International Tire Giant Rio Tinto China Market

Recently, Berger, president of Asia Pacific Region, said: “In 2014, we will build the largest Pirelli manufacturing base in Luzhou, Shandong. From 2012 to 2014, we will invest US$200 million in China’s world’s largest automotive tire market.”

This is another move by developed countries' auto tire companies to expand the Chinese market.

With the rapid development of China's automobile industry, China, the world's largest developing country, has become the largest car tire market in the world, and has become a huge fat for developed country car tire companies. Therefore, the automobile tire companies in the developed countries have made great efforts to enter the Chinese market, and they have become more and more powerful.

Scrambling

Due to the temptation of the broad development prospects of China's tire market, tire companies in more than 10 developed countries and regions, including the United States, France, Japan, Germany, Italy and South Korea, scrambled to enter the Chinese tire market.

Since 1993, many key enterprises in the domestic tire industry with an annual output of more than one million tires have been successively controlled by large multinational tire companies.

In recent years, China has become the fastest growing tire market in the world, and its market size accounts for about 10% of the world's tire market. As a result, the new wave of expansion of tire companies in developed countries in China has risen. For example, Michelin in Shenyang, Dongyang in Zhangjiagang, Sumitomo in Changsha, Bridgestone in Huizhou, Germany in Hefei, new plant or expansion.

At present, Michelin's factories in Shanghai and Shenyang have a total annual capacity of 8 million. In 2015, Michelin China's total annual production capacity is expected to approach 20 million.

The profit of replacing the tire market is usually more than twice that of the original market. After five years, China’s car ownership is expected to double, and the growth in demand for replacement tires will at least be synchronized with the Chinese auto market. According to the French Michelin strategic plan, for a long time in the future, Michelin still maintains the ratio of replacement tires to 70% of its total tire sales in the Chinese market.

The Italian car tire company Pirelli Group carefully selects suitable geographical locations and experienced partners in China, and focuses on building its sales and service network to ensure that users enjoy high-end services in order to occupy a place in the rapidly growing Chinese automotive replacement tire market.

Not long ago, the person in charge of Pirelli said: "The Pirelli sales and service network in China is gradually being established and improved."

People in the industry are aware that this 100-year-old Italian tire manufacturing company is gradually shifting its strategic focus to China and is beginning to aggressively enter the Chinese automotive replacement tire market.

In April 2010, Pirelli officially introduced its product line to the Chinese market.

“We are constantly deepening our understanding of China’s road conditions and actively exploring the Chinese tire market. Pirelli tires will win honors in China.” The responsible person of Pirelli once vowed.

Pirelli plans to double its production capacity at its Luzhou, Shandong, plant by the end of 2014 and achieve an annual output of 10 million tires.

South Korea's Kumho Tire Co., Ltd. has established tire factories in Nanjing and Changchun.

Kumho provided supporting equipment for Shanghai GM and Beijing Hyundai Motor Company, and established five marketing departments in China. It established offices in Shanghai, Nanjing, Hangzhou, Guangzhou, Chengdu, and Shijiazhuang and established more than 300 dealerships. A large sales network of business and more than 5,000 distributors.

In April 2006, Kumho established its China sales headquarters in Shanghai and achieved separation of Kumho tire production and sales. Its annual sales exceed 6 billion yuan.

Kumho's annual production scale in China now exceeds 30 million tires. The person in charge of Kumho said: “For a multinational automotive tire company, if we lose the Chinese market, there will be no future. Therefore, serving Chinese consumers is our most important job. Kumho strives to become the first tire brand in China. We are constantly improving the market share of Kumho Tire in the Chinese market."

2013 was a breakthrough year for Bridgestone to seek a higher level of development in the Chinese market.

The person in charge of Bridgestone (China) Investment Co., Ltd. stated: “The Bridgestone Group has a global quality assurance system. On this basis, we have developed more detailed individual quality assurance standards in accordance with the characteristics of the Chinese market. Location provides Chinese consumers with qualified products.”

High-end tire market in China

Continental tire companies such as Michelin, Bridgestone, Yokohama, Goodyear and Dunlop have established wholly-owned or holding companies in China. These companies dominate the high-end tire market in China.

On January 26, 2013, Michelin's new Shenyang plant with a total investment of nearly US$1.5 billion was officially put into operation. This is Michelin's largest investment in China. The new plant products include passenger car tires, passenger car tires and truck tires, with an annual production capacity of more than 12 million. Sunard, president of the Michelin Group, said: "100% of tires produced in the new plant are high-performance tires."

More than 60% of Michelin China's products are used to attack the high-end market.

The high-end tire market is attached to the high-end car market, and the entire vehicle market continues to introduce high-end models, causing consumers to gradually increase their awareness of tires. As a result, ultra-high-performance tires are getting more and more attention from Chinese consumers.

Market opportunities are the biggest driving force for business expansion. Wan Nengyi, president of Michelin (China) Investment Co., Ltd., said: "The demand for the Chinese market is strong for car tires with all-round performance in terms of energy saving, safety, comfort, fuel economy, and durability. With the Chinese market demand for energy-saving and environmentally friendly tires As for the rise, Michelin expects 100% of all tires to be green tires by 2020."

According to the survey results of the State Administration for Industry and Commerce, France’s Michelin accounted for 70% of China’s radial tire market.

In 2005, Pirelli and Shandong Yinhe Group established a joint venture radial truck tire factory in Luzhou, Shandong. Its maximum design annual production capacity exceeds 1.2 million tires, mainly for China National Heavy Duty Truck Group supporting. Pirelli is the first international tire brand to set up a tire factory in Shandong Province, and more than 35% of China's tires are produced in Shandong.

At the end of 2007, the Pirelli Group established its second plant in Shengzhou, Shandong, to formally produce high-performance passenger car tires. This is the beginning of the second round of expansion plan of Pirelli Group in China.

Pirelli hopes to occupy a double-digit market share in the high-end automotive tire market in China.

In 2012, Bridgestone introduced many high-tech tires that incorporate advanced technology concepts into China. This is Bridgestone’s “heavyweight” move to fully popularize high-tech green tires in the Chinese market.

From the beginning of July 2012, he is the chairman and general manager of Bridgestone (China) Investment Co., Ltd., said: "All our corporate activities pursue the highest quality. In Chinese society, we uphold the highest quality concept and provide Reassuring car tires."

Under the guarantee of strict quality management system, Bridgestone accelerates the development of high-end tire products.

Endangering the safety of China's tire industry

The tire industry is of strategic importance. Without tires, cars (especially armored vehicles) cannot travel and the aircraft cannot take off and land. The developed countries such as the United States, Britain, Japan, France, and Germany have spared no effort to develop the tire industry while actively developing industries such as automobiles and aerospace. The main raw rubber used in tire production was once classified as an embargo strategic material by developed countries.

In the developed countries, auto tire companies strictly rely on their key technologies while relying on their strong technical strength to nibble on the Chinese tire market. As a result, China gradually lost autonomy over the development of China's tire industry and endangered the safety of China's tire industry.

Tire enterprises in developed countries are also vigorously developing tire circulation channels in China and have opened many specialty stores or franchised stores.

Distribution channels can control industrial lifelines. If the relevant domestic departments allow industrial companies in developed countries to occupy the tire circulation channels, then the Chinese tire companies will become processing plants for OEM products of tire circulation enterprises in developed countries.

China's own brand automobile tire companies lack brand awareness and quality awareness, and they lack the economic strength to create world famous brands.

In the fierce competition in the international market, Chinese auto tire companies must learn from tire companies in developed countries, establish a modern enterprise system as soon as possible, increase brand awareness, and strive to establish a famous brand of Di Shu brand, continue to expand its strength, and increase its influence.

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