Industry News
Chinese tire giants expanding capacity quickly
Source:China National Tire&Rubber Corporation Date: 2011-12-08

Output and sales of Chinese automobiles exceeded 18 million vehicles in 2010, putting it in top place in the world. Data from the end of Aug 2011 show that China had 219 million motor vehicles in service, 100 million of them automobiles. The Chinese auto industry's rapid growth has directly fueled the tire industry's development and China had more than 440 tire producers by the end of 2010. It had produced 776.34 million tire casings, up 19.8 percent year-on-year. Then, in the first half of 2011, tire industry growth slowed a bit, but predictions are that tire output growth may still reach 6 percent for the year.

China's huge market potential has naturally attracted the global tire giants, and the global top 10 all have plants in China. Companies such as Michelin and Bridgestone did not slow their investment in the China market in spite of some tire protection legal cases. Michelin spent 1.4 billion dollars in 2010, increasing investment in its Shenyang plant and began talks with the Shanghai Huayi (Group) Co and Double Coin Holdings Ltd, in 2011, on establishing a joint venture. The Dalian plant of the United States' Goodyear Co spent 500 million dollars on a commercial vehicle tire production line. In Chongqing, Korea's Hankook Tire began work on its third China plant in Dec 2010, mainly for passenger car tires and truck and bus tires. Total spending on it is $950 million. Predictions are that the plant will complete construction work and go into production by the end of 2015.

A chemical industry analyst from S&P Consulting pointed out that the expansion of foreign-funded companies in the Chinese market was a result of the tire market boom here over the past two years, and led to the fierce competition in China's domestic market, which has also prompted local tire producers to increase production and raise their technical level of production.

China also introduced policies related to developing the Chinese tire industry, increasing its competitiveness, and improving product performance. In Sept 2010, the Ministry of Industry and Information Technology's (MIIT) Tire Industry Policy said that, by 2015, the rate of radial tires usage for passenger car tires would have to reach 100 percent, for light trucks, 85 percent, and for heavy trucks, 90 percent.

According to the S&P Consulting report, although growth in the Chinese auto industry is slowing down, the country's vigorous approach to new energy automobiles may still bring considerable profits for the tire industry.

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