'India is the fastest-growing market in our portfolio': Bridgestone India's Hiroshi Yoshizane

Bridgestone India’s newly appointed Managing Director Hiroshi Yoshizane has been entrusted with the target of boosting the company’s growth ahead of the market. He shares his vision with Autocar Professional.

By Kiran Murali and Ketan Thakkar calendar 08 Jun 2024 Views icon6196 Views Share - Share to Facebook Share to Twitter Share to LinkedIn Share to Whatsapp
'India is the fastest-growing market in our portfolio': Bridgestone India's Hiroshi Yoshizane

India is the fastest-growing market in this Japanese tyre maker’s global portfolio. Bridgestone currently has around 20 % volume market share in the replacement tyre market and has plans to improve it to 25 % by the end of the decade. The company has pinned its hopes on the passenger car radial (PCR) replacement tyre segment, which is poised to witness substantial growth by the end of this decade amid the robust sales of passenger vehicles over the recent years and improving road infrastructure in the country.

The company is gearing up to meet the growth potential and making an investment of USD 300 million over the long term for capacity addition. Improving its market share, both in terms of volume and value, is the top of Managing Director Hiroshi Yoshizane's to-do list.

What is your vision for India? What was the mandate given to you in your new role from the headquarters?

It has been a robust 25 years for Bridgestone in India. India is a significant market in our global operations. I would say it is the fastest-growing market in our portfolio. We are in a good position, in the aftermarket passenger car tyre market. Going forward, we want to solidify our position by being the premium mass leader. “Premium” means something that offers a higher and better experience, where people are willing to pay more, and “mass” means the company generates enough volume out of it without being a niche player. In the Asia-Pacific region, India is close to China in our market size, and we see India becoming number one in the region soon. We are expecting a huge growth in the car replacement tyre market. The projection is for the demand to grow 50% by 2030. We will try to outpace the market growth and gain market share.

Help us understand the replacement premium market. How big is the market, and what is Bridgestone’s share at this point?

The way we define the premium market is if you look at vehicle segments — the compact UV and above, which is fast growing. It is around 30-35% of the overall market. The other way we also look at premium is how tyre companies stack up in terms of prices. So, if you take both of these together, it is around 35-40% of the market and 50% of our mix. We exceed the market by around 10% in the mix. If you translate this to rim size, this is 15 inches and above. We see this segment growing much faster. On the OEM side, the tyre size is going up, which also impacts the aftermarket. We are number one in the aftermarket and have a much higher value market share than volume share. We are already premium mass leaders. We are going to fortify volume and revenue share going forward. In the replacement tyre market, today we have around 20% volume market share, which we will grow to 25%. This makes us the clear market leader because it is a nine-player market in terms of volume. Our value market share is at least 3-4 percentage points higher.

What is your assessment of Bridgestone India’s market? Can you take us through the company’s performance in recent years and talk a bit about future growth targets?

Bridgestone India grew by 9% in terms of revenue last year on a year-on-year basis. We are targeting to grow our revenue by 25% by the year 2026 with a similar level of operational profitability. Post-COVID-19, the industry grew at a CAGR of 12-13% but we grew much faster than the industry. Between 2019 and 2023, we gained 4 percentage points in market share. Our estimate is the replacement tyre market will grow at a CAGR of 7-7.5% by 2030 and will outpace the market growth to gain market share.

What about your capacity and investment plans? Do you have enough capacity to meet your growth targets, or will there be any addition?

We keep adding the capacity. We have a total capacity of around 30,000 tyres per day across our two plants — Chakan (Pune) and Indore (Madhya Pradesh). The current utility level is over 90 %. To meet the expected surge in demand, we will ramp up the capacity by an additional 10,000 tyres per day in the long term. The capacity expansion is happening at Chakan.

We are investing Rs 600 crore to expand the capacity in the Chakan plant by 6,500 tyres per day and it is expected to be commissioned by 2028. This investment is part of the USD 300 million, which Bridgestone India committed in 2017 for capacity expansion.

A lot of talks are going on about electrification. How is Bridgestone India evolving its game plan for the future? Are you developing something specifically for the electric vehicle?

Electric cars are increasing in India as well. Tyres are much heavier for these cars than those for internal combustion engine models due to the weight and traction. The tyres must be more durable and silent. Our observation is that consumer needs are the same, whether is it for the EV or ICE. So, we are creating tyres that are ready for EVs and perfectly fits the conventional vehicle. In some parts of the world, we are offering dedicated tyres for electric vehicles because of the market size. In India, we do not have it now. So far we do not have a plan. But our new tyres are EV-ready, which can meet both general performance demands and the specific requirements of electric vehicles.

From a corporate standpoint, where are you on the usage of recyclable materials? What is your target for CO2 reduction?

Sustainability is a big agenda for the Indian market. We are using some recyclable and renewable materials including natural rubbers. When it comes to manufacturing, we are carbon neutral.

We became carbon neutral last year. We introduced biomass and are using solar panels. When it comes to the product, it is very important. Our products deliver high fuel efficiency.

We are focusing on improving the rolling resistance of our products. As a responsible company, we want to have less impact on the environment. Our CO2 reduction targets are aligned with our global targets. We are targeting to reduce 30% emissions by 2030 and become carbon neutral by 2050. We also have a clear target on material circularity – 40% of our overall material should be renewable/recyclable material in the long term. 

This interview was first published in Autocar Professional's June 1, 2024 issue.

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