Global CEO Commitment

Photo Daisuke Yoshinari

Bridgestone in recent years has faced a business environment in which geopolitical developments, calls for sustainability, technological innovation, and other factors are intertwined in complex ways, and where structural changes in the mobility and tire industries are progressing at an unprecedented scale and speed. We have seen “new challenges to management” in 2025 as well, including the impact of U.S. tariffs, and the outlook remains uncertain globally. In this kind of business environment, Bridgestone cannot survive unless we implement mitigation measures agilely with a high sensitivity to changes. By further strengthening our foundation for sustainable value creation and building strong business quality, we will “turn changes into opportunities” and realize sustainable value creation toward our vision of becoming a "sustainable solutions company."

Even as we turn changes into opportunities and sustainably create value, what is fundamental to our strategy remains unchanged. We will deepen the linkage between our premium tire business as our core business and the solutions business as a growth business, thus reinforcing our efforts to amplify value from the “produce and sell” phase and customer “use,” with Dan-Totsu products at the core. Our strategy is based on the following points.

• Transforming into a new R&D and manufacturing and value-creating company that leverages strengths as a Japan-based company
• Establishing a competitive advantage by expanding the solutions business to solve customer pain points
  →Leading to customer success by enhancing customer experience value
• Supporting these efforts through the fusion of digital and strong “real (physical)” capabilities -i.e., capabilities involving human knowledge and expertise, including the on-site capabilities and craftsperson skills of manufacturing in Japan.

As we “turn changes into opportunities,” I believe such actions ought to be at the core of our initiatives, and must be further reinforced. Furthermore, we are taking on the challenge of the circulation of value from the “produce and sell” phase and customer “use” of tires through to their “renewal” to raw materials, as recycling. With recycling as part of our exploratory business, we will also aim to circulate value in our business portfolio across our core business, growth business, and exploratory business.

Amid drastic changes to the business environment, the importance of addressing global management risks grows year by year. Here, we have identified three priority management items: (1) 6PPD (an antioxidant and antiozonant widely used in the tire industry) and TRWP (tire and road wear particles), which result from friction between the tire and the road surface-this friction is essential to ensuring safe mobility with peace of mind-consisting of a mixture of tread (tire surface) and road pavement materials; (2) the requirements of the European Union Deforestation Regulation (EUDR); and (3) the response to cyber risks. In addition, to make sure that we respond with high sensitivity to any management risks that arise, we have established a Global Management Risk Committee, composed of top management from each regional business and function. We will turn changes into opportunities by pursuing response measures that capitalize on Bridgestone’s strengths.

The “2030 Long Term Strategic Aspiration” we announced in August 2022 materializes these strategies and outlines the path forward to 2031 as a guiding north star, when we mark the 100th anniversary of the company’s foundation, offering a roadmap for unwavering management even in an era of turbulent changes. The strategy focuses on creating new value and gaining competitive advantage for Bridgestone. It will be realized through amplifying the value of Dan-Totsu products and, based on that, amplifying trust with society, our partners, and customers. Furthermore, by building trust with customers, the data will be shared from them which will also amplify the value of the data. At the same time, we are committed to supporting vehicles and vehicle operation systems, while contributing to sustainability such as carbon neutrality and a circular economy, which is at the core of our management and business.

We incorporated the aspiration into an action plan reflecting changes in the business environment, the Mid Term Business Plan (24MBP) announced in March 2024, which covers the three years from 2024 to 2026. The plan rests on three axes of management for addressing management issues both inside and outside Bridgestone, seeking to: “tackle past negative legacies squarely without delay,” “focus on execution and delivering results for immediate issues,” and “lay a foundation for future growth.”

Based on this policy, we formulated a business shaping scenario to “create good business quality,” “create good tires,” “create good business,” and “create new business sowing good seeds for the future.” In line with this scenario, we are promoting initiatives that “further focus on value creation.”

Among the four scenarios of the business shaping scenario, the top priority is “creating good business quality.” Responding to change and creating value sustainably in a turbulent business environment requires improvements to management and working & business quality. We have been pursuing quality management activities under “Bridgestone’s unique Deming Plan” since the 1960s, and have re-enhanced understanding of the plan for all employees at all levels of the organization globally. The basic thought of our Deming Plan-“good company quality makes good quality of products and services”-and the five concepts that represent basic behavior-“PDCA,” “why why why analysis,” “standardization,” “explain by using accurate data,” and “control important points”-act as a “framework” for thinking and acting for the people who work at Bridgestone, and we continue to reinforce these principles in our various workplaces globally in the pursuit of improved creativity and productivity.

Furthermore, we are reinforcing initiatives that serve as a foundation for Bridgestone way of value creation, including the Dan-Totsu products that are Bridgestone’s strength; digital transformation fusing digital and “real (physical)” capabilities, i.e., the strong craftsperson skills we have cultivated in on-site production and sales (Genbutsu-Genba); intellectual property strategies which support value creation across the value chain, from the development of tires and solutions to our business domains; talent creativity enhancement that reinforces talent investment as well as increases added value, striving to achieve the growth of the company and the growth of each employee like two wheels moving forward.

We will also advance our Sustainability Business Model to build a foundation for the sustainable enhancement of corporate value and the creation of sustainability value. This will involve reinforcing efforts to achieve carbon neutrality and realize a circular economy across the value chain, from the “produce and sell” phase and customer “use” through to their “renewal” to raw materials, and pursuing nature positive initiatives, integrating our business strategy. Under these initiatives, we are continuously reinforcing our effort to reduce CO₂ emissions and increase the ratio of renewable energy and recycled & renewable materials, which we are currently achieving more than at our planned levels. In terms of SX, the consistency of our management strategy aimed at realizing our vision of becoming a “sustainable solutions company,” the initiatives for enhancing sustainable corporate value through the execution of the strategy, the identification of key issues in sustainability, and our information disclosure based on these management issues and priorities has been recognized by external stakeholders. As a result, we were selected for the newly established “SX Brand 2024,” and we have also been selected again for 2025. I believe it remains vital to further strengthen these management fundamentals for value creation, especially in the context of the rapidly changing business environment.

Regarding the foundation for value creation, although we are still far from where we aim to be, I believe the ongoing transformation of our third foundation has yielded some results. On the other hand, the most important management indicators of earning power and capital efficiency, which are directly linked with corporate value, such as the adjusted operating profit margin, ROIC, and ROE, have continued to trend downward since 2021. This fact has raised significant attention within the global management team.

In our full-year financial results for 2024, the acceleration of structural changes in the tire industry due to factors such as the aggressive rise of Chinese EVs and low-end imports mainly in Latin America and Europe has emerged “new threats.” In this context, although we were able to secure increases in both revenue and profits versus the prior year, we did not reach the levels we committed to in our external announcements in terms of the adjusted operating profit margin, ROIC, and ROE, which are our most critical management indicators. We will pursue management with stricter discipline, including by streamlining ordinary resources and strategically allocating strategic investments and expenses, recognizing the need to further reinforce earning power and improve capital efficiency to build stronger business quality.

Under these circumstances, we positioned 2025 as a “year of emergency and crisis management.” In the turbulent business environment, we are prioritizing actions related to “defense” while also taking actions related to “offense,” paving the way forward to future growth.

Our actions related to “defense” put top priority on the pursuit of improvements in management and working & business quality. As of January 1, 2025, we have established a new global executive management structure. We placed four Executive Vice Presidents under the Global CEO, and clarified the business responsibilities (profit and loss responsibilities) of BRIDGESTONE WEST and BRIDGESTONE EAST as well as the responsibilities on the part of the Global Chief Technology Officer (CTO), the Global Chief Administration Officer (CAO) & the Global Chief Strategy Officer (CSO) to clarify the cross-functional and global optimization responsibility. As the four Vice Presidents each carry out their roles and responsibilities on an equal footing, this will strengthen our management and governance, ensure appropriate checks and balances, and promote management focused on “execution and delivering results.” Additionally, for the first time at Bridgestone, we established the position of Global Chief Innovation Officer (CIO) under the Global CTO, with the aim of accelerating innovation to create new value, and also appointed a BRIDGESTONE WEST CTO to strengthen the development of Dan-Totsu products for the WEST region. These seven executive officers, including the Global CEO and four Executive Vice Presidents, the Global CIO, and the BRIDGESTONE WEST CTO, are leading Bridgestone in the “year of emergency and crisis management.” Two of the executive officers are foreign nationals and, for the first time in Bridgestone’s management, we have three executive officers who come from a technical background. This gives us a structure that emphasizes diversity and technology and innovation for future growth while enabling management with stricter discipline.

Following the business restructuring and rebuilding (1^st stage) we launched right after our third foundation in 2020 and implemented through 2021, we are now executing a 2^nd stage. In particular, for the Europe business, which faces challenging conditions in terms of both performance and the business environment, we started taking concrete steps in the second half of 2024 to “change the shape of the business,” assessing and implementing rebuilding in all areas, including production, sales and retail, and headquarters functions. For business segments of truck and bus tires, retread tires, and retail, we have started to see profitability improvements as a result of rebuilding. Moreover, we are pursuing integration and simplification of organizations across the WEST based on the improvement of business processes. Additionally, in North America, as announced in January 2025, we are optimizing business footprints and costs, including the closure of the LaVergne Plant that produces truck and bus tires and reducing workforce in sales and business operations. In the Latin American business, which was one cause of the deterioration in our performance in 2024, we have also begun reducing production capacity and workforce at each of our manufacturing footprints to “change the shape of the business.” Additionally, we will simplify the organization and integrate functions at BRIDGESTONE EAST as well.

In terms of actions related to “offense,” we continue to reinforce Dan-Totsu products. For passenger car tires, we are expanding the launch of new products equipped with ENLITEN, our base technology for product design, positioning these as “new premium.” For off-the-road tires for mining vehicles, we are expanding the Bridgestone MASTERCORE. Moving forward, the development of the next generation of Dan-Totsu products will continue to be enhanced. We are taking actions to reduce business costs globally across the value chain from raw material procurement to development, production, and logistics. This effort will further reinforce business quality. The global business cost reduction activities, encompass our global procurement activities; our supply chain management and logistics transformation; Bridgestone Commonality Modularity Architecture (BCMA), a shift to Green & Smart, and steady on-site productivity improvements, underpinned our business performance in 2024 even in an challenging business environment. BCMA in particular has steadily generated benefits, mainly in reducing development and production costs. By evolving our on-site activities (Genbutsu-Genba approach), we plan to accelerate its benefit generation and contribution to business performance from 2026 onwards.

As we approach our 100th anniversary of founding, we strive for “growth with quality” by linking actions to reinforce earning power and improve capital efficiency. We have positioned the U.S. business, the India consumer tire business, and commercial BtoB solutions (mainly mining and aviation solutions) as markets to grow, setting clear priorities for strategic resource allocation globally. In the U.S. business in particular, driven by our commitment to continue contributing to society and the economy and supporting the mobility of people and goods in the U.S., we are further strengthening our commercial tire and solutions businesses (trucks and buses), which boast a strong business foundation. At the same time, we are focusing on rebuilding the consumer tire business in the U.S. and steering toward growth. This initiative will entail reinforcing our multi-brand strategy by capitalizing on the strengths and characteristics of the Bridgestone and Firestone brands across the entire value chain, including our brands, products, and channels. We are also shifting resources to strengthen the Dan-Totsu products that underpin this strategy, such as by sending experienced engineers from Technology Centers in Japan to offer support in the U.S. In our India consumer tire business, we are expanding production capacity and investing in technology development such as establishing a satellite technology center to strengthen Dan-Totsu products tailored for the India market. Additionally, by strengthening sales channels centered around family channels, we will further solidify our position as a market leader that we have built up since we established a manufacturing and sales company in India in 1996. In commercial BtoB solutions, we are working closely with customers on-site (Genbutsu-Genba) to solve their pain points. The solution primarily focuses on mining and aviation, enabling us to amplify the value of Dan-Totsu products, amplify trust with customers, and amplify data value, and are creating new social value and customer value, including through co-creation with customers.

Looking forward, we will reinforce our sustainable global motorsports activities as a new corporate branding activity. We have been selected as the sole tire supplier for the ABB FIA Formula E World Championship from the 2026-2027 season. Having withdrawn from Formula 1® in 2010, Bridgestone will return to the FIA World Championship for the first time in 15 years and restart our activities to support global motorsports. We will leverage our sustainable motorsports activities, which represent a “challenge for excellence” as a “mobile laboratory,” to extend the technology honed in these activities to replacement tires and evolve the next generation of ENLITEN technology. Furthermore, we will take the lead in pursuing sustainability across the entire value chain, starting from motorsports tires, and speed up Bridgestone’s company-wide transformation, including accelerating innovation and fostering a corporate culture of continuing to take on challenges. In addition, by demonstrating our determination to embrace the challenge for excellence, we will continue to build a sustainable premium brand. Our aim is to continue to empower each and all to achieve their “best” and be essential to the future of mobility.

In 2025, by following through on these strategies related to “defense” and “offense,” we are striving toward “growth with quality” from the second half of the year. Nonetheless, we face an ongoing turbulent business environment, and have encountered new challenges to management this year, rooted in the impact of U.S. tariffs. As of the end of May 2025, numerous uncertainties remain regarding the impact of these tariffs, but we are taking steps to deal with the situation by continuously assessing the direct impact on raw materials costs and on the tire units (higher costs of imported tires in the U.S., etc.) stemming from the terms of the tariffs (some of which we have incorporated into our assumptions). As of May 15, 2025, we estimated the direct impact on adjusted operating profit to be approximately 45 billion JPY, assuming we will offset the impact to some extent through a combination of measures. In Bridgestone, the direct impact can be illustrated by the fact that, for Passenger tires, approximately 10% of the products produced in Japan are exported to the U.S. Additionally, assuming that the tariff application for products from Mexico and Canada is deferred, about 4% of our global sales will be affected by U.S. tariffs.

In this business environment, the importance of “the year of emergency and crisis management” has been emphasized. We need to turn changes into opportunities on a global scale. Reflecting Bridgestone’s history, I am always mindful of “turning changes into opportunities” in my approach to management, even after our third foundation in 2020. What we are called to do in terms of our global direction remains unchanged. I see these circumstances as an opportunity to build even stronger business quality by further reinforcing our initiatives. In addition to carrying through and augmenting actions related to both “defense” and “offense,” we will streamline our business structure globally, including taking additional steps in business restructuring and rebuilding (2^nd stage) and optimizing the global supply chain by leveraging our strengths as a global company.

Also, starting with measures to mitigate the impact of U.S. tariffs, we will thoroughly address the market and business structural changes by country, and will initiate “growth with quality” from markets to grow in the second half of 2025. In the U.S. in particular, our most important market, the need is to further speed up our reinforcement of the business in terms of both sales and production, mainly by rebuilding our consumer tire business. For example, we expect an increase in car maintenance demand due to the aging of vehicles in the U.S., as well as growing demand for tires in the Tier 2 and Tier 4 zones. In this environment, the value of Firestone, a traditional American brand, will become even more important. By enhancing brand power through collaborations with events like the NTT INDYCAR® SERIES and deploying ENLITEN technology to Firestone products, we aim to strengthen our product offerings and establish a unique value position. Additionally, we will comprehensively strengthen our brand, products, and channels by expanding our equity retail network, Firestone Complete Auto Care, centered on service expansion and building new family channels. Through these initiatives, we believe we can create greater customer value by being closer to our customers and solving their pain points. In terms of production, Bridgestone has promoted a local production for local sales structure to reinforce a resilient global business foundation. Currently, the ratio of local production for local sales in the U.S. is approximately 60% for passenger car tires and approximately 70% for truck and bus tires and off-the-road tires. In the Americas, which includes North and Latin America, this ratio is approximately 90% for passenger car tires and approximately 80% for truck and bus tires. As part of strengthening the U.S. business, we plan to expand production capacity for passenger car tires to maintain and improve these ratios. We will make small-scale investments at the Aiken Plant in the U.S. to optimize the balance between processes while increasing productivity and maximizing the use of existing equipment including at the Wilson Plant. We will start to increase production incrementally from 2025, reach approximately 2 million units volume increase by end of 2027. We will also expand production at our manufacturing footprints in Mexico and Canada by enhancing productivity and fully utilizing existing equipment there.

In the area of high value-added tires, we will pursue a strategy of producing tires in Japan and winning in world markets, supplementing our global structure that supports local production for local sales, placing Japan at the core of our manufacturing. In other regions, we will also build country-specific strategies and take initiatives to turn changes into opportunities. In particular, in Japan, Thailand, and Indonesia where Bridgestone has high market share, we anticipate an influx of products in the low-end zone. In these markets, it is essential to more firmly protect our family channels. In addition to thorough premium focus and reinforcing Dan-Totsu products, which represent the “best” category of the Bridgestone brand, we will also strengthen products in the “better” and “good” segments of the brand. Moreover, we have built a resilient business foundation for the mining tire business in the U.S. The proportion of local production for local sales there is high, and the ratio of U.S. imports in global sales is low. Based on this foundation, we will continue to expand Bridgestone MASTERCORE tires, a Dan-Totsu product, and solutions, in pursuit of “growth with quality.”

In 2025, by maintaining a high sensitivity to changes and carrying through the initiatives what we have determined, as well as implementing measures to turn changes into opportunities, we will advance to the “true next stage” in 2026, evolving into a “strong Bridgestone” that can win even in a turbulent business environment.

Whatever the business environment is and will be, we aim to maximize our contributions to stakeholders including shareholders, customers, employees, partners and suppliers, local communities, and a sustainable society guided by our mission of “Serving Society with Superior Quality” and with the E8 Commitment as the axis of our value creation. Regarding our capital policy and the reinforcement of shareholder returns, we have begun efforts to enter the next stage in a Bridgestone way. To maintain financial soundness while improving capital efficiency, we will conduct share buybacks and promote stable and continuous increases in dividend amounts to achieve improved capital efficiency. For 2025, we anticipate an increase of 20 yen per share compared to 2024, bringing the expected dividend to 230 yen per share, with a consolidated payout ratio to rise to an industry-leading 50%.

For employees, we are raising the amount of talent investment per person and increasing compensation for high performers in a balanced manner, based on the global management KPI of enhancing talent creativity. We will also continue stepping up efforts to achieve carbon neutrality, realize a circular economy, and contribute to nature positivity, in a way that links with our business strategies. For the local communities we serve, we take initiatives to support mobility and solve the social issues they face. In green slow mobility, we are promoting AirFree, a next-generation tire that does not need air filling, by seeking co-creation with local governments. In the run up to our 100th anniversary, we are also taking on the challenge of supporting space exploration carrying the dreams of humankind, such as utilizing AirFree technology in lunar rover tires. The AirFree is a part of our exploratory business.

The 2025 Integrated Report outlines our initiatives for sustainable value creation and our ongoing efforts to turn changes into opportunities comprehensively. My hope is that, by clearly detailing the journey of Bridgestone’s transformation, this report will serve as an invitation for new value creation, allowing us to survive and achieve further growth together in this turbulent business environment.

Shuichi Ishibashi
Member of the Board
Global CEO and Representative Executive Officer
Bridgestone Corporation