Local Tire Industry: Endogenous Power to Extend
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Due to the low labor cost and rapid market development, the global tire manufacturing industry has apparently shifted to the Asia-Pacific region. In particular, China now has the world’s second-largest auto market. International tire manufacturers are even treating China as a military The battleground, and many tire brands in China can only maintain half of the country.
With the rapid development of China’s auto market, currently there are only a dozen state-owned and state-controlled enterprises in China’s tire market. Foreign-invested and foreign-invested holding companies have included the three giants of France Michelin, Bridgestone Japan, and Goodyear USA. More than 20 companies in the company account for about one-tenth of domestic tire companies. However, currently the top 10 international brand tire manufacturers account for nearly half of the total domestic tire production, 80% of China's tire market is monopolized by foreign tire companies, and multinational companies occupy an absolute dominant position in the car tire market.
Thanks to its brand, technology, and capital advantages, multinational corporations quickly took up high-end tire consumer markets such as cars, light truck radial tire markets, and high-grade radial tires, which have higher profit margins. Only Michelin’s share of the market reached 20%. , And a large number of tire companies in China can only enter the low-end tire consumer market, such as trucks, agricultural vehicles and other low profit margins, in the domestic competition in a clear disadvantage.
In the first half of 2011, Michelin executives stated that China will become the company’s major investment market in the next three years. The company plans to expand its production capacity in China and continue to increase its research and development capabilities in China. In the second half of 2011, the construction of Bridgestone's third phase plant in Wuxi was completed and put into production. In December, its tyres with run-flat tires were formally put into operation. This is also the first production line for tires that can run dry in China. Up to now, Bridgestone’s four major brands under the passenger vehicle use product system in China have been launched in China, such as “Better Tianzu, Tairan, Power Man, and Green Songâ€. It is not difficult to infer the weight of the Chinese market in the Bridgestone Group strategy.
At present, there are many difficulties in China's tire industry, such as the rapid expansion of production capacity, the disorderly competition in the industry, the problem of excessive surplus, and the rising price of raw materials. Moreover, our local brands lack competitiveness and there is a big gap compared with foreign brands. The first is the poor performance of the product, followed by the lack of creativity in brand positioning. Although the “double reverse case†won by the United States, the development model of the Chinese tire industry relying on low labor costs, low production factor costs and high energy consumption and high pollution has not changed. According to relevant data, China's annual tire production reached 420 million sets, accounting for 1/3 of the world's total tire production. It is reported that by 2015, China's tire production will increase to 570 million sets. However, Chinese-made tires only account for 1.2% of the US market, while US-made tires account for 74.9% of the US market.
If the national brand of our country wants to “recover lost landâ€, the road to go is still very long. Some people in the industry think that we should proceed from the following points: R & D use natural rubber substitutes, reduce the increase in costs caused by the import of raw materials; actively develop a diversified market, reduce the risk of over-single formation of the export market; strengthen the tire manufacturing enterprise specification and management, Improve entry barriers, reduce blind investment and expansion, increase industrial concentration, adjust industrial structure, increase investment in science and technology, and optimize product structure changes, so that China's tires will change from quantity-based to technology-based and profit-oriented, and reduce the risk of trade friction.