China Automotive Tire Industry
- ID: 220244
- April 2004
- Region: China
- 86 Pages
- China Knowledge Press
The remarkable progress of China’s automotive industry has culminated in the development of a significant tires subsector. Following China’s accession to the WTO in late 2001, the growth rates for both sectors accelerated. To fulfill its ambition to become the main base of operations for leading foreign auto companies, it is imperative that China develop a world-class tires industry.
In doing so, the country would become more attractive to leading automakers. Ready access to high quality tires would enable these companies to streamline their supply chains and purchasing operations while avoiding costly tires imports.
With an estimated value of nearly US$6 billion in 2002, China’s tires industry is large and poised for further high growth, bolstered by the rising fortunes of automobile manufacturers there. This industry is still largely driven by the multinational tire companies (eg. Michelin, Bridgestone, Goodyear and Yokohama) and their joint-venture partners, with Michelin alone accounting for 30% of the replacement tires market. Domestic players are relatively less skill-intensive, use simpler production techniques and have somewhat inconsistent quality standards. These domestic tire companies are also financially weak which explains their relatively lower investment in research and development facilities.
Although a considerable segment of the tires industry is concentrated in the Jiangsu, Shandong, Shanghai and Shenyang area, the domestic tires industry is still largely scattered across the country. This has resulted in a lack of cooperative synergies. Foreign multinationals, on the other hand, are more prone to cooperation in areas such as purchasing and research and development activities. For instance, Goodyear tires by purchasing a minor stake in Sumitomo tires, has taken steps to form a strategic alliance with its Japanese counterpart to share their marketing and purchasing operations.
The domestic companies owing to their lower investment in research and development also produced relatively obsolete products. Their production volumes also lagged that of their multinational counterparts. The average annual tire output of China’s domestic players in 2003 is approximately 410,000, considerably behind the 2.70 million produced by foreign tire companies in China.
To become a leading player in the global tire industry, it is imperative that domestic tire companies rectify these weaknesses by developing more sophisticated production techniques. China has also taken up steps to produce products that are higher up the value chain. For instance, the country is now encouraging the production of radial tires1 by promising the waiver of the 10% excise tax for radial tire products. Many domestic companies are also forming strategic alliances with multinationals to acquire greater expertise in production, distribution and marketing.
This market research report addresses issues of interest to investors, presents our main survey and research findings, and analyzes legal and production aspects. It concludes with a look at future developments in this key industry. A directory of useful contacts appears at the end. SHOW LESS READ MORE >
Part One Industry Outline and Analysis
Chapter 1 Introduction
Chapter 2 Strengths and Weaknesses
Chapter 3 Environmental Issues - Investment Opportunities in the Green Tire Market
Chapter 4 Forthcoming Developments in the Chinese Tire Industry
Part Two Automobile Industry Rules and Regulations (Domestic Tire Industry Included)
Part Three WTO Impact on Foreign Investment
Chapter 5 Background Information
Chapter 6 China’s Commitments to the WTO
6.1 The removal of tariffs and quotas
6.2 Abolition of subsidies
6.3 Trade related investment measures
6.5 Changes in Auto Sector Policies
6.6 Liberalization of Trading Rights
6.10 Financial Services
6.11 Insurance Services
6.12 Transportation Services
6.13 Warehousing Services
6.14 Maintenance Services
6.15 Freight Forwarding Sevices
6.16 Advertising Services
6.17 Testing and Maintenance Services
Part Four Main Companies
Chapter 7 Main Foreign Investor
7.1 Shanghai Michelin Warrior Tire Co.
7.3 Goodyear Tire and Rubber Co. Ltd.
7.4 Yokohama Rubber Co. Ltd.
7.5 Toyo Tire & Rubber Co. Ltd.
Chapter 8 Chinese Companies, Including Joint Ventures
8.1 Shandong Chengshan Tire Co. Ltd.
8.2 Shanghai Tire & Rubber Co. Ltd.
8.3 Shanghai Triangle Group Co. Ltd.
8.4 Hangzhou Zhongce Rubber Co. Ltd
8.5 Qingdao Rubber Group Co. Ltd.
8.6 Yinchuan CSI (Greatwall) Rubber Co. Ltd
8.7 Longkou Xinglong Tire Co. Ltd
8.8 Shandong Luhe Group Co. Ltd.
8.9 Guizhou Tire Co. Ltd.
Part Five Industry Forecast
Terminology and Industry Classification (Common Terms in China)
Tires and Quality Standards Terminology
Environmental Protection Policy (Abstract) - State Environmental Protection Administration, January 2002
The 10th Five-Year Plan - Section on Development of Environmental Protection (Source: Department of Resources Conservation, State Economic and Trade Commission)
China’s car bomb - Foreign Policy, Sept-Oct, 2002
Appendix 3: China’s Tire Companies
(b) Provinces and Autonomous Regions
Appendix 4: Useful Contacts: Government Offices and Trade Associations
i. State Economic & Trade Commission PRC
ii. Ministry of Commerce of the People’s Republic of China
iii. China Council for the Promotion of International Trade (CCPIT)
iv. China Association of Automobile Manufacturers (CAAM)
v. China National Automotive Industry Consulting & Developing Corp.
vi. China Rubber Industrial Association
- Shanghai Michelin Warrior Tire Co.
- Goodyear Tire and Rubber Co. Ltd.
- Yokohama Rubber Co. Ltd.
- Toyo Tire & Rubber Co. Ltd.
- Shandong Chengshan Tire Co. Ltd.
- Shanghai Tire & Rubber Co. Ltd.
- Shanghai Triangle Group Co. Ltd.
- Hangzhou Zhongce Rubber Co. Ltd
- Qingdao Rubber Group Co. Ltd.
- Yinchuan CSI (Greatwall) Rubber Co. Ltd
- Longkou Xinglong Tire Co. Ltd
- Shandong Luhe Group Co. Ltd.
- Guizhou Tire Co. Ltd.