Reshaping the global tire industry's top three
When the first quarter financial report of 2025 was released, the global tire industry suddenly became tense - Goodyear built the last line of defense with sales of 30.729 billion yuan, while Germany's Continental reduced the gap to 2.9 billion yuan with heavy artillery firepower of 27.82 billion yuan.
Behind this seemingly calm set of figures, there is a three-year strategic stranglehold: the quarterly sales gap between the two sides collapsed from 7.3 billion in 2023 and 5.4 billion in 2024, a drop of 60%. At this moment, the Atlantic Trench under the throne of the top three tires in the world is setting off huge waves due to the struggle between the two giants.
In the first quarter of 2024, the sales gap between the two companies was 5.4 billion yuan;
In the first quarter of 2023, the sales gap between the two companies was 7.3 billion yuan.
As the sales gap gets smaller and smaller. Germany's Continental's vision of entering the top three in the world seems to have come to the countdown stage - in 2025, will the top three global tires that have been maintained for 15 years be reshaped?
Brand value, Continental surpasses Goodyear
In the latest "2025 Global Tire Brand Value and Strength Ranking", in the list of the most valuable tire brands, Continental surpassed Goodyear with a brand value of 3.9 billion yuan, ranking third in the world.
It can be seen that the continuous breakthrough in the supporting market and the comprehensive growth of the replacement market have made the brand reputation of Continental continue to rise. At the 2025 Shanghai Auto Show, Continental ranked third in the supporting list; at the 2024 Beijing Auto Show, Continental, Michelin and Pirelli took 55% of the supporting market.
In the replacement market, Continental has completed the online and offline interconnection in the Chinese market. Online, it launched the "Tire Delivery Immediate Installation" service; in offline stores, Continental launched a new user experience model "Immediate Worry-free", providing consumers with one-stop services from tire selection, purchase to use, covering the entire process of pre-sales, sales and after-sales.
At the same time, Continental also upgraded its after-sales service in 2024, providing a lifetime warranty for all products to further protect the rights and interests of car owners.
The dual upgrades of the supporting and replacement markets have also further won more market orders for Continental. This is why in the first quarter of 2025, Continental narrowed the sales gap with Goodyear to 2.9 billion-in the past three years, Continental has continuously narrowed the sales gap with Goodyear at a compound growth rate of 36%. In terms of profit, Continental has surpassed Goodyear for nearly three years.
Profits surpassed, Continental anchored the top three in the world
At the end of 2023, Goodyear, whose performance has been worrying, launched a transformation plan called "Goodyear Forward", which aims to significantly increase profit margins and reduce leverage to drive shareholders to create a lot of value. But in fact, in terms of operating profit, Continental has surpassed Goodyear in the first quarter of 2023.
Comparable operating profits are calculated in RMB, and Goodyear's in the first quarter of 2023 is RMB 883 million, in the first quarter of 2024 it is RMB 1.788 billion, and in the first quarter of 2025 it is RMB 709 million. Continental's operating profits in the same period were RMB 3.771 billion, RMB 3.158 billion, and RMB 3.744 billion, respectively, surpassing Goodyear for three consecutive years.
At the same time, it can be seen that Continental's tire profits in the first quarter of 2025 are on an upward trend, while Goodyear's in the first quarter have declined. Not only in terms of profits, but also in terms of sales, the trend has been almost consistent. From 2023 to 2025, Goodyear's sales in the first quarter were RMB 35.7 billion, RMB 32.4 billion, and RMB 30.7 billion, respectively, and they have declined in the first quarter for three consecutive years.
During the same period, Continental's tire business sales were RMB 28.3 billion, RMB 26.9 billion and RMB 7.8 billion, respectively. Although sales in the first quarter of 2024 declined due to sales, sales began to pick up this year thanks to the recovery of the global replacement market.
In terms of net profit, Goodyear suffered a loss of RMB 700 million in the first quarter of 2023 due to the damage caused by a tornado to one of its factories in the United States. In the first quarter of 2025, Goodyear achieved its first "positive" net profit in nearly three years by selling its business and other means, achieving a profit of RMB 800 million.
This also explains why Goodyear's development strategy at the end of 2023 was "reversed" from that in 2021 - in 2021, Goodyear expanded its scale by acquiring Cooper Tire. In 2023, after experiencing a sharp decline in profits, Goodyear redefined development as the recovery and increase of profits.
As one of the few tire companies in the United States (the only tire companies that can be named in the United States are Goodyear and Titan International), Goodyear must ensure future development stability by increasing profits.
The first quarter report shows that with the help of the transformation plan, Goodyear's department revenue will benefit by $480 million in 2024. By 2025, the plan will bring Goodyear $750 million in departmental operating income; in the first quarter of 2025, the plan has brought Goodyear $200 million in revenue.
At the same time, under the implementation of the transformation plan, Goodyear's annualized operating rate target increased from $1.3 billion to $1.5 billion in the third quarter of 2024. At the beginning of 2025, Goodyear completed the sale of its off-road tire business and the sale of the Dunlop brand, increasing total revenue by approximately RMB 11.6 billion.
Although the sale of the business has brought Goodyear higher profits in the short term, it has also "consumed" future revenue scale. This is why it is speculated that Continental's tire sales will rank among the top three in the world in 2025. The reason is simple. Continental has been making rapid progress through expansion of production and channel expansion.
Germany's Continental expands aggressively
In 2024, Continental expanded its tire production capacity in both Sri Lanka and Thailand. Among them, the total investment in the tire factory in Rayong Province, Thailand is as high as 13.4 billion baht, which is used to increase the annual production capacity of 3 million high-performance radial tires.
The tire factory, which cost 1 billion euros (about 7.867 billion yuan) to be deployed in Anhui, is expected to achieve its annual production capacity of 18 million passenger car tires and light truck tires in its fourth phase by 2027. This rapid progress in production capacity alone is inseparable from the strong support of its parent company Continental.
From 2024 to 2025, Continental announced two major events about its corporate restructuring. The first was that on August 5, 2024, Continental officially launched the divestiture of its automotive division. In less than 8 months, Continental announced the second major restructuring event: on April 8, 2025, Continental announced that it would sell its ContiTech business.
Nicola Sezer, CEO of Continental, said: "We are building three strong independent companies that will achieve full growth and value creation potential as independent companies." If the plan goes well, with the independence of ContiTech in 2026, Continental will focus only on its tire business. Many industry insiders think that Continental's reorganization is very bold, but looking through the financial reports in recent years, it can be found that the tire business has become Continental's most important profit department.
In the fourth quarter of 2024, the tire business accounted for 35% of Continental's revenue and 53% of its profits. Thanks to a profit margin of 13.9% (the profit margins of automobiles and ContiTech are only 6.6% and 7.8%), tires are the main support for Continental's profitability. In the first quarter of 2025, the tire business still accounted for 35% of Continental's revenue, but the profit accounted for 72%.
The profit margin of the tire business in the first quarter was 13.4%, while the profit margins of automobiles and ContiTech fell to 1.6% and 5.4% respectively from the previous month. The tire business is still the most profitable department of Continental.
This also shows from the side that Continental Group attaches more importance to profitability while expanding its scale. At present, Continental's tire business is expanding and optimizing in parallel. Like Goodyear, Continental has also closed factories with poor profitability (coincidentally, the two tire companies announced the closure of their Malaysian factories in 2024 and 2025 respectively).
In addition, Continental also announced plans to withdraw from the agricultural tire business. However, it is different from Goodyear's decision to completely sell its off-road tire business. Continental has only suspended the production of agricultural tires, and the production and sales of tires in the fields of material handling, earthworks and port operations continue. In fact, agricultural tires are not optimistic in the "ratings" of both Goodyear and Continental tire companies.
In the first quarter of 2025, if the off-road tire business is not counted, Goodyear's operating profit can even rise by one liter. But it is not completely "set in stone" to say that Continental will definitely surpass Goodyear in 2025. At least in the field of passenger car tires, both companies are working hard to make themselves more profitable and more "weighty".
The battle for the passenger car tire market has begun
"Focus on tires, especially passenger car tires and truck and bus tires." This is the current common goal of the two tire companies.
Continental's passenger car tire production capacity and supporting business layout in Asia have been mentioned above. Goodyear has also made many investments in its passenger car tire business.
Goodyear's Lawton plant in Oklahoma received an investment of US$320 million, focusing on the production of "high-end tires"; Goodyear also invested 575 million Canadian dollars in its Napanee plant in Ontario, Canada to increase the production capacity of electric vehicle tires and all-terrain tires; Goodyear's Kunshan plant in China also invested US$200 million to meet China's growing demand for high-value tires.
Passenger car tires are becoming a key development track for Goodyear. At the same time, Goodyear began to re-plan its Cooper Tire, which it acquired in 2021. We saw Cooper Tire's matching in BYD's co-branded car this year. It can be said that although it focuses on profit growth, Goodyear has not given up further market expansion.
The top three tires in the world are reshaped
When well-known tire brands such as BFGoodrich, General, Firestone, and Atlas were successively acquired by European, Japanese, and Chinese tire companies, Goodyear became the only two well-known American tire companies still active in the global tire market. It has remained in the top three in the world in decades of blood and rain, and its strength cannot be underestimated.
Goodyear is still a strong rival of Continental. In 2025, can Continental surpass this strong rival and reshape the top three tires in the world? Let's wait and see!
