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CHINESE TYRES
The team from Boto tyre at the Reifen exhibition in Germany. The Boto brand is sold in the UK by Bandvulc
answers: Good life; low price, decent resale value on the carcass and maybe some better fuel economy.
They take that knowledge and feed it back to their engineers and come up with products more suited to the different markets around the world. It's a strategy that has been working for GT Radial (GiTi) and a few other companies. Their prices are a tad higher than most run- of-the-mill Chinese-made tires. It's usually worth paying the
extra for tires designed for your applications.
No-one is pretending that any of the four hundred or so tyre manufacturing companies in China has the same expertise as the engineers at Michelin.
They don't. Not by a long way. But their engineers do know how to make a carcass that resists sidewall impacts. And they can make them cheap.
So if you are looking to use Chinese tyres, then see if the sales rep asks what kinds of
vehicle you are using; the kinds of load and the type of route. If, based on your answers, they have different types of tires to suit different customers, then you can be pretty sure that the tires have been designed for a specific application – and maybe even for UK roads.
If it all stacks up, then personally, I'd give them a shot on a couple of vehicles. You can often get a better price by offering to compare the mileage and fuel economy of the Chinese product against your existing provider and passing that data to the Chinese supplier.
On the other hand, if they just want to shift volume by quoting a low price and hoping that one tire model fits all, then you may find it is a false economy. Personally I'd steer clear of them. Premium tire makers have a lot more technology at their disposal than the Chinese companies. A premium tire will be lighter; use less material than a Chinese product. They achieve that by lots of computer- modelling during the design
phase.
Premium tyres last longer and can be retreaded, so the carcasses have a higher resale value. That's because the engineers know how the rubber interacts with the steelcord within the tire. They use that knowledge to keep water from getting into the steelcord and causing rusting and fretting.
You won't get a lot of that from the Chinese-made tyres. But the price is a lot lower.
In the end, you pays your money and makes your choice.
But think on this fact. By the end of 2014, the total capacity for making heavy truck tyres in China will be about 150 million units per year.
Total global demand for new heavy truck tyres in 2014 was 150 million units, near-enough.
Tire Industr y Research will publish a major research report on the tyre industry in China by the end of 2014. See www.ChinaTireReport.com for more information
year China makes passenger tyre and light truck tyre exports to the USA, accounting for 50% of the total tyre exports. Once the USA makes anti-dumping and anti-subsidy measures, it is expected to have a huge impact on the China tyre industr y.
How to deal with the three pressures is a major challenge for the Chinese tyre industr y. First, the Chinese government needs to take measures to stabilise rubber prices, such as increasing the purchasing and storage of natural rubber, the establishment of commercial purchasing and storage mechanisms, establishing a stabilisation fund of natural rubber, etc. Secondly Chinese tyre manufacturers need to upgrade their tyre products, make green tyres and high performance tyres. Thirdly, the Chinese tyre companies unite to deal with the anti-dumping and anti-subsidy actions and open up new markets outside America.
Hard Times for Chinese Tyre Industry
By Carol Liang, China Correspondent
The Chinese tyre industry showed substantial optimism in 2013, and during the first quarter of 2014, the industry was stable. However, due to a multitude of pressures, the market situation deteriorated after May, and is expected to become worse during the second half of 2014.
The first pressure is from rubber prices. Since last year NR and SR prices have remained low, which have been a serious blow for Chinese tyre prices. In the first half of 2014, China's tyre prices fell by a total of 20% and continue to show a downward trend.
In addition, several international tyre manufacturers in China recently finished their first half year’s sales target and began to discount tyre prices within the Chinese market, which led to the price of China made tyres decline even further. It is expected that in the second half of this year the gross margin of Chinese tyre companies will
significantly reduce.
The second pressure is from excess capacity and high tyre stocks. In 2013, optimism in the Chinese tyre market stimulated a group of blind investments, resulting in a serious overcapacity situation within the industry. According to statistics from the China Chemical Equipment Association Rubber Machinery Committee, in 2013 China's new truck and bus production capacity was 15 million units, and new passenger tyre capacity was 100 million units. In 2014 new TBR capacity and new PCR capacity will be 15 million units and 150 million units , respectively. As a result, the overcapacity in small and medium sized tyre manufacturers is expected to lead to capacity utlisation of less than 70%.
In addition, because NR prices were low, many Chinese tyre companies increased tyre production at the beginning of 2014 and the end of 2013,
improved their tyre stocks. As a result tyre stocks are currently standing at about a month and a half, about 50% higher than normal. Chinese tyre makers expect tyre sales to flourish in the second half on the year, but, as a result of the current situation, the market is not optimistic.
Overcapacity and high tyre inventories are expected to react on Chinese tyre prices. Even if there is some growth in tyre sales, it is difficult to foresee positive growth in tyre sales value.
The third pressure comes from the American United Steelworkers (USW) anti- dumping and anti-subsidy investigations. On 3th June 2014 USW made a request to the U.S. Department of Commerce and the U.S. International Trade Commission to start anti-dumping and anti- subsidy investigations with regards to passenger and light truck tyres from China. Each
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