The 18th China International
TIRE EXPO 2022
12-14 December 2022
Shanghai China
Media and Publication > Media Centre

Will your suppliers survive in 2021?

As the tire industry in China is getting more mature, consolidation is expected. Even we see strong global tire demands from the post-covid world. The Chinese tire industry is still moving forward in the next round of consolidation

Shandong Province, where most of the Chinese tire makers are located, issued a notice on the implementation of the "Three Resolutions" Action Plan (2021-2022). The three resolutions are 1) eliminate obsolete production capacities, 2) further adapt intelligent manufacturing, and 3) groom global top players among major industries.

By 2022, all factories with an annual output of 1.2 million or less and semi-steel tires with an annual output of less than 5 million will be integrated or exited. According to the government document, the province’s new round of tire production exits involves 18 companies. Among them, there are 8 all-steel tire companies with a total production capacity of 5.56 million; There are 10 semi-steel tire companies with a total production capacity of 25.61 million.

China's existing production capacity of all-steel tires is 183 million, and that of semi-steel tires is 647 million. This round of production capacity reduction accounted for 3.96% of the country’s existing semi-steel tire production capacity and 3.03% of the full-steel tire production capacity respectively. However, bigger players may increase production at the same time depends on strategy, so overall production numbers may actually increase as China wants to groom more “top players” in the global tire company ranking while closing the smaller ones.

The Guangrao County Government also started another policy to promote the IPO listing of tire enterprises. It will provide consulting services to help enterprises to build brands, formulate long-term strategies, and develop financial systems in order to achieve a public listing. Moreover, for each enterprise that is successfully listed on the Shanghai and Shenzhen stock exchanges, it will be rewarded with a lump sum of 10 million yuan (around 1.5M USD). If it is successfully listed overseas, the county finances will be rewarded a one-off 6 million yuan (around 925K USA). The main goal here is to leverage the stock market to pick the winners and also use the capital market to help companies become bigger “top players.” Prinx Chengshan was successfully listed on Hong Kong Stock Exchange in 2018.

So as a global tire trader, just following the lower prices with unknown manufacturers may not be a wise strategy in the future. You should be more knowledgeable and have more connections with strong Chinese manufacturers. There are some great manufacturers in Shandong Province including Sailun (Qingdao), Sentury (Qingdao), Double Star (Qingdao), Linglong (Yantai), Triangle (Weihai), and Prinx Chengshan (Weihai). The market value of Linglong Tire, a large listed tire company, has always ranked first among domestic listed tire companies. You can see more ranking information in my previous article.

We have launched a website to help importers to connect with credible tire and wheel manufacturers: http://direct.citexpo.com.cn/. If you have any questions or comments, please chat with us on Facebook, LinkedIn or email us.

CITEXPO Direct link: http://www.citexpo.com.cn/en/citexpo_direct.php

 

For further information, please visit the official website at http://www.citexpo.com.cn or email: citexpo@reliable.org.cn / Tel.:+86(0)10-8589-8181

Reliable International Exhibition Services Co., Ltd. &
Topic International Exhibition Services Co., Ltd. All rights reserved.
京公网安备 11010502042914号,京ICP备19031008号-3