Now one of the largest tyre-producing countries in the world, China has an indisputable influence on the direction of global tyre trade. The home of both fast-growing up-and-coming brands as well as a burgeoning domestic market, this tag chronicles China’s involvement with the tyre business.
Following the news that the Japanese conglomerate that own Stapleton’s Tyre Services has bought Kwik-Fit, Itochu has clarified that while the group is interested in “know-how” synergies between the businesses, they will continue to be run as completely separate entities.
MIRA has announced its intention to become a £100million business within the next 10 years. The well-known independent test centre, which is home to test garages belonging to Dunlop, Continental, Giti and Kumho to name but a few, says the business’ growth will see MIRA become the most advanced independent transport technology facility in Europe. And the operation reports that it is willing to commit £300 million to investment in new infrastructure at its Midlands base.
On March 3 Continental AG will hold its annual press conference, at which it will provide detailed information on its performance in 2010, a year in which the automotive supplier says it emerged from the crisis “in impressively good shape.” The company has already reported an increase in annual sales from 20 billion euros in 2009 to “at least” 25.5 billion euros last year, a figure helped by the “positive performance” of the company’s car tyre division.
The latest market data released by GfK suggests Malaysia's passenger car tyre business recorded sales of over US$78 million during the fourth quarter of 2010. The analysts also reported increased popularity of American and European tyres in the market.
"It is not unusual for quarter four to register stronger demands as major festivities like Hari Raya, Christmas and school holidays all take place during the last few months of the year," commented Jennifer Chan, general manager of GfK Malaysia. "In preparation for heavier usage of their cars for visitations and long drives, car owners tend to send their vehicles for their due servicing which includes replacing their worn out tyres, around this period of time."
The China Economic News Service reports that the Taiwan’s based Formosa Plastics Group (FPG) intends to invest US$300 million establishing a synthetic rubber production facility in China’s Zheijiang Province. Construction of the plant Ningbo plant is expected to begin in October 2011 with volume production commencing in two years’ time. Initial output is given at 50,000 tons of IIR (isobutylene-isoprene rubber) per annum, with the tyre industry tipped to be the largest consumer of this. CENS reports that growing domestic demand from Chinese tyre makers has triggered FPG’s entry into the rubber industry. Furthermore, the company is said to be contemplating three other China based projects related to tyre production; these would require a further investment of $200 million.
Within the next two years capacity at Pirelli’s Jining factory in China’s Shandong province will double to ten million tyres per annum. During a China-based interview with Bloomberg TV on February 24, company chairman Marco Tronchetti Provera mentioned the capacity expansion as part of a 300 million euro investment in China to be made over the coming three years – Pirelli previously postponed its investment there in 2009 due to the recession.
After the recent announcement relating to the acquisition of Watts Industrial Tyres and of new production capacity in Hebei, China, Trelleborg Wheel Systems launched a new agricultural tyre concept centring on sustainability, productivity and lower fuel consumption. The TM Blue concept reportedly results from “advanced tyre engineering and enhanced production processes to decrease the use of natural resources and environmental impact while boosting the farm productivity.” But for purposes of the press conference at the SIMA agricultural equipment show in Paris on 22 February, Trelleborg presented a tyre that was literally blue to emphasise its point.
But the concept is nothing to do with the colour of the rubber (which may have been green if the company wanted to convey the same message to UK public). Instead it is all about improving the efficiency of land machinery, which reduces emissions and has the dual effect of cutting fuel costs, and protecting soil from unnecessary compaction, which increases crop yields and in turn helps farmers’ bottom lines.
Newly announced capacity increases at two Rhodia facilities, together with the company’s recently inaugurated plant in Qingdao, China, will increase Rhodia’s global highly dispersible silica capacity by more than 40 per cent. The French specialty chemicals company is investing in its Chicago Heights plant in the US and its Collonges-au-Mont-d’Or facility in France to give the plants a combined 32,000 tons per annum additional HDS production capacity. Start ups are respectively planned in the fourth quarter 2011 and the first quarter 2012.
Giti Tire Corporation (a Giti Group Shanghai listed company) recorded a 64 per cent year-on-year drop in 2010 net profit attributable to shareholders to 54 million yuan. This was despite a 36 per cent year-on-year increase in revenue to 3.61 billion yuan, according to a company filing.
…which is good news for Kwik-Fit’s Russian partner and other tyre retailers too. In February the Russia Trade and Industry Ministry forecasted a rapid recovery of the country's automotive market in 2011, supporting suggestions that Russia is once again on track to become the largest car market in Europe. What’s more this is likely to have a positive impact on those retail chains such as Kwik-Fit’s partnership with Russian Rolf Group, White Service.
Pirelli has announced that it will take its hard and soft slick compounds to the first four Grands Prix of the 2011 season. Pirelli’s motorsport director Paul Hembery suggested the compounds would offer the best racing for both spectators and drivers in Bahrain – currently under threat due to ongoing political protests, according to the sport's UK broadcaster the BBC – Australia, Malaysia and China. The manufacturer said the decision had been reached on the back of data collected in 18,000km of private testing in Europe and the Middle East, as well as three group tests to date.
Trelleborg has acquired an operation in Xingtai, Hebei Province, eastern China, in a move designed to facilitate the group’s expansion in the Chinese market for specialty, primarily agricultural tyres.
Trelleborg has acquired an existing facility from a Chinese company, part of the US Group Maine Industrial Tire LLC, and will also transfer approximately 180 employees. The acquisition and investments total approximately 100 million Swedish krona (£9.641 million; 11.45 million euros; US$15.54 million) over a three-year period. Production under the Trelleborg name is expected to commence during the second quarter of 2011.
Tire Group International (TGI) has opened a new logistics office in Xiamen, China. The location will be overseen by Emma Luo, who comes to TGI with experience in international freight forwarding and logistics operations, having spent 7 years with Schenker & Bax Global logistics, the company said.
The global commercial vehicle market is experiencing a “growing invasion of “low-cost trucks”, according to analysts from Frost & Sullivan. These trucks, mostly from Asian OEMs, are priced approximately 20-25 per cent lower than conventional trucks and are penetrating markets all over the world. In response the analysts are holding a free “European Threats and Opportunities” web conference on 22 February 2011 at 15:00 BST hosted by research analyst, Ryan Carmichael.
Maxxis International thanked its top 18 performing retailers of 2010 – the winners of the top prize in the Maxxis Rewards programme – by taking them on a seven-day, all expenses paid trip to China. A mix of culture and business, the visit combined sightseeing visits to major attractions in Shanghai, Hangzhou and Shuzhou with a tour of the Maxxis factory in Kunshan.
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