China is increasing its tire exports
According to data from China's General Administration of Customs, in January-November 2024, the export volume of domestically produced rubber tires reached 8.51 million tons, up 4.8% year-on-year, and the value of the delivered tires increased by 5% to 149.9 billion yuan (20.54 billion dollars).
"The growth in exports reflects the continuous improvement in the competitiveness of Chinese tires in the global market," said Liu Kun, an expert from the Institute of Finance at Jinan University, adding that "the development of the supply chain in the domestic automotive industry leads to an improvement in the quality of tire products, and besides, the price advantage of Chinese tires is quite obvious, as a result of which more and more consumers on the international level prefer them."
According to the results of the first 11 months of 2024, the export volumes of new pneumatic rubber tires from China reached 8.22 million tons, an increase of 4.6% compared to the same period last year. The value of exports increased by 5% to 144.4 billion yuan (19.8 billion dollars), and 620 million tires were delivered, which is 10.1% more than a year earlier. In November, 770,000 tons of tires were exported (an increase of 1.5%), of which 750,000 tons were new pneumatic rubber tires (+1.4%).
"The main sales markets for Chinese tires are Europe, the Middle East, and North America," said Zhu Zhivai, an analyst at Shandong Longzhong Information Technology. "In recent years, demand in these regions has continued to grow, mainly due to the high quality and economic attractiveness of tires from China. This is especially noticeable in Europe, where foreign brand tires often become more expensive due to inflation."
According to Liu, the continuous implementation of innovations and the overall technological progress of the Chinese tire industry are also important factors contributing to the growth of exports. Thus, Shandong Linglong Tire supplies tires to more than 60 automakers around the world and continues to increase its market share, and Jiangsu General Science Technology "has become popular in foreign markets due to its high-quality winter tires, which have allowed the company to increase sales in such markets as Russia, Asia, and Northern Europe".
Liu also added that although the benefits of Chinese tires are recognized in many foreign markets, exporters still face certain challenges. "Many countries consistently initiate [anti-dumping] investigations against Chinese tires, which, in combination with significant fluctuations in transportation costs and other factors, can affect exports," he said.
Since additional duties are imposed on the import of Chinese tires in many regions of the world, more and more local companies are building factories in other countries. For example, Shandong Huasheng Rubber and Pakistani Ghandhara Tyre & Rubber (GTR) recently signed a memorandum of understanding regarding the possible creation of a joint venture for the production of tires for passenger and commercial vehicles.
Other Chinese tire companies are also working on localizing production abroad. In 2024, ZC Rubber and Sailun began building factories in Mexico, and Linglong plans to invest 4.621 billion yuan (630 million dollars) in expanding its production complex in Serbia. As recently reported by Linglong, by the end of the third quarter of this year, the Serbian factory has become profitable, and its profitability continues to improve.
Zhu notes that tire companies build factories abroad not only due to trade barriers but also to be closer to sources of raw materials and consumers to reduce costs. "Previously, domestic tire companies focused on building factories in Southeast Asia, where natural rubber is produced, and local tires are not subject to additional duties when supplied to the US," he explained. "At the same time, in recent years, companies have begun to place enterprises in countries such as Mexico, Serbia, and Morocco, which facilitates supplies to Europe and North America and is also related to overcoming trade barriers."
Photo: Xinhua.