Triangle plans to open a factory outside of China

Corrado Molina, the general manager of the European branch of Triangle, one of the largest Chinese tire manufacturers, in an interview with Pneus News, spoke about the company's plans for building a new plant and his opinion on special tires for electric cars.

Will Triangle open a plant outside of China?

After abandoning the project in the US [the company intended to build a $580 million plant in the country, but eventually abandoned these plans], we began to think about creating a new production site that would provide us with development in the future. Having our own plant outside of China - as we hope, in Europe - would allow us to be closer to consumers and at the same time have access to new commercial opportunities. For example, we could eliminate the impact of anti-dumping duties, which [in Europe] are still in effect on the truck tire market. A plant in the region would also allow us to mitigate the effect of sharp fluctuations in sea freight costs, which has become a very important factor nowadays.

Since 2023, demand for our products has grown significantly, and our capacity is no longer sufficient, which is an additional incentive for their expansion. We are not only talking about increasing sales, but also about improving the positioning of the brand and continuing to work on improving the quality of products.

Will a plant outside of China open up new opportunities in the original equipment (OE) sector?

Currently, we work with car manufacturers only in China and have not yet approached the point of entering this segment in the global market. Having our own production near European car factories would, of course, help us take our place in this sector. In fact, this can be done quite quickly, definitely before the launch of the new plant, and not only on the continent, but also globally.

So will the new plant be located in Europe? Are you directly involved in choosing a location?

As the head of our European branch since 2017, and also thanks to my many years of professional experience, I personally participate in making strategic decisions and, obviously, am one of the initiators of the idea of opening a plant in Europe. However, choosing a location requires a large-scale study of geographical alternatives. We have a decision-making process that may take longer than that of other Chinese companies that have already begun their expansion, but I am confident that we know how to quickly implement projects, that is, when and if we announce the construction of a plant, which usually takes about three years, we will definitely be able to meet the deadlines. I am optimistic and believe that after making a decision, we will act quickly and efficiently. The idea is clear, the project has been launched, and we have a shortlist of countries where production can be localized. The list of possible alternatives, of course, includes Eastern Europe, which remains a very attractive region for tire manufacturers, as there is an opportunity to establish partnerships with significant automotive brands.

What do you say about the development of the electric vehicle market?

The European Commission, under pressure from local car manufacturers, has already launched an anti-dumping investigation, which may result in new duties on imports of Chinese cars [a decision has been made, and the size of additional duties on electric cars from China will be up to 48%], but I still believe that this is the wrong approach.

Here in Europe, instead of focusing on improving quality, competitiveness, and cost-effectiveness, we are building new barriers, continuing to be inefficient, and closing factories. The consequence of such a strategy will be that the Chinese, instead of exporting products to Europe, will make direct investments, building new, much more efficient factories, putting the future of historic European enterprises and brands at serious risk.

In my opinion, the best solution would be to implement innovations, increase efficiency and productivity, improve competitiveness, possibly even cooperate through joint ventures, and thus manage globalization, the main role in which China plays today and which cannot be stopped with the help of trade barriers. The reason is also that the quality of Chinese cars, high-precision mechanical equipment, electronics, technologies, and goods in general has significantly improved, and along with it, the willingness of consumers to buy them.

Now, the cost of cars continues to rise rapidly, but if even Tesla has realized that in order to compete with Chinese competitors in the current situation, it is necessary to lower prices, then European manufacturers will also have to do the same, forget about oligopoly, and implement innovations to remain competitive.

What is currently happening in the tire market?

In recent years, there has been a noticeable decline in the share of premium products and an increase in demand for mid-range and budget tires, and this trend, as we believe, will continue. Although the mid-price segment is the main alternative for those who previously bought premium tires but are looking for more affordable options, the demand for budget brands has also increased significantly. Since last year, the demand for economy-class tires has grown so significantly due to the decline in demand for "premium" that not a single manufacturer had enough capacity to respond adequately.

Premium brands are losing market share, and this is evident from their performance. Premium-level brands and manufacturers are in crisis because they do not want to adapt to how the economy is developing around the world. Here, little can be done: the Chinese are more competitive, they have newer and more efficient factories with less labor-intensive processes - thanks to a high level of automation. Either you invest to maintain competitiveness, or you are doomed to lose, and it would be wrong to blame more far-sighted Chinese entrepreneurs for this. At the same time, labor costs in China, Thailand, or Vietnam are not much lower than in some Eastern European countries. To this should be added the costs of delivering products, which today have a particularly high value. All this makes the total production delays in various geographical regions comparable at the same level of automation.

Does Triangle plan, like other companies, to release special tires for electric cars?

We have tire design technologies that meet the specific requirements of this segment, but currently, we do not have production capacities that could be used to produce such products. Moreover, traditional-type cars are still the most popular on the market, so we decided to focus on our core business. At the same time, some of our tires are available in versions adapted for use on electric cars, that is, they can be used on electric vehicles, but they were not created specifically for them.

My opinion on tires for electric cars that can reduce energy consumption, improve acoustic comfort, and at the same time have acceptable durability, despite the increased weight and higher torque of electric vehicles, is that combining all these qualities inevitably implies compromises that affect safety. The issue of price is also important, as the production costs of such tires are naturally higher. And today, the market clearly does not need a further increase in prices.