Chinese Market to be 30% of Cooper Sales

Reports indicate Cooper Tire & Rubber wishes to increase the share of its global sales generated in China from 25 to 30 per cent in the next three years. "That's our minimum target,” said Allen Tsaur, general manager for Cooper Tire's Asia operations during an interview with Reuters. “The Chinese domestic market is explosive and the pie is expanding. We have to grow fast to keep up the pace.”

Cooper Tire’s sales in China are estimated to exceed US$600 million this year, up as much as 20 per cent from 2008, Tsaur told Reuters. Hopes are for 20 to 25 per cent growth in 2010. Although the pace of growth in China’s automotive market is expected to slow following this year’s 40 per cent rise in sales, the general manager expects sales to remain strong. Tsaur also expressed optimism about the replacement tyre market’s prospects.

Cooper’s two China factories have a combined annual production capacity of eleven million units, and according to Tsaur an additional million units will be added to passenger car tyre capacity in 2010. “We are restrained by capacity, otherwise we could have grown much faster this year,” he said. Any immediate increases in capacity will occur at existing plants rather than through the building of a greenfield facility, he added.

At present Cooper exports 45 per cent of its China production, yet Tsaur anticipates this ratio declining to 35 to 40 per cent within three years, primarily because demand in the Chinese market is so healthy. Due to US tariffs on consumer tyres, exports to the US would be halved as of the second quarter of 2010. The unutilised tyres will be redirected to other export markets.