Bridgestone 2003 Annual Report Download - page 4

02
BRIDGESTONE
2003
TIMELINE Jan. Feb. Mar. Apr.
•Announce intention to acquire equity stake in Finnish tire
manufacturer Nokian
•Announce plans to build third tire plant in China
•Announce plans to build carbon black plant in Thailand
•Begin raising tire prices in Asia (outside Japan), Oceania, Middle East,
and Africa
•Receive eighth consecutive Supplier of
the Year award from General Motors
•Bridgestone Americas begins raising tire prices
To Our Stakeholders
In a tumultuous year, net income increased 96%, to ¥88.7 billion ($828 million), on a 2%
increase in net sales, to ¥2,303.9 billion ($21.5 billion). The surge in net income followed a special
charge in the previous year for write-downs of fixed assets at Bridgestone Europe.
I used this message last year to emphasize our ongoing efforts to
•help our flagship subsidiary in the Americas achieve sustainable profitability in tire operations
•position our flagship European subsidiary as a credible contender in its market
•assert a compelling competitive edge in tire technology
In the past year, we registered progress in addressing all three of these priorities.
Growth
Yen-denominated sales declined slightly in the Americas in 2003, reflecting the appreciation
of the yen against the U.S. dollar. Operating income rose, however, as unit sales growth and
price increases for tires offset the rising cost of raw materials and the strong yen. Bridgestone
Americas—which returned dramatically to profitability in 2002—remained in the black. Solid
profitability in retail operations, in diversified products, and in Latin American tire operations
compensated for continuing losses in North American tire manufacturing and wholesaling.
Business expanded strongly in Europe. Bridgestone Europe is refocusing its sales portfolio on
high-performance tires and on other high-value-added products. That strategic shift and progress
in strengthening sales channels contributed to the company’s sales growth in 2003. Bridgestone
Europe has also raised prices to offset the effect of rising raw material costs.
Sales in Japan declined slightly from the previous year. We retain the largest share of Japan’s
tire market by far, and we are devoting increased resources to our marketing network to reinforce
that leadership amid escalating competition.
Our business continued to grow rapidly in China and other emerging markets in 2003. We are
building a third tire plant in China and a third tire plant in Thailand. Also in China, we launched a
franchise network of tire outlets in 2003, and we are building a Chinese plant to produce antivi-
bration components for automobiles.
The plant construction projects are part of a worldwide investment program. Along with
addressing the upward trend in overall global demand, that program is strengthening our supply
capabilities in high-performance tires and in tires for large rim diameters.
Technology
Bridgestone tires again carried Ferrari and Michael Schumacher to the constructors’ and drivers’
championships in Formula One competition. That was the sixth consecutive championship year for
Bridgestone-equipped competitors in F1 racing.
We remain the world’s leading supplier of runflat tires, which function safely for up to a speci-
fied distance at up to a specified speed after a loss of air pressure. BMW selected our runflat tires
in 2003 for its new 5 Series and 6 Series families of high-performance cars. Other automakers also
continue to offer our runflat tires on a growing range of models, including minivans and other
family-oriented vehicles.
Another technological highlight of 2003 was Airbus’s decision to offer Bridgestone radials on
its huge A380 airliner, now in development. We later signed a contract with Airbus to supply tires
for the entire line of Airbus commercial airliners in production.