoto told analysts. "Overall, performance progressed largely in line with our plan."

The company faces headwinds from US tariffs imposed under the Trump administration, with an estimated impact of 14.5 billion yen for the current fiscal year, down from an initial estimate of 18 billion yen following tariff postponements and rate reductions in Japan and Indonesia.

Project ARK targets 30 billion yen savings

To bolster profitability, Sumitomo Rubber launched "Project ARK," a company-wide cost-reduction initiative targeting 30 billion yen in cumulative savings by the end of 2027 from its 1.1 trillion yen annual cost base.

"By advancing Project ARK, which carries forward the direction of the Be The Change initiative, we intend to help build a robust management foundation that is resilient to such external changes," Yamamoto said.

The programme focuses on tyre production costs, shared administrative and R&D expenses, and non-tyre business segments. General Manager Shinji Araki, who leads the project, said the company expects to achieve "several billion yen" in savings this year, ramping up to approximately 10 billion yen in fiscal 2026.

Dunlop brand expansion progresses

The company began selling tyres under the acquired Dunlop brand in North America and Australia in May, following the completion of its trademark acquisition from Goodyear Tire & Rubber. Sumitomo Rubber plans to launch proprietary Dunlop products for the North American market in January 2026, with European sales to follow.

"By introducing differentiated products manufactured by the Company under the DUNLOP brand in Europe, North America, and Oceania, we aim to increase the proportion of premium products," Yamamoto said.

The company's proprietary Active Tread technology, featured in its Synchro Weather tyre launched in Japan last October, won multiple industry awards and is being developed for next-generation all-season tyres targeting European and North American markets for a 2027 launch.

Tariff impact manageable

Sumitomo Rubber began implementing price increases in the US  market in May to offset tariff impacts, with Managing Executive Officer Hidekazu Nishiguchi saying progress has been "generally in line with our plan."

The company estimates it can recover approximately 10 billion yen of the 13.5 billion yen tariff impact on its tyre business through price increases, with the remainder offset through cost reductions and expense controls.

"Since we primarily ship from Thailand, the tariff is applied to the export price from Thailand. As a result, we estimate the effective tariff burden to be around 12% to 13%," Nishiguchi explained.

For the full year, Sumitomo Rubber forecasts sales revenue of 1.215 trillion yen, unchanged year-on-year, whilst maintaining its interim dividend at 35 yen per share with a projected year-end dividend of 35 yen for a total annual payout of 70 yen.

The company's tyre sales volume is expected to decline four percent to 99.03 million units for the full year, though it continues to focus on premiumising its product mix, with premium tyres forecast to account for 46 percent of passenger car tyre sales, up from 44 percent previously.

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Hankook Tire, the exclusive tyre supplier to the FIA World Rally Championship (WRC), has reinforced its technical support for the sixth round of the 2026 season, the Vodafone Rally de Portugal, being held from 7 to 10 May in Matosinhos in the country’s northern region. The company is supplying its extreme all-terrain Dynapro R213 tyre, engineered for gravel stability, which is available in both Hard and Soft compound options. This tyre features a high-strength casing and an optimised tread pattern designed to disperse impact from sharp rocks and maintain grip even under high-speed, high-stress driving conditions.

As one of the most historic fixtures on the WRC calendar, Rally de Portugal has been a cornerstone event since the championship’s inaugural season in 1973. The 2026 edition is based at the Exponor service park near Porto and includes 23 special stages with a total competitive distance of roughly 345 kilometres. The route blends fast-paced sections with technically demanding areas, challenging crews with a soft, sandy gravel surface that deteriorates rapidly as cars make repeated passes. While the first run demands stable performance on limited grip, the second pass exposes deeper ruts and sharper rocks, making tyre durability and handling decisive.

A particular focus is the Amarante stage, the longest of the rally at approximately 26 kilometres, which features a mix of tight hairpin turns and high-speed straights. Drivers must carefully balance aggressive tactics with tyre preservation, placing a premium on strategic decision-making. The Dynapro R213’s two-compound system allows teams to adapt flexibly to evolving stage conditions, with the Hard compound offering resilience against cuts and the Soft compound providing extra mechanical grip on looser surfaces.

Beyond technical support, Hankook is operating its ‘Brand World’ booth inside the service park throughout the event. This interactive space aims to elevate the premium image of the global brand with a motorsport heritage exhibition, racing simulators, branded merchandise and dedicated photo zones. Visitors are offered an immersive brand experience that complements the intense competition, as Hankook continues to demonstrate its engineering capabilities across one of the most abrasive and unpredictable rallies on the WRC schedule.

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Toyo Tire U.S.A. Corp (Toyo Tires) launched the 2026 Championship Off-Road (COR) racing season with a dominant three-class victory sweep, led by drivers Johnny Greaves in Pro-4, Ryan Beat in Pro-2, and Wyatt Miller in Prospec. The opening weekend, held for the second straight year at the Show-Me Shootout on the 1.2-mile short course at Lucas Oil Speedway in Wheatland, Missouri, saw Beat’s Pro-2 truck run on off-the-shelf 35x12.50R17 Open Country C/T tyres, while Greaves relied on off-the-shelf 35x12.50R17 Toyo Open Country R/T Trail tyres for his Pro-4 win.

During Saturday’s round one, Ryan Beat in the number 51 Bilstein / Toyo Tires / Rockstar Energy / Chevrolet truck seized the lead on lap two and never gave it up, securing Team Toyo’s first Pro-2 victory of the 2026 campaign. The following day’s round two featured Johnny Greaves piloting the number 22 Monster Energy / Toyota / Toyo Tires Pro-4 truck to an early-season checkered flag, while reigning Prospec champion Wyatt Miller, in the number 73 Bass Pro Shops / Toyo Tires / Chevrolet entry, added another win to start his title defence.

With the season-opening weekend complete, the COR series now prepares for the Antigo Off-Road National scheduled for 29–31 May 2026 at the Langlade County Motorplex in Antigo, Wisconsin.

Greaves said, “It felt great to show up for the first race weekend and take a win, along with a third-place finish. It was a strong way to start the season.”

Beat said, “I’m super happy to kick off another season with a win! The team has been putting in the work, and it shows. As the series continues, tyres become the difference-maker, and our Toyos were dialled all weekend.”

Adrian Puente, Manager – Events, Motorsports and Technical, Toyo Tire U.S.A. Corp, said, “After an incredibly successful 2025 season, it’s great to see Team Toyo drivers in the winner’s circle on opening weekend in Wheatland. Wins across three classes on off-the-shelf Toyo tyres highlight the quality of our products and their championship-winning-pedigree.”

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Liberty Tire Recycling’s SmartMIX rubber asphalt additive (RMA) has taken centre stage as a key component as the Alabama Department of Conservation and Natural Resources (ADCNR), alongside Alabama State Parks and the Alabama Department of Environmental Management, was named a finalist in the Market Development Excellence category of the inaugural Circle of Change Awards launched by the Tire Recycling Foundation (TRF).

For its award-nominated project, Alabama State Parks selected Liberty Tire Recycling’s SmartMIX to resurface roads and parking areas at public parks. Unlike complex liquid modifiers, the SmartMIX additive from Liberty Tire Recycling offers a simpler, cost-effective solution that improves asphalt compaction, flexibility and overall durability. Manufactured entirely from recycled tyres, the material itself remains recyclable, helping Alabama’s project boost pavement longevity while generating steady, long-term demand for recycled tyre rubber.

The Tire Recycling Foundation launched this national recognition programme to honour efforts that create lasting, expandable demand for products derived from scrap tyres, integrating such materials into conventional infrastructure and public works. The award category recognises initiatives that embed recycled tyre materials into mainstream infrastructure and public works programmes.

Winners of the Circle of Change Awards, including the Market Development Excellence category, will be announced on 14 May 2026, during the Tire Recycling Conference Awards Luncheon in Denver, Colorado.

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Infiniteria has appointed Proman as its Engineering, Procurement and Construction partner for a circular tyre recycling facility in Uddevalla, Sweden. This collaboration marks a decisive move towards establishing what the company describes as Europe’s leading circular tyre recycling business, with the Uddevalla site serving as the cornerstone for a future network of industrial-scale plants across the continent.

The company specialises in transforming end-of-life tyres into high-value recovered materials, aiming to accelerate the transition to a more resilient circular economy. The Uddevalla facility stands as Infiniteria’s flagship project and represents the initial phase of a broader European expansion strategy.

Committed offtake agreements are already in place with major customers including Preem, Nokian Tyres and Michelin, underscoring strong industrial demand for the recovered materials.

Kajsa Ryttberg-Wallgren, CEO, Infiniteria, said, “Bringing Proman on board as our partner is a major step forward for Uddevalla. They have a proven track record in delivering complex industrial plants, and the discipline and capability they bring mark a decisive step towards starting operations. We are fully committed to Uddevalla as the long-term home of our flagship facility, to our customers and to building Europe’s leading circular tyre recycling business.”

Francisco Carlos, Managing Director, Proman Portugal, said, “We appreciate the confidence and trust placed in Proman by Infiniteria as we take on the role of Engineering, Procurement and Construction partner in the Uddevalla project. Proman brings strong global expertise and experience to the project, including project management, engineering, procurement, construction and commissioning of complex industrial facilities. We look forward to working with Infiniteria to progress the Uddevalla project towards successful completion.”

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