Page 20 - CTB N12 - 2015-04

Richard Li (photo: Gummibereifung)
INTERVIEW
Interview: Richard Li –
Westlake Tyres
However, the Chinese market is still growing at around 5% per annum, which means it is still relatively easy for us to achieve our sales growth targets in the domestic market.
In the domestic market we’ve traditionally focused on construction and tyres for heavy loads. We are currently expanding our coverage into the highway, standard load and high- speed tyre sectors. We are also developing our dealer networks and sponsoring them to offer breakdown services. We are confident about our position in the Chinese market.
CTB
But what about overseas markets?
RL
In the future we will be looking to grow more in international markets. Overall our plan is to reach total production levels of 18 million tyres per year within the next 12 months. We expect most of this growth to come from overseas markets.
CTB
18 million tyres is an ambitious short term target. That calls for significant growth on an international basis. If you achieve it you will be breathing down the necks of the top two manufacturers in the commercial vehicle sector, Bridgestone and Michelin.
RL
Yes, we are aware that we have set a tough target, but we will try to achieve it. In many markets our share is only 2-7% so confident that if we have the right products there is plenty of scope for growth. But having the right distribution is also vital. We are looking to expand step by step. We believe the truck tyre market in North America and Europe is still growing by 2-3% per annum, which is a large quantity.
CTB
The prevailing view is that there is massive overcapacity in the Chinese new tyre industry and that this will ultimately impact on many manufacturers. How does this scenario fit in with your growth plans?
RL
To be honest, with regards to the Chinese manufacturers, we do not see an overcapacity for the best known brands, so we don’t believe their potential is exhausted. We have to admit that the quality of many Chinese tyres is not so good, but they are improving. For most Chinese manufacturers they need to prove branding and service. We believe the smaller ones with low quality will disappear after which the market will be stronger.
CTB
What is Westlake doing to invest in improving its position globally?
RL
At the moment we are not investing much in capacity but are investing a lot in tyre development and in product testing. We used to have a standardised product range, but we have invested heavily in developing different products for different regions. More variety and choice, of course, costs money but we that this is the right way to develop our business and this has helped improve the value provided by our products.
In future we will invest more in service. We have already set up offices in North and South America and will also set one up in Europe through our agent, Zenises.
We also plan to set up local R&D centres. We have worked together with TuV for Europe and in North America we are also looking for opportunities to set up a joint R&D facility. Local R&D will be important for future product development.
CTB
What is your policy with regards to developing your position in the retreading market?
RL
We are very committed to developing our position in the retreading market and have had a plant attached to our TBR plant for 3 years. We have also set up a plant for retreading research and are trying to find own technology for retreading. In the future our plan is to launch our own retread technology with our own brand. This will help support our export market share. However,
The Westlake brand of truck and bus tyres is manufactured by Zhongce Rubber Group, based in the Chinese city of Hangzhou, famous for Longjing tea and the freshwater lake after which the company’s flagship tyre brand is
Richard Li
Today we make 10 million truck and bus tyres each year for the domestic Chinese market and around 3 million for international markets. This
named. With annual truck tyre sales in the region of 13 million units, Zhongce Rubber is now the largest truck tyre manufacturer in China and is vying with Goodyear for third position worldwide. Whilst we were in China recently for the Citexpo tyre show, we took the opportunity to travel to Hangzhou to interview Richard Li, GM Assistant Marketing Director, who revealed that the company has some ambitious goals for its growth within the global truck and bus tyre segment.
Commercial Tyre Business
Could you please begin by summarising where Zhongce Rubber currently stands in the Chinese truck and bus tyre market and where the company aims
to be?
makes us the third or fourth biggest truck tyre manufacturer in the world.
In recent years we have been able to take advantage of our strong position in the Chinese market where international brands have suffered difficulties, not only because of price, but because of distribution, which is different to the PCR sector. Our size has meant that we have been able to develop our product range to target individual segments within the truck tyre market. This is important because, although China consists mainly of owner drivers, this is gradually changing and fleets are beginning to emerge. This is something we will have to deal with as a manufacturer.
In China, we have a 19% share of the market and can boast a market leadership position.
20 Commercial Tyre Business