Bridgestone 2004 Annual Report Download - page 14

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12
Bridgestone Annual Report 2004
Operating income in our Japanese operations increased 2%, to ¥131.1 billion ($1.3 billion),
despite the rising cost of raw materials and the appreciation of the yen against the dollar. Underlying
that rise was a 1% increase in sales, to ¥1,068.9 billion ($10.3 billion), including inter-segment trans-
actions. The aftereffects of the fire at our Tochigi Plant crimped our supply capacity in tires, but we
succeeded in offsetting some of that curtailment through stepped-up inventory management and
productivity gains.
Japan’s ongoing economic recovery gained momentum in 2004, notwithstanding signs of slowing
growth in the second half. Corporate earnings improved, partly on the strength of export growth,
and personal consumption was resurgent.
We posted unit sales growth in Japan’s replacement market for tires. Contributing to sales growth
was our continuing strength in low-aspect-ratio tires, in studless winter tires, and in other high-
value-added tire products.
In business with automakers, our unit tire shipments were basically unchanged from the previous
year. Exports remain an important part of our tire operations in Japan, and unit exports remained
at basically the same level as in the previous year.
Upgrading our Japanese sales networks fortified our market position. At 2004 year-end, our Tire
Kan network comprised 453 large-volume stores that sold tires and automotive accessories and pro-
vided a broad range of tire and automotive service. The number of independent tire retailers who
participate in our Mr. Tire Man network numbered 638. And our Cockpit network, which serves
motoring aficionados with tires and automotive accessories, had 143 outlets.
We raised our tire prices in Japan in June 2004 for the first time in 13 years. We raised our export
prices for tires in January 2004 and again in January 2005.
Our Japanese business in diversified products expanded, led by strong sales of automotive com-
ponents. Also contributing to growth in diversified products were strong gains in electro-materials,
including filters for plasma-display panels, and in industrial products, including rubber hoses.
Displays based on our Electronic Liquid Powder are rewritable. Used as electronic price tags,
they will allow vendors to modify pricing on merchandise in retail outlets instantly and accurately.
And they will allow for displaying a full range of continuously editable product information in
addition to prices. The price tags retain their images when the power is turned off; they only
require electric power for rewriting their displays. That saves electricity, as well as simplifying
the task of displaying information.
Golf balls, along with other sporting goods and bicycles, are another facet of our business in diver-
sified products. Our diversified business also includes a vast range of automotive components and
industrial and engineering materials.
We supply tires for the powerful machines
of MotoGP racing. On two wheels or on four,
Bridgestone tires are consistent winners in
international motorsports.
Regional Review: Japan
Sales growth