Recently, several major tire manufacturers in the country have become perturbed. Although the "tire special security case" did not finalize the verdict, they knew that once the most unwilling to see the results, the door to the United States will be heavily closed. Previously, as a result of Brazil’s increase in tire tariffs, many Chinese tire companies have already exited the Brazilian market. While the road to exporting to the United States is full of variables, many tire products companies, such as South China Rubber and Zhongce Rubber, which mainly export to the United States, have turned their attention to exploring new markets and killing the domestic market. However, their survival status is not optimistic. From the "tire special protection case", it is not difficult to reflect the true living conditions of Chinese tire companies. Fortunately, it is known that the future is full of thorns For the special security case, Zhou Hanbin, deputy general manager of Xindi Tire said that due to the support of Obama’s steel group in power, so the probability of losing China is very high. However, the final tariff line will be lower than the current "55%, 45% and 35%". Ge Guorong, head of Hangzhou Zhongce Rubber Co., Ltd., also believes that China's tire companies have little chance of winning. Special security case is related to 100,000 rice bowls Once the special security case was passed, the tariff was increased from 3.4% to 4.0% to 55%. This means that for the Chinese tire industry, it means to abandon the US market. Deng Yachen, secretary-general of the China Rubber Industry Association, said that the loss of Chinese tires to the United States will reach about US$1.1 billion, and the number of workers in the domestic tire industry and related upstream and downstream industries will also be reduced by about 100,000. As the rains and winds fill the building, upstream and downstream companies such as rubber, plastics, adhesives, and tire equipment manufacturers will also be affected. Among them, the rubber industry is particularly hard hit. According to the latest statistics from the China Rubber Industry Association, the 2008 tires The total output value of the industry accounts for more than 65% of the total output value of the rubber industry, which means that the rubber industry has about 6% of raw materials used for the production of tires exported to the United States. In addition, due to the impact of the international financial turmoil, China's tire export volume has significantly declined in the first half of this year. Cao Chaoyang, chairman of Fengshen Shares, believes that tire premium protection will further worsen the international trade environment and will inevitably intensify competition in the domestic tire industry. “China's tire-related industrial chain's profit sources are mainly low labor costs, land costs, and sewage charges, as well as national export tax rebates, and the factor cost is very low.†Some industry insiders have analyzed the previous competitive advantages of Chinese tire companies. This means that when the living environment is worse, exit will become an inevitable choice for some of the weaker manufacturers. The biggest loss of former exporters "If tariffs are really imposed, our product prices will not be able to compete with Michelin and Hankook's products in the local market. This means that our products cannot be sold in the United States." Very optimistic. For the company that achieved sales revenue of US$120 million to US$130 million in the United States last year, once the special security case is implemented, the losses suffered can be imagined. At present, 70%-80% of tires exported to the United States by South China Tires are tires for passenger cars, and the rest are all heavy-duty tires. Among them, its flagship brand high-performance car tires occupy a market share of about 8% of the US high-performance passenger car tire replacement market. Ge Guorong, the head of Hangzhou Zhongce Rubber, told reporters that the export amount of Zhongce Tire amounted to approximately US$600 million each year, of which 22% was exported to the United States. The manager of the International Trade Department of the company, Su, also stated that the US market is their largest single export market. If the United States determines to implement special tire protection measures, it is unlikely that China Strategic's products will continue to be exported to the United States. As for the specific loss figures, the company said it was inconvenient to disclose. The outside world is very exciting and very helpless In fact, the tire export market in the United States has been deteriorating in recent years, and the domestic tire giant's export strategy has been adjusted. After doing the worst, they are still looking for their own way out - to open up Europe and emerging markets. Emerging Markets Can Be Destroyed Zhang Qian, a spokesperson for South China Tire, said that in the first half of 2009, the company had developed 28 new customers, mainly in Spain, New Zealand, the United Kingdom, and Canada, ensuring that exports maintained a steady growth. Aeolus Tire's marketing measures in South America, the Middle East, and Africa have also achieved initial success. In particular, the demand in the Middle East and Africa has complemented the gaps left by European and American customers, and the downward trend in export business has been curbed. Xindi Tire currently orders 60% of its products from the Middle East and Africa markets. Even if it is affected by the “Special Protection Case,†its production and sales plans for the next two years will still be able to maintain double growth. On the other hand, domestic tire giants are also aware of the necessity of optimizing the product structure and accelerating the application of international advanced technologies and their introduction to the market. In 2007, South China Tire Co., Ltd. successfully developed tires for "air-free use" and 26-inch high-performance passenger car radial tires. Among them, "air shortage" tires passed ECE certification in Europe in April 2009 and were put into mass production. European market supply. Reliance on exports is not a long-term solution In the interview, Zhang Qian, a spokesperson for South China Tire, still had a lot of worries about expanding the market in the enterprise—the European market's trade barriers for imported tires will not be much lower than those in the United States. In addition, the highly-selling high-profit products in the United States will be temporarily Failed to win the favor of the European market. In this regard, he even showed his reluctance to the United States market: After all, the United States has much higher spending power. Once the special security case has been passed, European countries with many tire brands are likely to raise their sticks to protect local companies in due course. Other markets such as the Middle East, Eastern Europe, South America, and Africa also have the potential to follow suit. Previously, in Brazil’s anti-dumping investigation against China’s tires, Chinese companies lost their lawsuits and were imposed a 100% tariff, resulting in Chinese companies collectively withdrawing from the Brazilian market. This is a lesson from our previous experience. It's better to go back and start again After the days of export are getting harder and harder, major domestic brand tire manufacturers have returned. "Tire enterprises should carry out product upgrades and use management experience and product technology as their core competitiveness." Gasgoo.com Chen Wenkai believes that this is a life-saving straw for Chinese companies. In the various transformation options faced by tire companies, despite the difficulties in entering the domestic passenger car market, there is still hope ahead. Passenger car market is a straw The domestic passenger vehicle tire matching market is currently dominated by foreign brands, and even Chery’s tire suppliers are only the Linglong one domestic domestic brand. From a realistic point of view, it is not the best time for China's tire factories to enter the passenger car market. However, Chen Kaiwen wants Chinese tire companies not to be discouraged. “Companies are profitable, as long as domestic tire factories can make up their minds to upgrade their technology. With high-quality products and low prices to obtain the market, there will still be opportunities to enter the market in the future." In the interview, South China Tire was prepared to take a dip and hoped to compete with the multinational tire companies in the mid-to-high-end market by perfecting the middle and high-end products. Zhang Qian said that the company has formulated a strategy to promote domestic sales through matching. In the first half of 2009, FAW Cars, Shenlong Automobiles, Guangzhou Automobile Group and China National Heavy Duty Truck manufactured tires and manufactured samples for the first time. Among them, CNHTC first supplied tires. Has been officially shipped. At present, the company's supporting manufacturers include FAW Car, FAW Jiefang, SAIC, China National Heavy Duty Truck, BYD, GAC Changfeng, JAC, Shaanxi Automobile, and Ankai. Feng Jianping, director of its marketing and planning department, revealed that the company is actively seeking cooperation with Japanese Japanese car makers in Guangzhou. "Brand perception" has become a barrier to domestic sales In the post-market, from the end of July, South China Tire has signed contracts with 15 dealers. According to Feng Jianping’s prediction, before the end of the year, South China Tire will form alliances with hundreds of distributors to initially form a sales network. At the same time, Feng Jianping also admitted that in the past, domestic tire companies did not invest much in brand building. Now they can only do a good job of brand promotion. In the interview, the reporter also found that the survival environment of local companies in the domestic tire market is very harsh. The world’s top ten multinational companies with sales rankings have firmly occupied the domestic high-end market. The industry giants such as Michelin and Bridgestone have even extended their product lines to the mid- to low-end series. Some of the Korean brand's specifications are even lower than their own brands. Expert Opinion Low prices are double-edged swords In 2008, China was the country with the largest number of imported automobile tires in the United States. “We analyzed the past special cases of special parts and components, including fasteners, glass, tires and other special security cases. We found that the export volume of China’s parts and components was very large and concentrated in the period before the trade country proposed the special safeguard case. There is a certain threat to the survival of the enterprises in the exporting areas." Gasgoo.com Chen Wenkai summed up the laws of the special security cases in the past. In fact, Zhao Wenquan, director of the Technical and Economic Committee of the Rubber Industry Association, also felt that Chinese tire companies should also reflect on this. “Do we have a low-price strategy that disrupts the behavior of the market? Is there room for improvement in our quality, cost, management, and process advantages?†For tire companies, the current export model is a serious constraint on their development. On the one hand, China's export of tire technology content is low, if you do not rely on price advantage, it is difficult to enter the foreign market, and once you take the low-cost route, It is easy to wear a hat that is dumped. Setting up a factory directly abroad is a way out "If Chinese tire companies can go to Mexico and other places to set up factories to produce or assemble tires for export, they can enjoy the various benefits stipulated in the North American Free Trade Agreement, and they can also stimulate local economic development. The trade fortress encountered is naturally reduced,†said Geshang.com, according to Chen Wenkai, which is also a transitional path that some large companies should try. However, considering that Chinese companies lack international management experience, limited technology and gold content, foreign labor, and high cost of emissions, etc. This road is obviously more muddy. The basis for its success is that companies have excellent management experience and advanced technology levels after product upgrades. Industry consolidation is imminent In addition, Li Shengmao, an analyst in the investment industry's automotive industry, believes that the industry consolidation of China's tire industry is imminent. He put forward a concept that tire companies are now small and miscellaneous, and the general technical level is not high. In the future, they should be integrated into a group size and gain strength to compete with joint venture brands.
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