Since 2000, China’s automobile industry has been developing fast. From 2009 to 2016, China was the world’s largest automobile manufacturer and the largest sales market for 8 years. Meanwhile, China was also the world’s largest producer and exporter of tires. In 2016, the production volume in China reached 946.98 million, up by 2.36% YOY. With the increasing production volume and reserve volume of automobiles, the demand for tires is rising in China’s domestic market. Because of huge cost advantages of Chinese tires, since 2000, the export of tires also presented an upward trend in China. In 2016, the export of automobile tires in China was 468.48 million, up by 5.4% YOY. Due to increased export volume of Chinese tires, many Chinese tire enterprises are confronted with trade disputes such as anti-dumping investigation. However, in general, the export volume still presents a rising trend because of huge cost advantages.
China has established an integrated industry chain of tire. In China, except for natural rubber which mainly relies on import, other raw materials of tire such as synthetic rubber, steel cord and carbon black can be produced by a great number of manufacturers in China. Chinese enterprises are also strong in producing tire molds and manufacturing machines.
Attracted by low production cost and huge market demand of the tire industry in China, major multinational tire enterprises have entered the Chinese market and regard China as the key global production base. At present, over half of China tire market is occupied by foreign-funded enterprises. Besides, foreign-funded enterprises dominate the high-end market in China. The profit margin of them is twice or even more than twice that of Chinese enterprises.
According to incomplete statistics by CRI, by the end of 2016, the number of tire manufacturers had been over 550 in China. Most of the domestic tire enterprises are characterized by a small size and weak strength. With the development of the economy and the capital market in China, Chinese enterprises have started to make overseas acquisitions of tire enterprises.