Bridgestone 2003 Annual Report Download - page 12

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10
BRIDGESTONE
Why
A strong presence in China is essential to our strategy of asserting the most-global reach in
the tire industry. Along with presenting huge and growing demand for replacement tires, China
is the scene of rapidly expanding vehicle production. Our customers in the automobile industry
naturally expect us to support their Chinese operations with locally produced, high-quality tires.
These considerations have prompted us to acquire two tire plants in China and to build a third,
which is under construction.
Strengths
By the end of 2003, we were marketing tires in China through approximately 4,600 retail outlets,
including about 800 family-channel dealers. Our Chinese sales network gained an important
new dimension in August 2003. That was when we opened the first outlet in our new franchise
network of tire retailers, called Car Wings. Sales are booming at the inaugural outlet, which is
in Guangzhou, and we plan to have 50 Car Wings outlets by the end of 2004 and 200 within
three years.
Supplying tires to our Chinese sales channels are Bridgestone plants that produce passenger
car and light truck tires in Tianjin and truck and bus tires in Shenyang. Our third Chinese tire plant
will begin producing passenger car and light truck tires in Wuxi Province in the latter half of 2004.
We also supply the Chinese market with tires from plants in Japan and in Southeast Asia.
Our growing presence in China extends to product lines beyond tires. Surging demand from
automakers there has prompted us to build a plant in Jiangsu Province to supply antivibration
components for automobiles. China is the world’s largest and most cost-competitive producer
of bicycles, and we have operated a bicycle plant in Jiangsu Province since the mid-1990s. Other
Bridgestone plants in China produce golf balls, rubber fenders for wharves, and rubber tracks
for tractors.
Results
We estimate that our share of the Chinese market in 2003 was
about 10% in passenger car and light truck tires and about 15%
in truck and bus tires. Chinese demand grew solidly in 2003. The
SARS outbreak affected sales somewhat in the first half, but the
effect was small. Sales of passenger cars and light trucks in China
rose 75%, to nearly 2 million vehicles. Sales of trucks and buses
rose more than 12%, to some 2.4 million vehicles.
We announced plans to build
a Chinese plant to produce
antivibration components for automobiles.
Work continued on schedule on what will be
our third Chinese tire plant. A new franchise
network that we launched in 2003 will provide
Chinese consumers with tires and related prod-
ucts and services. We also strengthened our
Chinese sales network for truck and bus tires.
2003
HIGHLIGHTS
Bridgestone tires were a familiar product line in China
more than 50 years ago. We are reasserting a strong
brand identity there through extensive advertising
and through a fast-growing retail network. Growing equally fast is our
Chinese production network. That network includes two tire plants and
a third under construction. It also includes four plants for producing
diversified products. A plant under construction will produce antivibra-
tion components for automobiles.
Industry Leadership:
China