History of the Japanese Tyre Industry
The production scale of the automobile tyre industry of Japan steadily increased from the second half of 1990s to 2008, supported by almost steady demand in the domestic market and active export. It declined severely in 2009 due to the world economic crisis. Though it recovered to a certain extent in 2010, it gradually decreased thereafter, and one of the causes is globalization of the production system. It was considerably lower than the previous year due to the spread of COVID-19 around the world in 2020. The number of tyre production in 2023 was 129.84 million units, and the amount of rubber consumption was 0.97 million tons. Both figures were lower than the previous year, and did not reach the level of 2019, before the spread of COVID-19.
The tyre industry of Japan accounts for about 80% of the domestic rubber industry in terms of rubber consumption, and its trend by decade is as follows.
1940s-1950s
The industry restructured after World War II, following the destruction of facilities and equipment. In the early 1950s, after the longterm government regulation and during the Korean War, the industry enjoyed special procurement and improved tyre demand.
However, after the Korean War, deflationary pressures affected the Japanese economy. Demand for tyres decreased sharply, and the tyre market experienced considerable difficulty.
1960s
Around 1960, full-fledged motorization, including increased automobiles on the road and the advent of expressways, spurred the industry toward a technological revolution, including expansion and automation of equipment, as well as changes in the raw materials for tyres, and enjoyed a high-growth phase.
1970s
From 1970, the industry suffered demand downturns temporarily as a result of the first oil crisis. However, exports led the growing Japanese economy. Tyre production expanded, as a result of an increase in the number of vehicles produced and registered, and product diversification spurred demand
1980s
Low economic growth under the worldwide recession following the second oil crisis (1979) combined with the progress of radial tyres, which caused demand downturns, forcing the Japanese tyre industry into a period of extreme difficulty. In 1983, however, a turnaround was seen owing to economic recovery in Japan and in principal nations worldwide. In September 1985, however, tyre demand dropped, influenced by the strong yen. Then in December 1986, the Japanese economy started to grow steadily, backed by solid consumer spending and capital investment. As a result, the volume of rubber consumption reached the 1-million-ton mark in 1989.
1990s
With the collapse of Japan’s “bubble economy,” the stock market crashed, corporate profits declined, the job environment became uncertain, consumer spending and capital investment slowed, and the yen appreciated causing further deepening of economic stagnation. Signs of recovery were seen in 1995, but in 1997 Japan entered a recession. In 1998 and 1999, large-scale restructuring in the financial sector and the introduction of foreign capital into the automotive industry arose as serious concerns.
On the other hand, the global economy in general remained steady despite economic difficulties in Southeast Asia, supported by the robust U.S. economy. In this environment, the Japanese tyre industry grew overall, although rubber consumption fell below the 1-million-ton mark in 1993. Supported by brisk exports, Japanese tyre production volume increased to 1.13 million tons in 1999, a record high.
2000s
The Japanese economy was on a trend of gentle recovering, and although it was still suffering from such problems as continuing high prices of raw materials, it continued the biggest economic growth after the Second World War owing to improved corporate earnings and increased capital investments. Global economy continued strong as a whole until 2007 owing to supports by the robust economy of the United States, Europe, Middle East and BRICs countries, and tyre rubber production volume marked a record high every year from 2002 and it reached 1.36 million tons in 2007.
However, tyre production volume took a downward turn in 2008 after seven years due to the serious worldwide economic crisis from September 2008 and decreased by 360,000 tons, then declined to 990,000 tons under 1 million tons after fifteen years.
2010s
The economy of Japan recovered, supported by the government’s economic policies etc, but stagnated in 2011 due to the Great East Japan Earthquake and the record appreciation of the yen. After 2013, it continued its gradual increase by the effect of high stock prices and the depreciation of the yen, but since 2018, due to the effect of the global economic slowdown, it experienced a negative growth in 2019. The world economy also gradually recovered from the financial crisis, and in addition to the United States where stable growth continues and Europe that turned into positive growth since the second half of 2013, emerging economies also remained robust in general due to recovery in resource prices and other factors, however, growth slowed in many countries and regions since the middle of the 2018. The losing momentum of growth led to the decrease of the tyre volume for export from Japan, and the tyre production amount on a rubber consumption basis in Japan has decreased from 1.20 million tons in 2010 to 1.07 million tons in 2019.
2020-2023
The Japanese economy was sluggish throughout the year in 2020 due to the impact of COVID-19. Since 2021, effect to the relaxation of behavioral restrictions, it turned to positive but lacked strength due to the turmoil in the global supply network and high prices of commodities. The world economy was also affected by COVID-19, and had negative growth in many countries and regions in 2020. Although the economic activities were normalized and economic recovery trend continued in 2021, but since 2022, the world economy was an inflationary trend in many countries due to high prices of raw materials and soaring energy costs. Under such circumstances, the rubber amount used for tyre production in Japan for both domestic and export decreased from the previous year in 2023, did not reach 1.00 million tons for the first time in three years since 2020, when it was greatly affected by COVID-19.