Description
According to applications, the demand of tires can be classified into OEM demand in vehicle manufacturing and replacement demand in automobile after-market. In developed countries, due to the high market saturation in automobile market, the sales of tire are mainly from after-market. According to CRI, in 2016, the production volume of tires was about 1.71 billion in the global market, increasing slightly compared to 2015. It is estimated that from 2017 to 2021, the CAGR of global tire production volume will remain at 1% and emerging markets become growth drivers.
Since 2000, China’s automobile industry has been developing fast. From 2009 to 2016, China was the world’s largest automobile manufacturer and the largest sales market for 8 years. Meanwhile, China was also the world’s largest producer and exporter of tires. In 2016, the production volume in China reached 946.98 million, up by 2.36% YOY. With the increasing production volume and reserve volume of automobiles, the demand for tires is rising in China’s domestic market. Because of huge cost advantages of Chinese tires, since 2000, the export of tires also presented an upward trend in China. In 2016, the export of automobile tires in China was 468.48 million, up by 5.4% YOY. Due to increased export volume of Chinese tires, many Chinese tire enterprises are confronted with trade disputes such as anti-dumping investigation. However, in general, the export volume still presents a rising trend because of huge cost advantages.
China has established an integrated industry chain of tire. In China, except for natural rubber which mainly relies on import, other raw materials of tire such as synthetic rubber, steel cord and carbon black can be produced by a great number of manufacturers in China. Chinese enterprises are also strong in producing tire molds and manufacturing machines.
Attracted by low production cost and huge market demand of the tire industry in China, major multinational tire enterprises have entered the Chinese market and regard China as the key global production base. At present, over half of China tire market is occupied by foreign-funded enterprises. Besides, foreign-funded enterprises dominate the high-end market in China. The profit margin of them is twice or even more than twice that of Chinese enterprises.
According to incomplete statistics by CRI, by the end of 2016, the number of tire manufacturers had been over 550 in China. Most of the domestic tire enterprises are characterized by a small size and weak strength. With the development of the economy and the capital market in China, Chinese enterprises have started to make overseas acquisitions of tire enterprises.
Chinese automobile industry develops rapidly after joining WTO, which promotes the development of the automobile tire industry. In 2016, the production volume of automobiles was 28.119 million, up by 14.5% YOY. The sales volume was 28.028 million, up by 13.7% YOY. Meanwhile, the automobile reserves are also increasing. By the end of 2016, civil automobile reserves reached 194 million, a huge contrast against the number of 24 million in 2003. The increased production volume and reserve volume of automobiles in China stimulate the demand for automobile tires.
Although China has become the world’s largest automobile market for 6 years since 2008, car ownership per capita remains at a low level. In 2016, the automobile reserves were only 140 per thousand, far lower than the 600 to 800 per thousand in developed countries. It is estimated that in the next few years, China’s annual economic growth will remain at over 6%. The production and sales volume will grow at about 5% a year. Additionally, the market demand for tires will keep rising. In China, the demand for replacement tires in automobile after-market will take up a larger proportion in the tire market.
Due to integrated upstream and downstream industry chains and low environmental expenses, China’s tire industry possesses huge advantages compared to other developing countries, such as India. CRI has analyzed that in the next few years, the domestic demand and export of China’s tire industry will continue to rise. Currently, though China’s tire enterprises are faced with problems including higher environmental requirements, overcapacity and increasing labor cost, there is still much room for development. Chinese government’s support also indicates good prospects for the development of China’s tire industry.
Readers can obtain the following information or more through this report:
– Overview of Global Tire Industry, 2012-2016
– Analysis on Development Environment of Tire Industry
– Analysis on Production and Demand in China Tire Industry, 2012- 2016
– Analysis on Major Raw Materials of China Tire Industry
-Competition Status of China Tire Industry
-Analysis of Major Foreign-funded and Domestic Tire Manufacturers in China
-Analysis on Import and Export of Tire in China
-Trade Barriers against Tires Exported from China
– Favorable and Unfavorable Factors in China Tire Industry, 2017-2021
-Forecast on Supply and Demand of China Tire Industry, 2017-2021
-Investment Opportunities in China Tire Industry
