Yokohama planning China tire plants


China's industrial east coast, epitomized by Shanghai, is drawing manufacturers such as Yokohama Rubber

By Alex Frew McMillan

HONG KONG, China (CNN) -- Yokohama Rubber Co. is considering building three new tire plants in China, the company said on Monday.

"We are studying three plants in China," spokesman Hisadake Kinoshita told CNN. "We are planning, and have subject to established plans, some plants in China."

Tokyo-based Yokohama Rubber was responding to a report that it has already decided to build three new passenger-tire plants to serve the Chinese market.

According to the Nihon Keizai Shimbun, Yokohama Rubber will spend $30 million (3.7 billion yen) on each of the three factories, which would each produce around 750,000 tires a year.

'Four plants by 2007'

Yokohama will build the three passenger-car tire factories, leaving it with four tire plants in China by 2007, the Nikkei stated on Monday. It cited unidentified company sources.

The plants would likely be in the cities of Tianjin, Guangzhou and Chongqing. Toyota Motor Corp. and Honda Motor Co., Japan's largest carmakers, plan to or already do make cars in those cities.

Yokohama is already building a tire factory in Hangzhou, China.

The company called the report an "observation" on plans that are still in flux. But the company declined to identify inaccuracies.

"It is not totally true," Kinoshita said. "We have not decided yet."

China would be a vital market for Yokohama to break away from rivals such as Bridgestone in Japan and Michelin of France.

Yokohama hopes to build to 8 percent of the Chinese market by 2010, the Nikkei states.

Stock up in morning trade

The Tokyo-based tire maker is Japan's second largest, specializing in high-performance tires. It had annual sales of around $3.0 billion for the 2001 year.

The company employs 13,600 worldwide. Besides passenger cars, it also makes tires for buses, trucks, airplanes and mining equipment.

Its stock is up 5.78 percent after the report, breaking for lunch on Monday at 348 yen. That's on a day the Nikkei index is up 0.64 percent at 12,052.87.