Huasheng Rubber’s “Huasheng Dream”

In 1983, Zhang Shulin, Huasheng Rubber’s founder, began producing agricultural machinery springs, sealing rings and motorcycle rubber pedals in his six bungalows. 40 years later, this family workshop evolved into a large tyre company with five factories and over 7,000 employees. In the list of the top 100 companies released by the China Rubber Industry Association in 2023, Huasheng Rubber ranked 16th among tyre manufacturers with a revenue of 5.17 billion yuan (international brands, including Michelin, in this ranking, only count China company performance). We were curious about how this company survived the highly competitive Chinese tyre industry and realised the “Huasheng Dream” step by step. With this question in mind, Tyrepress China interviewed Zhang Jing, deputy general manager of Huasheng Rubber, during the 2023 Guangrao Tyre exhibition.

Seize the opportunity

At the Guangrao tyre exhibition in 2023, Huasheng Rubber set up two booths in conspicuous positions – Huasheng and Roadboss and held a press conference for electric vehicle tyres. In Zhang Jing’s view, electric vehicle tyres are the next opportunity for China’s tyre industry. According to data from the China Association of Automobile Manufacturers, from January to April 2023, automakers in China produced 2.291 million new energy vehicles, a year-on-year increase of 42.8% and a market share of 27 per cent. As the market gradually recognises the new energy vehicles of Chinese brands, the next outlet may be the new energy vehicle tyres.

For Huasheng Rubber, the way to seize opportunities is to adjust its business strategy according to China’s policies constantly. Entering the new energy vehicle market has been written into the strategic planning of this tyre company in the next few years.

At the Guangrao Tyre Exhibition, Zhang Jing calculated a set of cost data for Tyrepress China: “The price of a new online car-hailing car may be more than 100,000 yuan. If it is driven on the road daily, the car must change the tyres twice a year. According to the price of foreign brand new energy vehicle tyres, eight tyres need about 20,000 yuan. Considering the price of vehicles, the cost of the tyres is a bit high.”

Tyrepress China learned that Huasheng Rubber would first promote new energy vehicle tyres to online car-hailing groups in large cities such as Beijing, Shanghai, Guangzhou, Shenzhen, and Hangzhou. At the Guangrao tyre exhibition, Zhang Jing did not mention the product price of the newly launched electric vehicle tyres. However, from the information she revealed, it can be speculated that Huasheng Rubber, which has a reputation for high-cost performance, will likely provide Chinese online car-hailing operators with price-competitive new energy vehicle tyres soon.

Seizing opportunities is one of the essential reasons why Huasheng Rubber has grown continuously in the past 40 years and developed rapidly in recent years. Zhang Jing said: “We have a keen sense of smell. When opportunities come, we will seize them.” In 1994, Huasheng Rubber established a rubber hose production workshop. 2000 the company began producing tyres for motorcycles and agricultural and engineering vehicles. In 2008, Huasheng Rubber’s products changed from bias tyres to radial tyres. A few years ago, with the merger and reorganisation of tyre companies in Guangrao County, Huasheng Rubber took over several tyre factories. Because of being able to seize the opportunity, Huasheng developed from a factory with more than 2,000 employees to a large tyre manufacturer with five factories with 7,000 employees in a short period.

Pay attention to balanced development

One of the most profound impressions Zhang Jing left on Tyrepress China during the interview was her pragmatic attitude. She believes a healthy enterprise should combine its ability to resist risks and develop in a balanced way.

Many years ago, the United States imposed anti-dumping and subsidy duties on Chinese-made trucks and bus tyres. Many Chinese tyre manufacturers that relied heavily on the US market lost many customers. In Guangrao, due to the trade barriers set up by the United States, many tyre companies that borrowed money to expand and implemented the “interconnected mutual insurance” policy lost their ability to repay debts and eventually evolved into a major reshuffle in the industry.

Tyrepress China learned that Huasheng Rubber’s current strategy is “domestic sales must account for half of the company’s production capacity” to cope with the unpredictable international situation. Meanwhile, China’s 1.4 billion people also give the tyre manufacturer the confidence to maintain such a market layout. At the 2023 Guangrao tyre exhibition, Huasheng Rubber welcomed more than 700 distributors, many of whom are from the Chinese domestic market. The visits of more than 700 dealers can, on the one hand, show that this company has sufficiently detailed planning for downstream channels. On the other hand, it can also show Huasheng Rubber’s determination to focus on China’s domestic market.

Focusing on the domestic market does not mean giving up the international customers. Zhang Jing repeatedly told Tyrepress China that a healthy enterprise should focus on balanced development. Health means that companies must maintain an appropriate ratio of domestic and international markets. And for the global market, “eggs should be put in multiple baskets” to ensure the enterprise can resist risks.

For Huasheng Rubber, another pragmatic aspect is not mindlessly building factories overseas because of the excessive pursuit of profits. Zhang Jing told Tyrepress China they are also investigating the conditions for building factories in Southeast Asia. Overseas factories can help tyre companies avoid trade barriers in the United States and Europe and open overseas markets. Many Chinese tyre companies with overseas factories have relied on this advantage to grab many profits in recent years. However, for Huasheng Rubber, which is determined to take root in the Chinese market, exploring overseas markets is not the most urgent thing. Of course, a tyre manufacturer aiming at balanced development will consider the overseas market when the time is right. Zhang Jing said: “(Building factories overseas) is a road to go.”

Power of time

“Our main business is tyres and will not extend to other products.” Zhang Jing said. As a necessity in people’s daily life, she believes the tyre market still has great potential to be tapped.

After 40 years of development, the head of Huasheng Rubber has changed from Zhang Shulin to his son Zhang Yuliang. The company’s business segment has also formed a complete system of TBR, PCR, conveyor belts and import and export trade of tyres and raw materials. Forty years is not a short time. But compared with some international first-tier tyre brands, 40 years is a short time. For Huasheng Rubber, which currently operates five factories, it takes much work to settle down in time and continue to develop based on maintaining the current scale.

In 2020, the tyre manufacturer invested 150 million yuan to establish a technology research and development centre, demonstrating its determination to take root in the manufacturing industry. However, R&D and branding require much investment in the early stage, and it takes time to show results finally. Tyrepress China learned that Huasheng Rubber had invested more than 700 million yuan in innovation and creation projects in recent years. The company introduced the 3D design and simulation system, reducing the product design cycle from 46 days to 21 days. At the same time, the company has also introduced 5G and Internet of Things technology in the tire production process.

The electric car tyres released during the Guangrao Tyre Exhibition in 2023 are also a product of time. Zhang Jing said: “The research and development of electric vehicle tires is a cycle, and the next step can only be carried out after one step is completed. For the newly released electric vehicle tyres, we spent two years from research and development to testing to actual road testing.”

It also takes time to build a brand. “Brand is the companion of time,” Zhang Jing said. In her view, the brand is gradually revealed with time, and there will be no brand without enough time. Currently, the tyre brands held by Huasheng Rubber include Roadboss, Kapsen, and Habilead. In recent years, this tyre manufacturer has undergone significant changes every year and has also attracted much attention. And a few years later, what kind of company will Huasheng Rubber grow into, and what kind of height can this company’s brand reach? These questions will take time to give the final answer.