Three factors led to the global tire industry earnings decline

September 25, the China Rubber Industry Association Tire Branch of the Secretary-General Tsai said that people from home and abroad in the near future the major tire companies announced in the first half of the statements, subject to price hikes of raw materials, market demand and scale down the expansion led to an over-supply of products, 2008 World tire industry and mechanical engineering industries as earnings decline, the pace of development has been slow.
Tire Branch of the Under-Secretary-General Yu-kun on analysis, the global tire industry to slow down the pace of the first major factor is the high oil prices drive tire raw materials increased rapidly. This year, rubber, carbon black and other raw materials rose substantially more than 30%, production costs increased rapidly. Despite the tire business has taken measures to increase the cost of digestion, but it is difficult to digest some of the raw materials prices offset the impact. This is evident from the statements of the enterprise can be seen. Bridgestone notice, in the first half profit fell 30 percent, and forecast profit this year than last year dropped 50%. Michelin in the first half operating profit decreased by 2 percentage points. China's raw materials up to the tire pressure caused by larger enterprises. According to the tires of 42 branch members to statistics, from 1 to August this year, profits fell 15%, loss-making enterprises amounted to 11, for the most in recent years.
Impact of the tire industry's second-largest factor is the overall demand in North America in particular, market demand has dropped significantly. As the U.S. sub-loan crisis and the deteriorating economy, the United States Rubber Manufacturers Association predicted that North America this year and next year by using tires, light truck tires, truck tire market demand will decline. The United States is China's tire exports important target market, affected by Chinese tire exports began to fall sharply. According to the statistics branch of tires, 42 tire companies this year, export growth has declined markedly. 1 to a total export volume in August year-on-year increase of just 9.6 percent, and 24.6 percent over the same period of last year's level of growth to form a great contrast.
Yu-kun on the view that affect the tire industry's third-largest factor is the global expansion of production capacity to make an over-supply of products. At present, the world's tire sales in more than 50% of Michelin, Bridgestone and Goodyear Tire giant is still 3 expansion capital, and the tire to invest and build factories in China and the expansion could be more obvious. According to statistics, China now has all-steel radial truck tire production capacity of more than 70,000,000 / year, while demand in China was only about 40,000,000. According to the statistics branch of tires, 1 to August this year, 42 companies stock up 37.8 percent. Industry sales before the 6 year-on-year increase in business inventories in more than 30%. Now, some of our tire businesses have been taken "to open the second five-stop" measures to limit production.