Joint Venture To Manufacture And Market Car Radials In China

The Chinese Government has given its approval to a new joint venture to manufacture and market radial passenger car tyres in China. The jv company will be established in January next year, with manufacturing beginning in April 2003. Initially, annual production will be 750,000 tyres, but a second stage of development will increase this figure to up to 1.

5 million tyres a year. The exact timing, and numbers of tyres to be produced, will depend on market demand and the two stages will require an investment of $30 million each, or $60 million in total. The new company has been provisionally called the Hangzhou Yokohama Tire Co.

Ltd. and has been formed by the Yokohama Rubber Co., Chinese manufacturer Hangzhou Rubber (Group) Co.

and YHI Holdings Pte. Ltd. of Singapore.

Hangzhou Rubber is one of China’s largest tyre manufacturers, while YHI Holdings is a company that has been selling Yokohama tyres in Singapore since 1973 and, after that, elsewhere in Asia including China. The total paid-in capital of the new company will be $12 million. Production at the new company will use a small-lot production system being developed by Yokohama and which features a compact production line, producing tyres the equal of those made in Japan.

The scale of the investment is smaller, compared to a large-scale tyre plant. Yokohama Rubber says that it plans to establish several similar plants in China in the future to meet anticipated local demand. Tyres produced by the new plant will be aimed at the Chinese replacement market “for the time being”, but this does not exclude the possibility of entering the Chinese OE market in the future.