In order to be able to cover the demand coming from emerging markets, Bridgestone Corp., the world’s largest tire maker, will spend a record 300 billion yen ($3.9 billion) next year to expand production. According to company’s officials, the investments will be guided towards building a factory in the U.S. in order to produce tires for construction and mining vehicles, and increase manufacturing capacity in China.
“In emerging markets right now, demand is topping supply,” Bridgestone Chief Financial Officer Akihiro Eto stated today. “We plan to expand our capacity to meet demand as soon as possible.”
By 2016, the emerging markets will sum up 30 percent of Bridgestone’s fuel-efficient tire sales, from less than 20 percent now, Eto said. The company is targeting overall annual sales increase up to 3.6 trillion yen by 2012 and set capital spending at 250 billion yen a year until 2016.
As demand is increased in the emerging markets, tire makers are investing in new factories. According to Michelin, the world’s second largest tire maker, global tire sales will reach 50 percent in the decade to 2020.