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.
The distributor of counterfeit Yokohama racing wheels has been sentenced to time in prison after being found in the possession of more than 1,000 aluminium wheels. The Intermediate People’s Court of Guangzhou, in China’s Guangdong Province, also fined the distributor on 19 August.
Reifen China’s 2014 edition will take place on 3-5 December at the Shanghai New International Expo Centre on December 3 – 5, 2014. On the occasion of the eighth edition of the international meeting place for the sector, Messe Essen and the China United Rubber Corporation (CURC) are expecting around 120 exhibitors from numerous nations. Many of the biggest names in the Chinese tyre industry will be present, and the organisers have particularly emphasised the manufacturing backbone of the show; with around 45 percent of the exhibitors originating from the producing industries, “Reifen China will be a manufacturers’ fair”. The organisers are expecting a total of around 15,000 visitors to both trade fairs.
Automechanika Shanghai’s organisers (Messe Frankfurt) report that the auto parts show is concentrating its efforts on providing an “outstanding” and “insightful” event this year. Scheduled to take place from 9 – 12 December at the Shanghai New International Expo Centre in China, the fair is described as the world’s second largest Automechanika. It focuses on automotive parts, accessories, equipment and services, by providing a comprehensive showcase on the future of automotive after-service development in the region.
How does a tyre manufacturer grow from nothing to having large-scale international sales and a few percentage points of market share in a country like the UK in just five years? The answer is by starting with a blank piece of paper and by virtue of some strategic acquisitions.
One company that Tyres & Accessories met for the first time at Brityrex was Tri-Ace tyres, a Chinese contract manufacturer focusing on the Tri-Ace, Black Bear and Mark Ma brands. The company’s products extend across the passenger car, ultra-high performance, trailer and light truck segments.
After three and a half years of selling the Dynacargo range in the US, Canada and Mexico, Interstate launched this truck brand in Europe at the Essen show in Germany in May. Back then it was one of a number of new ranges launched across the continent. During October’s Brityrex, Interstate gave Dyncargo its UK-specific debut and this time the truck tyre products were the company’s central focus.
Triangle Tyre Co., Ltd. has announced plans to show a new generation of passenger car tyres at this year’s SEMA show. According to the company, Triangle’s presence at the SEMA Show 2014, which takes place in Las Vegas, USA between 4 and 7 November demonstrates the manufacturer’s “commitment to innovation for growth”.
Shanghai-based contract tyre manufacturer SD-International recently reinforced its European sales team with the appointment of Andy Baron as sales manager (Northern Europe). Both this and the introduction of the company’s new Toledo range took place during October’s Britytrex exhibition in Manchester.
While some market analysts are pointing to the end of the 20 per cent annual growth “dream” attached to the seemingly perpetually growing Chinese domestic passenger car vehicle market, others point to the continuance of an “upward trend”. A new analysis of the automotive market in China produced by HIS should be counted amongst the optimists and suggests “significant growth opportunity continue in many of the country’s provinces, however, some provinces will start to see growth rates change significantly”. According to IHS Automotive forecasts, passenger vehicle volumes in the country as a whole are expected to rise more than 10 million units by 2026. And thus the detail is not as far apart from the opposing thoughts as it may first seem.
Even today the number of Chinese tyre makers, and tyre brands, remains exceptionally high. The necessity for consolidation is obvious and something China’s authorities are well aware of. And in the People’s Republic of China, where the state has a closer relationship to the market than in the West, how a firm appears to measure up can be crucial. Tyre makers who fail to meet targets set for them fall by the wayside while those who establish a global presence grow in favour and are viewed as strategically significant enterprises. This state-business relationship also means companies can rely upon government support in one form or another – and this certainly applies in the case of Jiaozuo, Henan Province-based Aeolus Tyre Co., Ltd.
Chengshan Group Company Ltd. intends to acquire Cooper Tire & Rubber Company’s 65 per cent ownership in the two companies’ Cooper Chengshan (Shandong) Tire Company Ltd (CCT) joint-venture. Owing to the fact that the purchase offer is based on a pre-agreed “call option”, which itself is priced on the back of an agreed valuation of US$440 million, this means Chengshan has agreed to pay roughly US$286 million for the company. Cooper’s share price fell a dollar from around $29 to roughly $28 in response to the announcement.
Chinese tyre manufacturer Qingdao Sentury Tire has commissioned Finnish robotics company Cimcorp to deliver a new material handling solution for passenger car green tyre production. Plans are that the system will be fully operational next year, and the stated aims are to increase plant productivity and improve product quality.
It is reported that China-based Guangzhou Fengli Tyre and Rubber has started work on a project at its plant in Conghua, Guangdon Province, to install annual capacity for 10 million eco-friendly, high-performance tyres.
Ipsos Business Consulting, a leader in fact-based business consulting, has published new research highlighting the risks posed by counterfeiters in China’s fast-growing automotive parts market.
China’s automotive components sector is set to achieve annual growth of 20 per cent for the next five years driven by demand for new cars and a growing secondary market. The aftermarket segment will become the main outlet for automotive parts as the average age of vehicles on the road continues to rise and the current total car population has already surpassed 100 million. The counterfeit auto parts market, already the world’s largest with a current value of about US$40bn, will only increase as the overall market grows.
Tyre equipment manufacturer Mesnac has acquired Fushun Yikesi New Material, a Chinese producer of synthetic rubber and resin products, for the sum of US$60 million, according to reports. The acquisition gives the company entry into the rubber raw materials side of the industry.
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