Chinese Auto Market Set to Boost Growth for Bridgestone
According to a report in the Shanghai Daily, the Bridgestone Corporation is looking towards the booming Chinese auto market to help maintain a 30 per cent growth in sales in China this year. “Chinese sales were up more than 30 per cent in 2005, and we expect the same increase this year,” said Hiromichi Odagiri, chief executive for Bridgestone China. “We have run quite well in the first half.”
China, the world’s third largest auto market, produced 28.9 per cent more vehicles over the previous year to total 3.63 million units in the first half, according to the Ministry of Commerce.
Bridgestone now has a market share for all tyres of 12 per cent in China, Odagiri said in an interview last week. He estimated rival Michelin has a five per cent market share in China excluding its 70 per cent-owned venture with Shanghai Tire & Rubber Co.
Yves Chapot, head of Michelin China, said in March the company has a 20 per cent stake in the Chinese passenger car tyre replacement market.
Odagiri said Bridgestone China now represents less than 5 per cent of the Japanese tyre giant’s total sales. The company did not disclose sales figures by region, but, according to its annual results, Bridgestone posted sales of 2.69 trillion yen (US$23.25 billion) in 2005, an increase of 11 per cent from a year ago. This year it hopes to record 2.95 trillion yen in sales.
However, the rising costs of raw materials, including natural rubber, petroleum and plastics have forced it to revise its earnings forecast for this year. The Tokyo-based company said last month it has cut full-year net income forecast by 35 per cent to 65 billion yen.
Odagiri said one of the major obstacles he faces in the Chinese market is the reliance on imports of natural rubber, on which the government levies a 20 per cent duty. Bridgestone China currently imports 70 to 80 per cent of the rubber it needs from Thailand and Indonesia, with the rest coming from the southern provinces of Hainan and Yunnan, said Odagiri.