TOKYO -- Yokohama Rubber will build a factory in India for construction and heavy equipment tires, bolstering its specialty lineup in response to the price war in the automotive realm.
The $165 million facility is slated to start production in spring 2023, and have a daily production capacity of 55 tons, according to a Friday statement. This will be the Tokyo-based tire maker's first new facility since a U.S. plant opened in 2015 in the state of Mississippi.
Yokohama Rubber has been making inroads into off-highway tires in recent years, acquiring the Alliance Tire Group, a top Dutch player in the field, in 2016.
The new plant will be its third in India and eighth worldwide that produces tires for construction and heavy equipment, and will take the company's total daily capacity to 480 tons.
Tire makers face increasing pressure to cut prices for automotive products as newcomers from emerging countries gain ground. Yokohama Rubber is relying more on tires designed for heavy equipment to drive its earnings, since there is less competition in the field.
Off-highway tires made up roughly 10% of Yokohama Rubber's sales revenue and 20% of profit in 2019. The company plans to continue boosting its capacity to tap demand in the U.S. and Asia.