Statistics of the Tire Industry in 2022.

Key Tire Industry Stats

• The tire industry is estimated to be worth €122 billion world wide in 2021.
• Top 3 companies (Michelin, Bridgestone & Goodyear) combined has close to 50% of the tire industry revenue.
• The leading top 8 tire companies have an average profit margin of 9.2%.
• The highest profit margin in 2022 goes to Continental tires with an impressive 14.4% ratio.
• Bridgestone is the largest tire manufacturer in North America with a revenue of €9,282 million.
• Pirelli is the highest spender in research and development relative to its revenue at 4.5%.

2022 Top 8 Tire Manufactures World Wide

• Revenue : €23,712 mil
• Profit : €2,953 mil
• Profit margin: 12.45%
• R&D cost / Revenue :2.88%
• No of employees: 124,760
  _{*2021 figures}

After disposing Bridgestone in 2021 as the number 1 tire manufacturer in terms of revenue generated, Michelin managed to retain its number one spot in 2022. Widely accepted as the undisputed technology leader in the tire industry, Michelin had a very successful year by managing the raw material cost increase while launching multiple new products.

2. Bridgestone

• Revenue : €21,750 mil
• Profit : €2,840 mil
• Profit margin: 13.06%
• R&D cost / Revenue :2.94%
• No of employees: 138,036
  _{*2021 figures}

After a disastrously bad COVID year in 2020, Bridgestone bounce back to in 2021 as revenue grew by 8.1%. Bridgestone did what they do best which is to produce a huge amount of tires at a reasonable cost. Bridgestone together with its subsidiary Firestone is still the largest tire manufacturer in North America.

3. Goodyear

• Revenue : €16,090 mil
• Profit : €702 mil
• Profit margin: 4.36%
• R&D cost / Revenue :2.84%
• No of employees: 72,000
  _{*2021 figures}

Biggest news from Goodyear in 2021 was the acquisition of Copper tires to become second largest tire manufacturer in North America from a revenue perspective. This allowed them to inorganically leap frog Continental to be the 3rd largest tire producer world wide. Goodyear however had the lowest profit margin among the top 8 manufactures as they struggle to offset the high raw material cost.

4. Continental

• Revenue : €11,800 mil
• Profit : €1,701 mil
• Profit margin: 14.41%
• R&D cost / Revenue :2.5%
• No of employees: 57,217
  _{*2021 figures for tire division only}

Continental tires had a phenomenal year as they managed to record the strongest profit margin among the top 8 tire manufactures. Sales were up 16.2% from the year before as the replacement market contributed an 11% increase compared to 2020. Continental were able to handle the raw material price increase hence generating such a high profit margin relatively to its competitor.

5. Sumitomo Rubber

• Revenue : €5,878 mil
• Profit : €306 mil
• Profit margin: 5.21%
• R&D cost / Revenue :3.1%
• No of employees: 39,298
  _{*2021 figures}

Sumitomo, which is famously known for its Dunlop and Falken brands, had a solid year. Sales were up 17% compared to 2020. Like most of its competitors, Sumitomo struggled with the significant increase in raw material prices, which accounted for about 85% of its profits. Sales in the tire division are forecasted to be up 14%, with a 79% profit increase for the year 2022

6. Pirelli

• Revenue : €5,332 mil
• Profit : €322 mil
• Profit margin: 6.03%
• R&D cost / Revenue :4.5%
• No of employees: 30,690
  _{*2021 figures}

Pirelli which is the current F1 tire supplier had a better year in 2021 compared to the 2020 Covid year. Sales were up 23.9 % as the tire volume pick up post pandemic. Net income rose 653% as the tire volumes world wide pick up steam. Interesting fact about Pirelli, they are the highest spender in research and development relative to its revenue at 4.5%.

7. Hankook

• Revenue : €5,279 mil
• Profit : €474 mil
• Profit margin: 8.98%
• R&D cost / Revenue :–
• No of employees: 20,000
  _{*2021 figures}

Similarly to Pirelli, Hankook had a recovery year as sales rose 10% from 2020. The first half of 2021 were extremely solid for Hankook but the 2nd half was partly plagued by global supply chain disruption, semiconductor shortage and rising raw materials costs,. They also had some delayed sales opportunities caused by labour strikes at Hankook’s Daejeon and Geumsan plants in Korea.

8. Yokohama

• Revenue : €3,483
• Profit : €316
• Profit margin: 9.07%
• R&D cost / Revenue :–
• No of employees: 27,222
  _{*2021 figures}

The last manufacturer to make the list is Yokohama. Similar to the other companies beforehand, they also had a good recovery year as revenue rose 21% compared to 2020. For 2022, Yokohama are forecasting sales revenue of +11.8% YoY, a new all-time high. However, challenges such as rising material and energy prices as well as higher logistics expenses would weight on profits.

Top 8 Tire Manufactures Head Count

• Bridgestone is the largest tire manufacturer in terms of employment as they have 138,036 staff beating Michelin by 13,000.
• The amount of employee is more or less proportional to the company’s sales revenue.

Summary

Overall, it has been a good recovery year for all the tire manufactures as the world starts to move on past the Covid struggles. Year 2022 will pose even more challenges due to the increasing raw material prices and let’s stay tune to see which manufacturer can stay on top of the standings.

Sources: Michelin, Bridgestone, Goodyear, Continental, Sumitomo, Pirelli, Hankook, Yokohama.