Toyo sells a controlling stake in its Chinese subsidiary

The Board of Directors of Toyo Tire has approved the sale of 86% of the shares of Toyo Tire Zhangjiagang Co., Ltd., located in Zhangjiagang (Jiangsu, China), with Liaoning Hengdasheng Investment Co., Ltd. (LHI), based in Shenyang (Liaoning), as the buyer.

TTZ was established in 2010 to produce passenger and light truck tires primarily for the Chinese and other Asian markets. However, as noted by Toyo, TTZ was unable to fully utilize the competitive advantages of localized production in the Chinese market, which was associated with lower-than-expected brand recognition.

"Given these complexities, Toyo has decided to reconsider the position of the Chinese business in its strategy and has come to the conclusion that transferring the controlling stake in TTZ to a marketing alliance partner since 2023 will provide the company with the necessary support," Toyo reported, adding that TTZ products in Asia will be replaced by tires manufactured in Japan and Malaysia.

In 2024, TTZ's sales were $28 million, which is 33% less than in 2023 and almost 42% less compared to 2022. The deal amount is not disclosed, and TTZ's net assets are estimated at $46 million.

In China, the company owns another plant that produces truck and bus tires.

According to the results of 2024, Toyo received revenue of $3.71 billion, which is 2.3% higher than in 2023 and is a record figure for the company. Operating profit also increased to a record level and amounted to $618 million (+17% compared to the previous year). The main market for Toyo is North America, where the company's sales in 2024 were $2.35 billion, and growth was 15%.

In 2025, Toyo intends to continue increasing profitability and optimizing the range so that more than 70% of sales come from "priority products".

Photo: tohata.co.jp