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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Sun Auto Tire & Service, one of the largest independent tyre and automotive service providers in US, has entered into a new sponsorship agreement with Ty Gaynor Motorsports, backing driver Ty Gaynor as he takes on the NHRA circuit in both Top Dragster and Super Stock categories. This alignment brings together two entities that prize performance, precision and consistency – qualities that are essential under the hood and behind the wheel. Sun Auto’s branding will appear on Gaynor’s race vehicles throughout the season, with the company’s nationwide network of over 575 locations symbolically travelling alongside him as he competes across the country.

At just 18 years old, Gaynor represents a third generation of drag racing heritage, having climbed from Junior Dragsters to secure his first NHRA national event victory in 2025 at the Dodge NHRA Nevada Nationals. That landmark Top Dragster win featured a nearly flawless reaction time and a run closing in on 200 mph (approximately 322 kmph). Company leaders describe the sponsorship as a natural outgrowth of Sun Auto’s deep roots in automotive service and its enduring commitment to high-level performance.

The 2026 season will see Gaynor continue his campaign in both Super Stock and Top Dragster competition, with his first race scheduled for the upcoming weekend. Through this partnership, Sun Auto reinforces its connection to the precision and dedication that define success both on the track and in the service bay.

Gaynor said, "Growing up around my family's shops that are now part of the Sun Auto Network, it feels like everything's come full circle having that logo on my cars. What started as family is now a network of more than 575 locations across the country."

Matthew Loos, Chief Marketing Officer, Sun Auto Tire & Service, said, "Whether it's in the shop, in the pits or on the track, consistency, precision and performance matter.”

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Dunlop Motorsport marked its competitive debut on the Nürburgring Nordschleife with a strong top-10 finish, underscoring the potential of its advanced tyre technology. Central to this effort was the use of Dunlop tyres, integrated with the innovative Sensingcore system developed by Sumitomo Rubber Industries. This proprietary technology transforms the tyre itself into a smart sensor, delivering real-time data on critical parameters such as wear, pressure, wheel load and track conditions without requiring additional hardware. By enhancing both safety and strategic decision-making, Sensingcore enables early detection of issues like loose wheel nuts and allows for optimised pit stops, proving its value under the extreme demands of the ‘Green Hell’.

Behind the wheel of the black-and-yellow Porsche 911 GT3 R, drivers Nico Menzel and Dorian Boccolacci delivered a determined comeback. After a challenging qualifying session left them in 24th place due to ill-timed yellow flag periods, Menzel wasted no time, surging to 18th by the end of the opening lap. Boccolacci then took over, extracting the full potential of the new Dunlop slicks with consistently fast lap times. A well-executed team strategy propelled the duo into the top 10 before the race’s midpoint. Although the leading pack had built an insurmountable gap by then, preventing a podium challenge, Boccolacci brought the car home in ninth place overall after four hours of racing.

The event served as a crucial development test for both tyre technology and Sensingcore under real-world conditions, highlighting its promise for future motorsport and production applications. Dunlop Motorsport will continue its preparation at the next Nürburgring Endurance Series round, the 57th Adenauer ADAC Circuit Trophy on 11 April 2026, as part of its buildup to the ADAC RAVENOL 24h Nürburgring in May.

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Magna Tyres marks its 20th anniversary today, 23 March 2026, celebrating two decades of expansion within the off-the-road and industrial tyre sector. From its beginnings as an entrepreneurial venture addressing the need for reliable OTR tyres, the family-owned business has evolved into a recognised international brand. It now serves customers across more than 130 countries, supported by a worldwide network of offices, partners and distributors.

Technical expertise and a commitment to customer focus have driven the company’s strategic growth, establishing it as a trusted partner across mining, construction, ports, terminals, recycling and agriculture. Headquartered in Waalwijk, the organisation draws on deep knowledge of rubber compounds and tyre engineering to deliver high-quality solutions tailored for demanding applications.

Over the past 20 years, the company has strengthened its global presence through new offices, expanded production capacity and strategic acquisitions. Long-term relationships with customers, distributors and partners remain central to its approach, blending entrepreneurial drive with the stability of a family-owned enterprise.

Michael de Ruijter, CEO, Magna Tyres, said, “This anniversary not only marks 20 years of growth but also the next phase. We will continue to invest in innovation, capacity and our global network to further strengthen our market position and serve customers worldwide at the highest level.”

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Hankook Tire, the exclusive tyre supplier for the ABB FIA Formula E World Championship, equipped the entire grid with its specialised iON Race tyre for the 2026 CUPRA Raval Madrid E-Prix. This marked a pivotal deployment for the tyre at the historic Circuito del Jarama, the longest circuit on the calendar, where it was tasked with handling the combined strategic complexities of a new race format.

Held over 23 laps of the undulating 3.934 km layout, this Season 12 round introduced the first single-header application of PIT BOOST alongside a revised ATTACK MODE, forcing teams to master a deeper layer of strategy. The fast-flowing corners and significant elevation changes made energy management paramount. Throughout the weekend, the iON Race tyre proved essential, offering stable grip and controlled thermal behaviour that provided predictable warm-up and consistent traction under the circuit’s demanding sustained cornering loads. This balanced performance window gave teams the confidence to commit to their pit strategies despite limited historical data at the venue.

Jaguar TCS Racing executed a flawless strategic race, with António Félix Da Costa securing victory in the inaugural Madrid E-Prix, leading teammate Mitch Evans in a 1–2 finish while Pascal Wehrlein rounded out the podium for Porsche. Following the conclusion of Round 6, the championship now prepares for Rounds 7 and 8 in Berlin, where the teams and the Hankook tyres will face a distinctly different challenge on the familiar Tempelhof circuit.

Manfred Sandbichler, Senior Director of Hankook Motorsport, said, “The Madrid E-Prix offered a valuable opportunity to see how teams adapted their strategy on Formula E’s longest circuit. With PIT BOOST and a revised ATTACK MODE influencing race dynamics, tyre consistency was an important factor as teams managed energy and race pace across the 23-lap distance. Insights from Jarama will contribute to our ongoing collaboration with the championship as the season continues.”

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