China’s tyre industry under the wave of infections

With the relaxation of epidemic prevention and control policies, China has experienced a large-scale infection wave since early December. Many tyre factories have experienced or are experiencing worker shortages. The Lunar New Year in China is likely to see hundreds of millions of people to move around the country, leading to a more rapid spread of Covid-19. It is difficult to predict when China will shake off the epidemic’s impact; for the Chinese tyre industry, the current wave of infections is both a challenge and an opportunity.

Shortage of workers affected business

Several tyre manufacturers are facing widespread staff shortages through illness. In mid-December, Chaoyang Long March blamed the rapid spread of the virus for its production and operational difficulties: “With the rapid rise in the infection rate, the shortage of workers has become a problem, and the company is facing a sharp reduction in production. It is a pity that hard-won orders were lost due to delivery delays.” The tyre maker is asking employees to self-assess their health if they become infected, and the employees can return to work if they feel they can adapt to work in their position.

A Zhejiang tyre factory also faces a shortage of production and management personnel, according to recent reports. The factory’s all-steel radial tyre production line staff have detected many positive cases, leading to a significantly reduced workforce. Among them, the moulding workshop has the most significant demand for personnel and its output has declined severely.

Production did not stop

Production at Chinese tyre companies has continued, and many manufacturing bases have tried various methods to ensure continuity in the face of the shortage of workers. The general manager of a Shandong Province tyre manufacturer told our sister website Tyrepress China: “At present, the transportation of raw materials and the shipment of finished tyres are smooth. As long as the logistics are not interrupted, production problems can be solved.” He said that production might slow down for a short period. In particular, the period before the Lunar New Year is the traditional peak period for shipments in China’s domestic replacement tyre market. However, if the timeline is extended to a whole year, the impact of this wave of infection is controllable.

In some tyre factories, it is common for uninfected employees to work long hours on multiple days. In addition, “working with illness” has recently become a high-frequency vocabulary in tyre companies. An industry insider told Tyrepress China: “If you don’t go to work, you won’t be paid, and many colleagues are working with illnesses.” It is reported that some front-line workers only took two days off after being infected and then returned to work. In many cases, “working with illness” is a helpless choice made by workers when faced with the pressure of survival. According to news reports, some infected people got sicker after “working with illness”.

Hope for the future

Not long ago, Luo Yongli, deputy general manager of Cheng Shin, said that the first wave of infected people had recovered and returned to work, gradually increasing production capacity. The wave of infections has caused tyre factories to quickly face a shortage of workers, but it has also given Chinese people hope that the epidemic will end soon.

At the end of 2022, the Chinese government issued many policies to promote economic development. When the epidemic is over, there is a high probability that the demand for tyres in the Chinese market will rebound. Similar good news has encouraged the tyre industry practitioners who are still struggling to survive. Not long ago, Cheng Shin and Cooper announced that they would expand the production capacity of their Chinese factories. What the current Chinese tyre industry needs to do may be to “survive the haze and welcome the dawn”, in the words of Chaoyang Long March’s recent statement.

This article was originally published in Chinese on Tyrepress China.