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In the export situation, due to the deterioration of the special security case, Chinese tires relied on the strong demand of the domestic market to tide over the difficulties of 2009. But even if it is a "life-saving straw," it is now facing the international tire giants "grabbing force."
The reporter learned that tires including Michelin and Bridgestone, among others, are still investing more in China, and have not slowed down even after the tire special security case.
In an interview with a reporter, the deputy general manager of a tire company in Shandong said that “the booming Chinese market in 2009 has made foreign companies more confident in expanding, but this will lead to further intensification of competition in the domestic market.â€
"Pulse to force around"
A person from the China Rubber Association believes that “expansion is one of the focuses of the foreign-invested tire company's development strategy in China in recent years, and it has not changed even after the financial crisis.â€
Among them, the pace of expansion of tire manufacturers in Europe and the United States has not fallen behind.
As the world's second-largest tire manufacturer, Michelin announced in early January 2010 that it will invest US$1 billion in the construction of a passenger and truck tire factory in Shenyang, China. The plant is scheduled to start production in 2012.
On February 2, 2010, Michelin received another 170 million yuan in shares held by other shareholders of Shanghai Michelin Warriors, and fully received Palmer Michelin Warriors.
Although the German mainland company arrived at the latest, it was a big shot. A project with a total investment of 600 million euros in Continental Tire was officially started at the end of September 2009. The annual production capacity is 16 million passenger tires and 2 million commercial tires.
Japanese tire manufacturers even collectively attacked. A statistical data shows that in 2009, about 80% of Japan’s rubber companies’ investment in emerging countries was in China.
Since entering China in 1999, Bridgestone has successively deployed Shenyang, Tianjin, Wuxi, and Huizhou. In 2009, Bridgestone added a total of US$98 million to its Wuxi plant. It plans to expand production in July 2011 and expand production capacity from 8,000 to 12,000.
Bridgestone (China) Investment Co., Ltd. Chairman Takeda Bundo said that the current expansion of the plant is under construction, but the pace of Bridgestone will not stop there.
Yokohama Tire will carry out the fourth phase expansion of the Hangzhou passenger car tire factory and plans to increase its annual production capacity from 3 million to 5.1 million. In addition, Toyo Tire & Rubber Company announced on January 28 that it will invest USD 9.8 million to establish a wholly-owned subsidiary in Zhangjiagang, Jiangsu Province, China to produce passenger cars and light truck tires.
The “forced siege†of the powers in the Chinese market will further squeeze the market space of domestic tire manufacturers.
Previously, the China Automobile Industry Association also used customs data that due to the obstruction in the major export markets, a large number of domestic products could not be digested within a short period of time. China's tire industry will face 10% to 15% of excess capacity.
According to the above-mentioned deputy general manager of Shandong Tire Co., “Compared with foreign-funded companies, the tire products of local companies are mainly for the low-end market, and the competition is very cruel.â€
Helping the "straw"
Tire powers staged a "grab force" due to the strong demand in the Chinese market in recent years. In particular, in 2009, China's auto sales reached 13.65 million vehicles, ranking the world's largest auto market. With this change, the Chinese tire market also achieved a round of blowout prices last year.
At the same time, a huge future tire market is already brewing.
Securities analyst Chen Aihua told reporters, "First of all, the number of motor vehicles reached 186 million in 2009, of which 76.19 million were automobiles. This figure means that the future tire industry maintenance market is huge. Second, China is currently the largest automotive country, from the car. According to the forecast of demand growth, the growth rate of 15%-20% can be maintained in the next two years. With the increase in car ownership, the replacement tire market will be further increased.â€
Chen Aihua’s judgment coincides with the opinion of Kuang Si Li, general manager of Cooper Tire China.
In his interview with the media, Si Sili said: “China’s replacement tire market is one-fifth that of the United States. I believe that this gap will be halved in five years and it should be half of the US market. At present, there are 280 million US markets. China is 55 million, and I still return to see the growth rate of the Chinese market two years ago. Normally, it should be between 20% and 25%. This is an inevitable phenomenon. Taking into account the safety reasons, it is necessary to change tires after two years. ."
Takeda Buntjun said externally, “We predict that (China) tire market demand will increase significantly in the next few years, and the annual demand will maintain a 10% increase, so we also need to quickly adjust production capacity to meet market demand. â€
The purpose of establishing a wholly owned subsidiary of Toyo Tire is also here. Prior to this, Toyo Tire had established two joint venture tire factories with Taiwan Zhengxin Tire, but had decided to withdraw from it before establishing a wholly-owned factory.
Toyo Tire once said that due to the rapid growth in sales of automobiles, the demand for Chinese tire market has shown strong growth, which is the main driving force for its sole-funded construction in China.
At the same time, however, the demand in foreign markets is still shrinking.
In the past year, Michelin’s net profit fell 71% from the same period in 2008.
Michelin said in the announcement that due to revenue decline of 9.8% to 14.8 billion euros, 2009 net profit fell to 106 million euros. The reason for this result is the decline in demand from automakers and truck companies.
Obviously, in the current economic situation, China's tire market and overseas markets are already on ice.
On the other hand, compared with Chinese companies that rely too much on the domestic market, tire giants also have the advantage of global deployment of production capacity.
The deputy general manager of Shandong Tire Co., Ltd. stated that “the ability of foreign companies to globally dispose is not what Chinese companies currently have. Compared with Chinese companies, foreign companies have not been affected by many 'special protection cases'. Global production and marketing network, they can flexibly adjust the product's target market."
The reporter learned that Sumitomo Corporation immediately adjusted its export sequence after the United States to China’s tire protection program caused export restrictions. Sumitomo Changshu tire factory originally assumed the export orders to the United States were handed over to factories in Japan and Indonesia. The factory is responsible for orders from other countries and regions.
Informed sources also told reporters, "When responding to the investigation of China's tires against the two anti-two insurance, the attitude of foreign companies was not very positive."
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