Industry: China's domestic tire companies face both internal and external problems

In recent years, with the rapid development of China's auto industry, the rapid growth of the tire industry. According to statistics, in 2005, the national output of tires 318,000,000, 2004 239,000,000 an increase of 33.05 percent, industry-wide tire size of 406 enterprises achieved a production value of 108,875,000,000 yuan, to achieve a total of 103,018,000,000 yuan of sales income, Production and marketing rate of 94.62 percent; the industry realized a total profit of 5,011,000,000 yuan more than in 2004, an increase of 26.3 percent.

In spite of this, but the industry pointed out that China's local tire business is experiencing significant internal and external problems, only to find a new breakthrough in order in the increasingly fierce market competition to achieve the initiative.

Climb up the cost of production

According to the Fuzhou Customs statistics, in the first half of this year, Fujian Province imported 30,527 tons of natural rubber, and last year increase of 24.27 percent over the same period; total value of 50,420,000 U.S. dollars, representing 81.45 percent increase over the same period last year; the average import price of 1651 U.S. dollars / ton, the same period last year Up 45.98 percent.

Rubber prices are rising, no doubt to the domestic tire companies have brought tremendous pressure on costs. "Compared with the same period last year, the first 4 months of imports of natural rubber price increase of 50% or 23% Synthetic around in my tire rubber raw materials required for the enterprise, 70% and 40% Natural Rubber The Synthetic must rely on imports. Not only that, other raw materials such as carbon black, zinc oxide, such as the price of imported raw materials greatly increase. In addition, the resulting transport, fuel, etc. are increasing the cost. "Rubber China Industry Association, Ju Hong Zhen told reporters.

Raw materials up, but tire sales price was basically unchanged. This is the tire business profits in the near future a major cause of the decline. From China Rubber Industry Association statistics, this year more than 4 months before the tire business with the tire production growth compared to the same period last year, but the economic efficiency of enterprises has declined. According to statistics, 35 domestic-funded enterprises in tire sales over the same period last year, an increase of 20.53 percent, but profits fell by 27.48 percent year-on-year, the loss-making enterprises amounted to 11, more than the same period last year by 6, of which there is a business first 4 months Loss reached 96,220,000 yuan.

Frequently intervene in foreign-funded enterprises

In recent years, as a result of China's tire industry, the proportion of foreign investment have relaxed restrictions on foreign tire giant to expand business in China one after another, so that the tire market competition even more fierce. At present, Michelin France, Japan, Bridgestone, Goodyear, and other U.S. multinational companies in China have established more than 20 wholly foreign-owned or foreign-controlled enterprises. These enterprises in the domestic car, light truck radial tire market, as well as high-grade radial tire market is dominated possession, possession of which Michelin on a 20% market share.

The trade situation brought about by the industry expressed concern over security issues. Financial and technical gaps, so that the local tire business in competition with foreign-funded enterprises in a very disadvantageous position. In the production scale, product range, product quality, local enterprises are inferior Department.

Some people are optimistic about the show. China Rubber Industry Association, a branch of the tire responsible told reporters that at present, foreign-funded enterprises on the tire industry's penetration is not very serious. Some of the strong involvement of foreign-funded enterprises, Chinese enterprises will bring the role model. In the fierce competition, the pressure for the tire-funded enterprises to improve product quality and establish their own brands play a role in the promotion.

Export repeated anti-dumping

At present, China has become the world's second largest tire producer and exporter, each year one-third of the tire to be exported. However, in addition to export growth in a number of large-scale touch the interests of multinational corporations, export enterprises to overseas markets for each other to keep the prices down, the vicious competition occurs from time to time, leading Chinese tire companies frequently subjected to anti-dumping proceedings. Venezuela, Peru, India, Egypt, Turkey, South Africa, and other countries have exporting Chinese tire to bring anti-dumping investigation.

By the end of August this year, South Africa announced that Shanghai Jia Tong, Aeolus, Henan, Shandong and the Triangle, such as Shandong Chengshan Tire business tax rate of zero. It is reported that during the four tire companies to win the victory of the anti-dumping suits, other litigation experience of the 10 companies immediately joined the ranks of the respondent. Qingdao Double Star, South China, such as tires will go to South Africa without damage to the complainant. If successful appeals in the future export of South African tire companies will receive duty-free. This is the 10 years since the Chinese tires in 11 anti-dumping proceedings for the first time to win. Nevertheless, the Chinese tire industry has become an international trade most frequently subjected to anti-dumping, the highest number of one of the industry.

In addition, some countries began to set more stringent standards for imported technology, China's tire exports will face a greater challenge. It is reported that the United States from June 1, 2007 from the implementation of the new tire testing standards, the use of the existing standards more stringent than the security parameters.

How to solve problems

Industry experts suggested that in order to ease the cost of raw materials brought about by the crisis, long-term economic efficiency, business can be used internationally for the renovation and reuse of the powder production methods, recycling of discarded tires. Related information shows that in 2005, China's tire production is 318,000,000, the number of discarded tires more than 112,000,000, the renovation of the tire was only 11,000,000, the new tires and tire renovation of about 29:1. In the same year, the United States about tire renovation of 28,000,000 new tires and tire renovation of the ratio of 9:1.

In the face of strong foreign-funded enterprises and access to export markets, China Rubber Industry Association, Ju Hong Zhen pointed out that local enterprises should consolidate the tire of its comparative advantages in low-end tires gain a firm foothold in the field; enterprises to develop their own importance but also to improve Product quality and technical level, to increase the capacity of high-end market expansion in order to establish their own brands and gradually expand the size of the enterprise, the tire industry as a whole to promote the restructuring of assets. National policies should also be introduced to Fuyoufuqiang, to create a favorable market environment. He also pointed out that the tires can not export enterprises engaged in low-cost competition, only to improve product quality in order to compete in overseas markets to gain a foothold.