Research Report on Chinese Tire Industry, 2011-2012China Research and Intelligence Co., Ltd.July 4, 2011 SKU: CRIC6434374 |
| Countries covered: China It took three months for China Research and Intelligence to complete this report. When China Research and Intelligence wrote Research Report on Chinese Tire Industry (2008 version), the international financial crisis had exerted no obvious impact on Chinese tire industry yet, and the industry was at a low ebb when Research Report on Chinese Tire Industry (2009 version) was written. Fortunately, in 2010, driven by domestic demand, Chinese tire industry began to recover gradually. In 2009, Chinese tire export amount dropped by 4.70% YOY, while in 2010 Chinese tire import amount rose by 35.20% YOY, reaching USD 10.39 billion. In 2010, tire output of Chinese rubber tires reached 776.34 million, rising by 19.82% over 2009. In 2010, Chinese bias tire output basically leveled off over 2009, and radial rate of automobile tires further rose. Though China has become the world’s largest new automobile market since 2009, the number of automobile ownership per capita in China is still small. In 2010, automobile reserves per 1,000 people in China were less than 70, far lagging behind the level of 600-800 automobiles per 1,000 people in developed countries. It is estimated that Chinese automobile market will maintain the annual growth rate of over 15% in the next few years, and the annual growth rate of Chinese tire market will exceed 20% with increasing Chinese automobile reserves. In Chinese automobile tire market, demand for replacement tires is about twice that for supporting tires in the maintenance market, accounting for over 2/3 of the entire tire market. It is forecasted that China will turn into the world’s largest tire market in the near future. International tire giants have begun to enter China in succession since the 1990s. Attracted by Chinese cheap production cost, multinational tire enterprises mostly regard China as one of their production bases around the world. Such advantages as huge market demand and low cost in China greatly appeal to tire investment in the world. Currently, over a half of Chinese tire market has been occupied by foreign-funded enterprises. Besides, foreign-funded enterprises firmly dominate Chinese high-end market, and their profit rate is generally twice or even more than that of Chinese domestic enterprises. In China, international tire giants possess huge advantages, while most domestic enterprises have small scale and weak strength. According to incomplete statistics of China research and Intelligence, by the end of 2010, there had been over 400 Chinese tire manufacturers. In the next 3-5 years, Chinese tire industry is predicted to accelerate M&A, and many small and medium-sized enterprises will fade away, i.e., these enterprises will either be acquired by advantageous enterprises or go bankrupt. In 2010, under the situation of export increase, profits of Chinese tire enterprises were unfavorable, however. Since prices of raw materials such as natural rubber repeatedly hit record high and labor cost increased in 2010-2011, production costs of Chinese tire enterprises have ascended by over 30%, which is higher than the growth rate of tire prices, leading to a substantial decline in benefits of tire enterprises. Influence of the Case of the U.S. Special Protectionism Tariff on Tires from China in 2009 is ongoing now. Entire tire export enjoys a growth mainly due to the transfer of the market, but also arouses chain reactions in other regional markets, causing that other countries take restrictive measures on Chinese tire export. Foreign countries have stricter requirements for technology, quality and safety of tires, among which EU Tire Safety Regulation and Labeling Law are two major regulations, and the U.S.A. and Japan also launch similar regulations, which now bring about huge pressure on general tires with large export volume. As China has basically possessed complete upstream and downstream in the tire industry chain and relatively cheap energy and price of labor force, Chinese tire industry still owns huge advantages relative to some other developing countries in recent years, and sees a gradual growth in export in the next few years. Aiming to maintain long-term and stable development, Chinese tire industry must change its development pattern, i.e. transferring from export-oriented pattern to domestic demand-led pattern. Through this report, more following information can be acquired:
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