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Chinese tire industry and development in times of hardship

According to the National Bureau of Statistics, from January to June, the national tire production was 454.775 million, down 3.9%. January to May, the industry's main business income of 219.36 billion yuan, down 0.8%; total profit of 12.26 billion yuan, down 14.4 percent.

 
August 24, China Rubber Industry Association Tire Branch Secretary Shi Yifeng told the media that the first half of this year, the domestic tire market demand continues to slump, seriously affecting the US "double reverse" case of export by the market prices decline, the industry average operating rate about 60 percent, down more than 10 percentage points. At present, the Chinese tire industry into an unprecedented predicament.
 
China Rubber Industry Association Tire Branch of the latest statistics from the industry 44 key enterprises: This year 1–6 months, tire production fell 6.17%, the main business sales fell by 13.6%, export value decreased by 10%, while inventories rose 4.7%.
 
Shi said that this situation causes a lot of industry, both affect the country's macroeconomic situation, there are long-term accumulation of the tire industry overcapacity, low-tech problems, including the US "double reverse" case, natural rubber imports by limits and other shocks.
 
Deputy Director of Investment and Development Department Double Coin Holdings Ltd. Zhang Song believes that barriers to entry, low investment costs; and some local governments for the sake of performance, ignoring the market capacity, blindly pushing tire capacity expansion, leading to serious excess capacity. Plus technical content is not high, the lack of economies of scale and other factors, tire decline in corporate profits.
 
At present, China only medium-sized enterprises have more than 300 tire, non-standard, unregistered small businesses more, industry production capacity far exceeds demand. In all-steel truck radial tire, for example, at present, the annual production capacity of around 130 million, but the market demand is just over 8000 million.
 
Not high-tech products is one of the reasons decline in tire sales. According to statistics, at present, the domestic production of cars and light truck radial tire radial tire, approximately 65% ​​of the low-end products. Due to technical content is not high, the Chinese tire products is difficult to enter the international market, even out of the country it is difficult to compete with other international brands market share. At the same time, many foreign tire manufacturers but have set up factories in China, and further erode the domestic market.
 
Shi Yifeng told the media that the US passenger car and light truck tires in China, "double reverse" case has the final ruling, this "dual" case enormous impact on the industry.
 
According to customs statistics, from January to May this year, tire exports fell 25.7%, export value fell 34.6 percent, of which exports of motor cars to the United States decreased 61.4 percent with the new inflatable rubber tires, total exports to the US of the product concerned 15% of exports. In addition, the country started a composite rubber new standards, but also to the negative impact of economic operation.
 
However, the tire industry, there are still some positive factors. Hangzhou Zhongce Rubber Group Co., Ltd. Chairman Chen Jinrong that, at present, the domestic tire industry blind investment, redundant construction momentum has been checked, product structural surplus has been effectively alleviated. The second quarter of this year, the industry main economic indicators fell significantly narrowed in the first quarter, it is the best example.
 
Chen Jinrong said grab "along the way" strategic opportunities in Enhancing transformation and upgrading, on the basis of energy saving internal strength, the strength of enterprises Baotuan "going out", is the only way out of trouble tire companies.
 
First overseas subsidiary entities Zhongce Rubber Group – Hangzhou Zhongce Rubber (Thailand) Co., Ltd. has been officially put into operation, the main production of semi-steel radial tires, to the end of 2015, could reach five million of production scale.
 
Chen Jinrong said that factories in Thailand that will help local resource advantages, direct services to the Southeast Asian market, but also help to avoid the United States and other markets may be imposed "dual" tariff.
 
It is understood that the game round Jinyu, Linglong Group has been set up factories abroad.
 
Zhang Song told the media that the first half of 2015, both the tire manufacturers, distributors or end retailers, almost everyone is talking about the tire in the tire industry electricity supplier, and quickly converted to actively explore the wait. However, at present, the ratio of net purchases of domestic tire only about 1.5%.
 
Zhang Song believes that the current tire products online shopping is also limited to a small child. With the rise and rapid development of the electricity supplier tire range of options and the total amount of online users will increase. Tire manufacturers, a move that could reduce the sales team and channel construction costs and through customization of products and achieve more than the whole production from the transition to large-scale production, improve production efficiency. By then, the cost of logistics will significantly reduce intermediate links, to maximize the profit sharing to end consumers, which helps to expand tire sales, promoting and stimulating the production of tires.

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