Yokohama Rubber SWOT & PESTLE Analysis

Strength

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Weakness

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Opportunity

1. Increasing vehicle production leading to more demand of tires: With the growth of vehicle production, demand for tires is also expected to grow even faster worldwide. The automotive industry is expected to rise owing to the favorable conditions across geographies. All the vehicle production including passenger cars and commercial vehicles are said to increase in terms of production and consumption. The tires market is expected to grow by 4.6% CAGR. One of the segments Radial, has the potential to grow over 4.7%.

2. Concept tires for increasing demand of electric vehicles: The increasing popularity of electric vehicle calls for a rapid rise in electric vehicle production. The global electric vehicle market is expected to rise at a CAGR of 22.6%. The Asia Pacific region is supposed to be the largest contributor. The rising number of eco friendly measures along with the support from different governments is said to be the reasons for this expected rise. Yokohama is all set to tap this market even. It has developed concept tyres in its fuel efficient BluEarth Brand for Maruti Suzuki India Limited’s new concept electric vehicle. This was displayed at Auto Expo 2020 in New Delhi which attracts huge visitors.

3. Regaining UHP tire market share: In 2000s, Yokohama tire enjoyed around 10% share of North American UHP tire market with its Advan brand but had lost its position to its major competitors meanwhile. But now Yokohama has bounced back with a great product offensive in last 12 months. The Advan A052 tire came in 2019 followed by the release of Advan Fleva in March 2019. Next came Advan Sport A/S+ which had improved wet braking, mileage and snow performance. Yokohama with all its right strategy and product offerings plans to grab the UHP market again. Instead of the high competition, Yokohama tries to differentiate through quality products.

Threat

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Political

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Economic

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Social

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Technological

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Legal

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Environmental

1. Working towards sustainability in natural rubber procurement: Since Yokohama is a leading manufacturer of tires and other rubber products, it is aware of its social responsibility to ensure sustainability in production and consumption of natural rubber. It engages in multiple initiatives to fulfill this responsibility. It takes part in various global projects aimed at establishing standards for sustainable natural rubber. It has a procurement policy for sustainable natural rubber which reflects its stance and addresses the measures to converts that stance into action. It also provides framework for cooperation and sustainability across the supply chain. Yokohama also announced a MoU to cooperate with Rubber Authority of Thailand. This aims to provide economic support for Thai natural rubber farmers and improve traceability to ensure transparency and soundness across the supply chain.

2. Sustainable production in agriculture and forestry through special tires: Yokohama’s Alliance Group has been working towards development of a new special type of tire which would enable forestry vehicles to move with low pressure in the tire thus preventing the soil of the forest form becoming compacted. With this ELIT (Engineered Low Inflation Tire) Technology, Yokohama plans to stop the damage to the forest soil by the vehicles moving inside the forest. There is also the self-cleaning design for keeping dirt off the tire and many forestry industry professionals commented this tire as a real premium tire. Yokohama aims that these tires be used by as many forestry industry professionals as possible. These tires would then help in growth of forestry sector by preventing soil compaction and maintaining fertility of soil.