Following Bridgestone Corp.’s announcement to build its first tire manufacturing plant in Russia located in the Zavolzhye Industrial Zone in Ulyanovsk Oblast news agency Russia Beyond the Headlines spoke to Yoshiaki Hiraishi, general director of Bridgestone Tire Manufacturing C.I.S. about the project and the behavior of Russian consumers. (The plant will be operated by BMCIS, a tire manufacturing company jointly established by Bridgestone and co-investor Mitsubishi Corp.)
A portion of the interview can be seen blow. To read the entire interview, click here.
RBTH: A number of Russian experts have suggested that Bridgestone’s decision to build a plant in Russia was dictated by its beginning to lose its share on the Russian market.
Hiraishi: Our approach differs somewhat from that of our competitors. It is a Japanese approach. The point is not how to sell as much as we can, but how to sell.
One of our aims is to increase our market share to almost double what it is now. But, speaking in terms of the near future, our goal is growth more than the overall market.
RBTH: What sorts of tires do you plan to produce at the new plant in Ulyanovsk?
Hiraishi: We would like buyers to have a wide choice. That is why we will produce both winter tires studded and not studded and summer tires at our plant.
RBTH: Do you plan to enter into agreements with automobile manufacturers in Russia to supply tires as part of the original equipment? Do you have such an agreement with Mitsubishi, the corporation with which Bridgestone is now building its plant in Russia?
Hiraishi: We do not have such an agreement with Mitsubishi. We are focusing primarily on the secondary market for “replacement tires.” But that does not mean that we are refusing to do business with automobile manufacturers.
RBTH: How does demand for automobile tires in Russia differ from demand in Japan?
Hiraishi: Thanks to the program for automobile utilization that the Russian government put in place last year, and thanks to the activity on the automobile manufacturers’ market, Russia’s motor-vehicle pool is rapidly changing.
There are more and more cars, and they are more and more expensive. This is why consumers are now taking more care in choosing tires and trying to find good, expensive tires for their good cars.
But, in Russia, this applies mainly to winter tires. In Japan, the situation is slightly different, because there the weather conditions are different. Snow and real winter affect only a few districts in Japan, therefore consumers pay more attention to their choice of summer, not winter, tires.
In the future we anticipate that Russian consumers will be as scrupulous in their choice of summer tires. But, in actual fact, there is little difference in the behavior of buyers.
RBTH: Why did you decide to build your plant in the Ulyanovsk region?
Hiraishi: We spent a lot of time choosing a region and a partner. There were over 100 locations where we could have begun building a plant. We had a list of specific criteria according to which we eventually settled on a region.
For example, we wanted a well-developed infrastructure, as well as a regional government that had experience in developing businesses with foreign companies.
In the final stage, when it came time to sign the agreement, it was important to understand how serious, open and friendly the attitude of the local administration was toward foreign companies how prepared it was to understand differences in, say, the Japanese and Russian mentalities.
The local administration in the Ulyanovsk region, for example, not only viewed this project from a business standpoint, but saw it as an exchange of cultural experience.