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 is embarking on a new venture as the inaugural Official Tire and Founding Partner of the U.S.-based simulation golf league Tomorrow’s Golf League (TGL), beginning with its second season. This alliance is built upon a common dedication to cutting-edge technology, a principle that defines both organisations. The league itself, a brainchild of sports executive Mike McCarley and golf icons Tiger Woods and Rory McIlroy, represents a forward-thinking approach to the sport. It utilises a custom-built, tech-centric arena to fuse simulator golf, live action and data-driven insights, creating a fast-paced and accessible format that is rapidly attracting a global audience.

This partnership will see Hankook Tire’s global branding integrated across multiple platforms to enhance its premium status. The company will achieve this through prominent LED signage within the SoFi Center, targeted television commercials and extensive visibility during the live broadcasts of TGL Season 2. The objective is to deliver a distinctive brand experience that bridges the gap between mobility and sports, engaging golf enthusiasts of all ages across North America and international markets.

The sporting action will commence with TGL Season 2 on 28 December, running through March 2026 for a total of 15 rounds. The league will feature six teams: Atlanta Drive GC, Boston Common Golf, Jupiter Links Golf Club, Los Angeles Golf Club, New York Golf Club and The Bay Golf Club. These teams, staffed by 24 active PGA Tour golfers, will compete in an intense race for the championship title.

Sanghoon Lee, Co-CEO, Hankook Tire, said, “We are delighted to join TGL Season 2 as a global partner. Through our partnership with TGL, which is reshaping the landscape of sports entertainment, Hankook Tire will further enhance its innovative technology and premium brand value, solidifying its position as a global leader in the mobility industry.”

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Bridgestone Retail Operations (BSRO), a part of Bridgestone Americas, has achieved a significant milestone with the full accreditation of its technician training curriculum by the National Institute for Automotive Service Excellence (ASE). This distinction, which places BSRO among a select few automotive service providers, confirms that its internal training programmes meet the institute's rigorous standards for educational quality and effectiveness.

The accreditation process was both extensive and intensive. To qualify, BSRO embarked on a four-year internal assessment and invested USD 3 million to revitalise its company training centres with the latest technology and equipment. This preparation culminated in an 18-month evaluation by ASE, which scrutinised 53 distinct training activities and involved more than 3,500 employees. The review thoroughly assessed all aspects of the programme, including the curriculum, training facilities, instructional equipment, instructor qualifications and, crucially, student outcomes.

This achievement has direct and meaningful implications for both technicians and customers. For the technicians working across more than 2,200 Firestone Complete Auto Care, Tires Plus, Hibdon Tires Plus and Wheel Works stores, this accredited curriculum provides a seamless pathway to earning individual ASE certifications. These certifications are widely recognised as a gold standard in the industry and are linked to greater career longevity and higher wage potential. For customers, this structured, high-quality training ensures that BSRO stores can consistently maintain and enhance the rigorous standards of trusted service they expect.

Marko Ibrahim, President, Bridgestone Retail Operations, said, “Achieving ASE accreditation positions BSRO as an industry leader in automotive training and education. This significant milestone reflects our unwavering commitment to excellence, elevating the quality and consistency of our training programme and empowering our technicians with industry-recognised credentials. The impact is already clear, and I could not be prouder of our team for their dedication to building a better skilled, more reliable workforce.”

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The European Tyre and Rubber Manufacturers’ Association (ETRMA) has officially rebranded as Tyres Europe. This new identity establishes a clear, dedicated focus on representing the European tyre manufacturing industry. The association aims to champion a competitive and innovative sector that advances safe, smart and sustainable mobility.

This strategic name change is designed to immediately clarify the organisation's mandate for all EU stakeholders, especially within a new political cycle and evolving market. Tyres Europe will engage in constructive, evidence-based policy discussions, advocating for the industry on key legislation including the EUDR, ESPR, Euro 7 and substance regulations. It will also push for an active industrial policy to bolster the competitiveness of Europe's tyre manufacturing base.

The association has elected Livio Magni of Pirelli as its new President and Paolo Pompei of Nokian Tyres as Vice-President for a two-year term. An official launch event is scheduled for 18 November in Brussels, featuring a strategic update from leadership and keynote speeches from high-level representatives of the European Commission and Parliament on Europe's mobility value chain.

Livio Magni, Tyres Europe President & Pirelli CEO Region Europe, said, “The tyre industry is a strategic pillar for Europe’s mobility, prosperity and safety. Through Tyres Europe, we will continue to work closely with policymakers and key stakeholders to ensure a predictable business environment that enables manufacturers to invest, innovate and compete in Europe. As an industry, we remain committed to driving innovation to deliver products that are increasingly safe and environmentally responsible.”

Paolo Pompei, Tyres Europe Vice-President and President & Nokian Tyres CEO, said, “Our sector is investing in capacity, efficiency and R&D to serve European mobility, reliably. Tyres Europe is committed to advocating for industrial policies that empower manufacturers to deliver greater value to society and to be recognised for their performance.”

Adam McCarthy, Tyres Europe Secretary General, said, “Tyres are as essential to vehicle performance as batteries and semiconductors and face multiple cross-cutting challenges that reflect the broader industrial transition. Tyres Europe will keep engaging with EU institutions to build coherent, workable rules that deliver real-world outcomes across competitiveness, circularity and innovation.”

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The Rubber Board organised a mass run in Kottayam town on Monday, bringing together its employees, their families, and college students as part of a nationwide fitness campaign now in its sixth year.

The Fit India Freedom Run 6.0 drew participants from Baselius College and CMS College alongside Rubber Board staff, forming part of a month-long initiative running from  2-31 October across India.

Launched in 2020 by the Ministry of Youth Affairs and Sports, the Fit India Freedom Run was conceived to commemorate two significant dates in India’s calendar—Independence Day on 15 August and Gandhi Jayanti on 2 October. The programme seeks to promote walking and running as accessible routes to improved health and physical fitness amongst the general population.

This year’s edition has adopted the theme of “Swachhata and Swasthiya” (Cleanliness and Health), reflecting the government’s emphasis on hygiene as a cornerstone of healthy living. The dual focus aligns with broader public health messaging that connects environmental cleanliness with individual well-being.

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