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.
As part of the global footprint restructuring announced as part of its Mid Term Business Plan (2021-2023), Bridgestone Corporation is shutting one of the two truck tyre plants it currently operates in China. It will close the Bridgestone (Huizhou) Tire Co., Ltd. (BSHZ) facility by the end of 2021, consolidating its manufacturing footprint into the Bridgestone (Shenyang) Tire Co., Ltd. (BSSY) plant.
As of 1 December, Bridgestone Corporation has completed selling all shares in its Bridgestone (Huizhou) Synthetic Rubber Co., Ltd. subsidiary. The new owner of the business, which manufactures synthetic rubber for passenger car tyres, is Taiwan’s LCY Chemical Corporation. Bridgestone announced the planned sale on 15 June 2021.
The Yokohama Rubber Co., Ltd., announced today that it has succeeded in removing fake Yokohama aluminium wheels from the market in China. Authorities in Foshan, Guangdong Province aided this most recent victory against counterfeiters.
Often when we see the words ‘VMI’ and ‘China’ used in the same sentence, the context is a court ruling or copyright infringement. But although such issues are significant, they tell by no means the entire story of VMI in China. The company is now looking back at its 25 years in this market, a period it describes as one of “extraordinary change in the Chinese tyre industry” – change that “VMI has been at the heart of it.”
Cabot Corporation has agreed to buy Tokai Carbon (Tianjin) Co. Ltd. from Tokai Carbon Group for US$9 million. The carbon black manufacturing facility was commissioned in 2006 and is located in close proximity to Cabot’s current carbon black and speciality compounds facility in Tianjin, China. Cabot will run the plant and intends to continue to supply current customers while conducting technology upgrades. The transaction is expected to close in the second quarter of 2022.
2021 has been a year of significant strategic developments for the fast-growing Linglong Tire business. On 10 June 2021, Linglong announced plans to invest in a huge tyre manufacturing facility in Tongchuan City, Shaanxi Province, China, which will output a wide range of products including 15.2 million high-performance radial tyres and 500,000 retreaded tyres. That three-phrase project will see construction commence in April 2022 and will be completed in March 2028.
VMI Holland says it “strongly welcomes” the decisions made by the Higher People’s Court of Jiangsu Province in its favour in two final judgements, delivered on 3 November 2021. The court has not only refused Safe-Run’s application to set aside the first instance judgements that a lower court made against the company; it has also maintained the damages for Safe-Run’s continued infringement of one of VMI’s patents in China.
Hindsight is said to be 20/20, yet this isn’t a faculty that helped the tyre industry this year. Early optimism driven by vaccine rollouts quickly turned to despair as sideways-parked container ships, skyrocketing sea freight prices, rising material costs and supply shortages delivered blow after blow. As we enter the final quarter of the year we have a much clearer view of what’s going on, and what we see is that tyres will be pricier in the coming months – assuming we can get our hands on them.
A number of European industry associations, including vehicle manufacturers’ association the ACEA and wheel manufacturers’ association EUWA, have issued an “urgent call for action against the imminent risk of Europe-wide production shutdowns as a consequence of a critical shortage in the supply of magnesium from China.”
As if the Covid-related troubles combined with complex shipping challenges and rising raw material costs weren’t enough, Chinese government policy is now adding to the pressure on tyre manufacturers making tyres for export from the People’s Republic. Specifically, the Chinese central government environmental policy has led to power rationing across the country since mid-September, which has had a marked impact on manufacturing business including the tyre industry. Indeed, more than 20 tyre manufacturers have experienced power-rationing-related temporary shutdowns and/or have implemented price increases because of these product headwinds. And these are having a marked impact on tyre production.
STARCO Huanmei, a wheel manufacturing operation in China founded in 2007 as a joint venture with Kenda, is moving to an entirely new production facility that provides the scope to greatly increase output. The new plant is located in Zhejiang Province, some three hours away from Shanghai. Following a traditional Chinese opening ceremony two weeks ago, STARCO anticipates the factory achieving full operation by mid-October.
Sinochem Holdings, the entity who through its China National Tire & Rubber subsidiary has a controlling stake in Pirelli and Aeolus Tyre as well as a substantial shareholding in Prometeon Tyre Group, has signed a strategic cooperation agreement with China Cosco Shipping intended to “guarantee the security and stability” of its industry and supply chain.
Linglong Tire says the start of its original equipment tyre supply to the Honda Crider represents “another milestone breakthrough” for the company in the global OE tyre market. It shipped the first batch of tyres to Guangqi Honda in September 2021, almost three years after commencing development work on OE tyres for the Crider, an exclusive to China model that sits in the Honda range between the Civic and Accord.
Changan, one of China’s top-selling domestic automotive brands, has unveiled its first all-electric model, the C385. Zhongce Rubber Group (ZC Rubber) is supplying original equipment tyres to the new electric Changan, which will wear the SU318a all-season tyre in size 245/45 R19.
Leading tyre building machinery manufacturer VMI Holland B.V. has issued a firm rebuke to Safe-Run Intelligent Equipment Co., Ltd after the latter issued a press release on 31 July claiming victory in the companies’ ongoing legal dispute. Contrary to Safe-Run’s view, VMI said the Jiangsu High People’s Court of China’s ruling represented “a major defeat for Safe-Run and almost total vindication of VMI’s position.” VMI first announced it had won “a significant lawsuit” against Safe-Run relating to its intellectual property in February 2021. Subsequently, the Netherlands-based firm said the appeal court finalised its judgement that Safe-Run were infringing on VMI’s two key patents relating to tyre building machines. Safe-Run was ordered to stop infringements immediately and pay VMI damages totalling RMB 2.46 million (around 320,000 euros). VMI notes that these payments are “very high [compared] to the average damage awards of around RMB 100,000 in similar cases in China.” Safe-Run’s statement is not currently available.
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.
Tokai Carbon
Pixabay
Sora Shimazaki from Pexels