Looking back at the 2012 tire companies to replace the tire market

Replace tire market in China, the major tire companies seem more and more "crazy."

One of the most representative companies is Kumho. In 2012, the company made frequent efforts in the after-sales market in China to continuously show its customers well in order to obtain a “birth” in replacing the tires. The company that secretly laid out this market is far more than the Kumho family.

This is evident from the rapidly expanding retail channels of various companies. It is understood that from 2009 to 2012, Giti's service stations in the domestic market, from scratch, quickly expanded to close to 1700; in the month of April 2012, the brand Tire Tire had built 1680 authorized stores; Michelin Bridgestone and others are also working to improve the after-sales service system and build retail channels.

120 million and "crazy"

The “crazyness” of domestic tire companies is closely related to the huge market potential of replacement tires . In the exchanges between reporters and enterprises, this view has been recognized by many people in the industry.

How large is China's replacement tire market?

The demand for replacement tires is directly related to car ownership. It is understood that China’s car ownership has reached 114 million in 2012, and the demand for replacement tires can be imagined.

In response to the demand for replacement tires, the specific data provided by relevant persons in the company was 120 million pieces, which was recognized by Dr. Cao Kechang, Vice President of Cooper Tire. Cao Kechang also estimates that the replacement of the fetal market "will maintain an increase of 10% to 12% per year" based on data available to her.

The demand for 120 million pieces, and the average annual growth rate of over 10%, are definitely worth the “crazy” of tire companies.

The market is in the "fight" period

Regardless of which industry, the Chinese market seems to be more "flesh" than "wolf." The same is true of the current situation of the replacement tire market.

It is understood that currently in the country to replace the tire business, there are more than 30 in the list, there has not been a single situation.

According to known data, the mid- to high-end replacement tire market is doing better Michelin, its share is less than 10%; with the price advantage to seize the low-end replacement tire market, Jiatong shares 7%-8%. It is difficult for other companies to compete with these two companies.

Cao Kechang believes that this is because China's replacement tire market is still in the "mixed war" stage and is still immature. The market share rankings of various companies are also relatively unstable and will change at any time.

It is reported that in the mature markets for replacement tires in Europe and the United States, the degree of concentration is high, and basically the top four to five companies will account for more than 60% of the market share. China is still far from this level.

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How to get around

An industry from decentralized to concentrated, is the inevitable result of marketization. The future of China's replacement tire market will also follow this path. But in the end what kind of company can kill a "blood" and become lucky "top five"?

For this issue, Cooper tires that target “replacement tire specialists” obviously have more say. Cao Kechang told the Tire World Network that companies that may "survive" need to have at least 3 conditions.

First of all, the company’s R&D capability is not enough. Cao Kechang believes that tires are a kind of products with relatively high technical requirements and rapid changes. The level of research and development and the speed of replacement will be the only way for companies to keep pace with market demand.

Second, the company's production efficiency is not high. It is understood that the profits of tires in the domestic market are relatively thin. Under normal circumstances, companies such as Cooper, if the operating rate does not reach 80%, they will almost lose money. Therefore, Cao Kechang stressed: "Efficiency is very important. If a company is not profitable, it will eventually be eliminated by the market."

In addition, it is also important whether the expansion model is rational. According to Cao Kechang's analysis, the company's expansion of production involves staff preparation, training, investment in marketing and marketing, preparation of venues, factories, and equipment. If companies do not have a good control of the market, these inputs may be "flooded" overnight.

At present, the industry has repeatedly talked about replacing the tire market, and it is inevitable that this market will mature, but there is still a long way to go before it. In the "melee", it is not yet known who the Lord is floating up and down.

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