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.
On 8 July 2022, the European Commission (EC) re-opened its anti-dumping and anti-subsidy investigations relating to the imports of Chinese-made truck tyres [Regulation (EU) 2018/1579 and Commission Implementing Regulation (EU) 2018/1690]. The latest move follows the judgments of 4 May 2022 in joined cases T‑30/19 and T‑72/19.
On 1 July 2022, Goodyear announced that Justin Foley succeeded Jonathan Zhang as president of China, reporting to Nathaniel Madarang, president of Goodyear Asia Pacific.
The recent news that Sailun Tyre plans to invest 17.48 billion yuan in setting up two factories in Dongjiakou, Qingdao, has received widespread coverage in Chinese media. The investment in the tyre factory is 15.18 billion yuan, involving 20 million sets of semi-steel radial tyres, 10 million sets of all-steel radial tyres, and 150,000 tons of OTR tyres. The investment in the 500,000-ton new material factory is 2.302 billion yuan. Sailun’s various production bases will mainly use the material factory’s products. According to Sailun’s calculations, the Dongjiakou tyre factory will achieve 21.9 billion yuan revenue and 2.96 billion yuan profit yearly. The annual turnover of the material factory is 12.035 billion yuan, and the average annual net profit is 923 million yuan.
On 24 June 2022 Sailun decided to invest 15.18 billion yuan in building a new tyre factory in Dongjiakou, West Coast New District, Qingdao City, Shandong Province. The planned annual production capacity is 20 million sets of semi-steel radial tyres, 10 million sets of all-steel radial tyres and 150,000 tons of OTR tyres. At present, the Sailun board of directors has passed this investment proposal.
China’s largest tyre manufacturer, ZC Rubber, plans to list on the Shanghai Stock Exchange and has entered the pre-listing tutoring stage. Recently, Hangcha Group, one of the principal shareholders of ZC Rubber, confirmed the news. The institution that conducted ZC Rubber’s pre-listing tutoring is China Securities.
On 14 June 2022 Hou Yugang, chairman of Zaozhuang Mining Group, went to Zhongxing Huitong Tire for research purposes. During his public speech, Hou Yugang affirmed that Zaozhuang Mining Group’s takeover of OTR tyre specialist Huitong had transitioned smoothly following the transfer of equity.
On 4 May 2022 the European Court of Justice ruled that anti-dumping and anti-subsidy tariffs imposed against Chinese produced truck tyres in 2018 must be annulled. We take a close look at the ruling and the immediate impact on retreaders and Chinese tyremakers alike from page four of June’s bilingual Retreading Special supplement onwards. But what about the tariffs charges that have already been paid? And what about the ongoing impact of the tariff annulment?
Chinese listed tyre companies have successively released their 2021 annual reports in recent weeks. Here, Tyrepress analyses these annual reports’ comparing developments in revenue, operating conditions and overseas factory strategy. And the short story is Linglong remains the largest tyremaker amongst the top 10 listed Chinese tyre companies and that Sailun is the fastest growing.
The European Court of Justice’s (ECJ) judgement that the European Union’s anti-dumping and anti-subsidy tariffs should be annulled has been welcomed by many of those responsible for distributing these products across the continent. Yet for importers of these products in post-Brexit United Kingdom, the truck tyre tariffs introduced by the European Commission appear to be persisting. Speaking to representatives of the Imported Tyre Manufacturers’ Association (ITMA), the association whose members are most directly concerned with these tariffs, Tyres & Accessories now understands that the UK’s Trade Remedies Authority (TRA) does not intend to annul the tariffs since the ECJ’s judgement does not apply legally in the UK, even considering the view that the tariffs were implemented improperly under EC law. It follows that the status quo on these tariffs will be maintained, at least until the TRA reaches tyres in its review of the lengthy list of trade remedies inherited from the UK’s time as a member of the EU. Until such a review takes place, the tariffs will continue to apply until at least November 2023, and UK importers are effectively blocked from joining European colleagues in ending and recouping duties found to be improperly implemented.
China’s economy appears to have stalled since 2022. Recent data shows that the value-added of the manufacturing fell by 4.6 per cent year-on-year in April. An integral part of the national manufacturing machine, China’s tyre industry is also under pressure. “The most important task of our enterprise at this stage is to survive,” one Shandong tyre factory owner told Tyres & Accessories.
Back in August 2020, we reported on the joint venture (Hella Minth Jiaxing Automotive Parts Co. Ltd) established between Hella and the Minth Group to develop and market radomes (absorbent covers for radar systems) and illuminated logos. We learned recently that the JV has put a second production plant into operation in the Chinese city of Jiaxing, to meet growing demand. The permeable covers for radar systems can be manufactured in special designs according to customer requirements and embedded in the radiator grille or in a customer logo, for example.
Pirelli & C. Spa has reported a strong set of first quarter 2022 results which show revenues and pre-tax profits (adjusted EBIT) were up 22.2 per cent and 35.4 per cent respectively despite considerable turmoil related to the war in Ukraine and the resultant sanctions against Russia, where Pirelli runs two tyre factories. However, the tyre manufacturer has also revised down full-year estimates due to the same “geopolitical tensions”.
On 24 April 2022, the State Administration for Market Regulation of China announced the sampling inspection results of transportation products in 2021. Among the 24 batches of tyre products randomly checked by government departments, there were two batches of what are referred to as “unqualified products”, with a resulting failure rate of 8.3 per cent. In 2019 and 2020, the failure rate of the tyre product sampling inspection was 2 per cent and 0 per cent respectively.
Tyrepress has learned from people familiar with the matter that the shareholding of Shandong Yongsheng Rubber Group Co., Ltd. has changed recently. After the equity change, Tian Xiuzhen held 50 per cent and became the group’s major shareholder. Liu Zijun and Liu Huiqin each own 25 per cent of the shares.
Anti-dumping and anti-subsidy tariffs imposed against Chinese-produced truck tyres in 2018 must be annulled, according to a judgement published by the European Court of Justice on 4 May 2022. Tyres & Accessories understands that the verdict can be appealed between now and July, but unless that appeal is successful, the annulment of anti-dumping tariffs against Chinese-produced truck tyres will result in increased imports and sales of those products.
If you would like the latest news from the Chinese tyre industry in Chinese, visit our partner site TyrepressChina.com. Or click below to continue on Tyrepress.
Goodyear
Sailun
Sailun
Huitong
Mylene2401; Pixabay
The Court of Justice of The European Union
Hella
Pirelli