Foreign tire companies in China and analysis of trends in response to

China's robust economic growth, the rapid development of the automobile industry, a good investment environment and huge market potential has greatly attracted the world's multinational tire manufacturer in China to invest and build factories. In particular, China further opening to the outside world and economic globalization trend continues to heat up, the foreign tire manufacturers to speed up the transfer of the pace of China. World's top 10 multinational tire company Bridgestone So far, Michelin, Goodyear settled in China, such as 8, the latest German mainland companies to invest and build factories in China; tire of the original key state-owned enterprises, has been 50% of foreign mergers and acquisitions; radial domestic market share of more than 70% of foreign tire manufacturers has been eroded. Experts predict that a few years abroad, tire company's tire production will take China about 80% market share, Chinese tire market has become a multinational tire companies compete on the battlefield, and its strategy in China as the competitive environment of profound change Changes in the domestic tire companies are being eaten into the crisis. This is China's tire industry will result in the development of the overall situation and long-term impact, we must rise to great concern and attention.

--- From the beach-style layout to the overall situation

In the past, foreign companies such as Michelin tires, Bridgestone, solid-different, Jia Tong of Singapore, and so on, often to choose a Chinese partner in the establishment of a local tire production base, is a single point of the joint venture, a foothold in the beach - Layout. Now, in order to fully occupied Chinese tire market, foreign companies have to tire very long-term strategic interests and the interests of the overall layout. Michelin is not only the formation of the Shanghai Michelin Warrior Tire Company, a joint venture plant in Shanghai plans to build Michelin Group, the world's largest car and light truck radial tire production plant, also set up investment in Shanghai headquarters, It is said that China Southern plans to build a tire factory in China to complete its north to south, from the layout; another example, following the acquisition of Bridgestone in the third factory in Shenyang, Tianjin has set up a tire company and Wuxi in Jiangsu New tire manufacturing plant, completed in China's strategic layout; the most typical of Singapore's best tire to Hefei in Anhui Province as a bridgehead to enter the Chinese market, one after another in southeast China's Fujian Province, Southwest China's Chongqing, Yinchuan and the north-west Northeast China's Heilongjiang holding the establishment of joint ventures or wholly-owned tire production base in China to achieve its strategic layout. This layout changes, China will tire industry overall development impact.

--- Investments from the cautious to actively expand

In recent years, the rapid development of China's auto industry, tire demand also grew. Foreign tire companies have increased investment in China. Michelin to invest in the establishment of the Shanghai headquarters, and decided to expand Shanghai, Shenyang, two of the plant investment; Bridgestone in the capital 1,000,000,000 yen Tianjin, Wuxi investment in the plant 99,000,000 U.S. dollars; by Goodyear in Dalian 120,000,000 U.S. dollars capital expansion; Nanjing Kumho Tire expansion capital 695,000,000 yuan; investment in Hangzhou Yokohama, Japan, 60,000,000 U.S. dollars; Japan's Sumitomo to invest in Changzhou 60,000,000 U.S. dollars to build tire plant. In addition, Jia Tong, Hankook, China Taiwan is new, Cooper, have stepped up to build large capital investment or plant expansion efforts. According to preliminary statistics, from 1988 to 2002, foreign investment in the Chinese tire company to add investment of 1,880,000,000 U.S. dollars (including the share capital increase has been approved projects). According to the branch of tires in the first quarter of 2005 statistics, foreign investment 9 members of the National Tire production accounts for 30% of the total output, accounting for 35% of the radial tire, semi-steel radial tire which accounts for more than 45%. SAIC has tires included in the study of foreign investment in China is likely to form a monopoly of one of the seven sectors.

--- Operating from production to production service

In the past, foreign tire companies in China's tire industry and business investment in production mainly to China's control of the tire business and the impact mainly through the production technology to achieve a monopoly. Now, as to fulfill the commitments of accession to the WTO, restrictions on foreign capital to enter service in the area were canceled, the foreign tire companies in China business strategy also undergone important changes. Not only do they have to step up production in the field of control, but also in procurement, marketing and trade in services in the field of control. If Jia Tong, Kumho, Michelin, Hankook, and other foreign-funded enterprises in China or set up marketing headquarters, purchasing centers, or in various parts of the establishment of a sales network of distribution outlets, franchised stores, to carry out operations, service trade, production, Sales, service control, focus on sales, centralized purchasing.

--- From a single product to serialization

In the past, foreign tire companies in China's tire production compared with a single species. Now, with the domestic tire market competition, foreign tire companies in order to adapt to market demand, China has more varieties of products serialization direction, in order to improve market coverage. The most typical to pass a number of good, Anhui Tong Jia beginning of the main production truck bias, light truck tires, and then in Putian, Fujian used by the production of semi-steel radial tire, after the re-acquisition of Chongqing, Anhui, the three major series tires, not only of different specifications complete , And North and the South East and West have tire production base, improve the Chinese tire market in the coverage.

Foreign tire companies in China's accession to the WTO, fully enter the China market, its strategic change for many reasons.

The rapid development of the Chinese tire market has become a foreign tire company's global strategy for the implementation of vital importance. In the traditional tire market saturation today, who is in the emerging Chinese tire market advantages to occupy more shares, will be the world tire market competition to achieve the initiative.

China's accession to the WTO, foreign capital management policy change tires for foreign companies to provide strategic adjustment of the policy space. Such as the abolition of restrictions on foreign-owned or controlled, for the tire company to expand in foreign investment in China and to improve the control of the entire tire industry have provided favorable conditions; the abolition of restrictions on trade in services, so that foreign companies can tire of the capital, with its strong and mature marketing experience, The realization of China's tire market network control trade in services, from production control to increase production and trade in services of the double-shift control.

At present, more than 300 global tire company, the world's top 10 tire accounted for 80% of the production and sales, 60% of the share is more focused on Bridgestone, Michelin, Goodyear three giant hand. The same is true of Chinese tire market, foreign tire companies in China account for radial tire market share of 70% to 80%, and the pursuit of profit maximization, and constantly strengthen the tire industry chain complete control to promote its development in China in line with the long-term investment Business strategy.