Development and Prospect of
China's Tire Industry
Secretary-General of China Rubber Industry Association,
Xu WenYing
China Shanghai
May 28, 2015
Status of China’s tire industry - the overall situation
 China currently has more than 500 large and medium tire
business, among which 300 enterprises producing car tire
passed 3C certification
 In 2014, tire production quantity in China is 0.562billion
pieces, with an year on year increase of 6.2%.
 From 2001 to 2005, the average annual growth rate of tire
production was 12.1%; from 2006 to 2010, it was 9.2% and
from 2010 to 2015, 4.6%.
 Since 2005, China has been the largest country in the world
for tire production.
 There are 29 tire companies in mainland China ranked top
75 of the world’s tire enterprises.
Status of tire industry in China - the world’s largest
producer
2001
2014
Increase%
China
0.141billion pieces
0.562billion pcs
299%
America
0.246billion pcs
0.162billion pcs
-34%
Japan
0.162billion pcs
0.16billion pcs
-1%
Surpassed America
in 2005
Surpassed America
+Japan in 2008
Status of tire industry in China - the world’s largest
producer
1,The exports amount of China’s car tire in 2007 is 6.41
billion US$, which was larger than Japan’s amount of
6.094 billion US$ and made China become the world’s
largest tire producer.
2,The car tire export volume of China in 2014 was 14.5
billion with an increase of 125% compared with the
amount in 2007.
3, In recent 5 years, the annual exports amount accounts
for around 40% of the national output and a half of the
total world’s tire trade volume, which makes China
become the world’s major tire supplier.
Status of China’s tire industry in 2014
 In 2014, the overall situation of China's tire industry
features increasing production with decreasing sales
revenue, growing export volume with falling export value,
high inventories, low margins, insufficient capacity
utilization, and slowing pace in capacity.
 In 2014, the national tire production is 562 million pcs
with a y-o-y (same as below) increase of 6.2; among
which, the radial tire production is 511 million with an
increase of 7.3%, making up 90% of total production;
bias tire is 51 million pcs, down by 3.7%. Among radial
tire, steel tire production is 112 million pcs, which was
increased by 4.6%; and the semi-steel tire is 399 million,
up by 8.1%.
The status of main tire member in January-March of 2015
20
15.38
4.98
3.34
0
-20
-0.76
现价工业产值
-14.02
销售收入
-7.09
综合外胎产量
-15.32
出口交货值
利润
-17.17
-40
2014年一季度增幅%
9.25
2015年一季度增幅%
-37.06
Imports of New pneumatic rubber tire in JanuaryMarch of 2015
401110
Quantity (kg)
Amount (US$)
Price （US$/kg）
Year on year % of
Quantity
Year on year % of
Amount
Jan
5,144,471
39,547,354
7.69
-19.1
-19.8
Feb
4,862,134
36,553,727
7.52
7.9
5
Mar
7,013,864
50,990,997
7.27
-18.3
-19.7
From January to March, 401110 imports fell 12.5% compared with last year, and the price of 7.47US $ / kg
Quantity (kg)
Amount (US$)
Price （US$/kg）
Year on year
% of
Quanti
ty
Jan
536,765
3,298,641
6.15
-47.4
-60.1
Feb
533,525
3,177,627
5.96
-28.5
-16.4
Mar
687,360
4,357,387
6.34
-42.6
-41.9
401120
Year on year
% of
Amoun
t
From January to March, 401120 imports fell 40.7% compared with last year, and the price 6.16 of US$/kg
Exports of New pneumatic rubber tire in JanuaryMarch of 2015
401110
Quantity (kg)
Amount (US$)
Price （US$/kg）
Year on year %
of
Quantity
Year on year % of
Amount
1
137,433,237
421,850,423
3.07
-13.1
-21.6
2
109,104,496
324,771,680
2.98
14.4
-1.3
3
113,877,043
335,592,468
2.95
-24.3
-33.1
From January to March, 401110 exports fell 10.8% compared with last year, and the price of 3US$/kg
401120
Quantity (kg)
Amount (US$)
Price （US$/kg）
Year on year % of
Quantity
Year on year %
of
Amount
1
241,329,537
598,329,904
2.48
-1.9
-15.3
2
189,756,763
467,735,703
2.46
29.1
8.8
3
202,543,857
498,215,248
2.46
-19.8
-30.4
From January to March, 401120 exports fell 1.8% compared with last year, and the price of 2.47 US$/kg
Status of the tire industry in China－the achievements
Firstly, the rapid expansion of industrial scale
Secondly, the rapid adjustment of product structure
Thirdly, the simultaneous development of both markets
Fourthly, thanks to new advances in manufacturing technology ,
manufacturing of tire production equipment is basically
localized and has reached a certain technology level, and a
number of multinational companies have started to choose
equipment made in China.
 Fifthly, the increasingly diversified capital structure
The co-existence of state-owned, foreign-funded, private and
other forms of businesses have promoted the industry
development in various extents




Status of the tire industry in China－the achievements
The volume of tire production, exports and the number of enterprises in China all ranks
first in the world, and it has relatively completed tire industrial system. Except the natural
rubber primarily depending on imports, the raw materials of the tire industry including
synthetic rubber, carbon black and zinc oxide and other additives can be provided by
numerous factories in China. And for the steel frame materials such as steel wire, the
internal mixer, rolling machines, the molding machines and vulcanizing machines and
other rubber machines, the capability of our domestic manufacturers is quite impressive as
well.
Tire industrial
system
Rubber
material
Carbon
black
and
other
additives
steel
wire and
other
frame
material
s
Rubber
machine
s
Status of the tire industry in China－Gap with
international advanced level
From the global perspective, China’s tire industry can be regarded as large while not strong, the market image
of overall brand is low-end with low degree of internationalization, no world-class brands, low technology content,
severe product homogeneity as well as low-level redundant construction, industrial concentration not high, low
resource utilization, and excessive consumption of social resources.
P
r
i
c
e
i
n
d
e
x
Three giants
Affiliated brands of these three giants ,
Continental , Pirelli and other brands
Korean enterprises
Chinese
enterprises
Reputation
among
customers
Status of the tire industry in China－ Actual Problems
1. Insufficient capacity utilization
2. Low average industry profit margin, only about -4%, far
lower than the 15% profit margin of the well-known
brands.
3. Lack of R & D investment, insufficient innovation
4. Relatively serious product homogeneity
5. Sales channels lack of innovation
6. Natural rubber heavily dependent on imports while tires
depending on exports
7. Primarily replacement tires and small proportion of
original tires
Status of China’s tire industry-reasons for the current
problems
Firstly, gap in terms of products
Secondly, gap in terms of brand level.
Thirdly, gap in terms of development mode
Fourthly, gap in terms of industrial quality system
Fifthly, gap in terms of innovation capability
Sixthly, gap in terms of industrial concentration.
Seventhly, gap in terms of circular economy model.
Eighthly, gap in terms of technical regulations and standards.
Ninthly, gap in terms of business philosophy.
The main challenge of tire industry in China
1,the conflict of product’s structural surplus is tremendous, and
redundant construction at low levels has not been
fundamentally prevented.
According to the incomplete statistics, China has newly added the
production capacity of 15 million steel tires and 100 million
semi-steel tire in 2013, and 15 million steel tires as well as
150 million semi-steel tire in 2014; the product homogeneity
and business convergence becomes more severe with scarcity
of high-end products, surplus of low-end products, technology
products with low added value, disorderly industry competition
as well as significant drop of sales revenue, which dramatically
influence the sustainable development of enterprises.
The primary challenges of tire industry in China
2, Low tire industry concentration, and lacking of international
competitiveness.
Taking the world’s top 75 enterprises in tire industry in 2014 as the
example, the sales revenue of these companies is of &179.5
billion total, and four enterprises’ sales revenue is more than
$10 billion, that is Bridgestone, Michelin, Goodyear,
Continental respectively. And the sales revenue of these four
companies is about $81.7 billion, accounting for 46% of the
total 75 companies ‘ sales revenue. And the top 10 Chinese tire
companies are listed as follows, Zhongce, Triangle, Linglong,
Double coin, Hengfeng, Xing Yuen, AEOLUS,Jinyu, Shengtai
and Guilun; and their total sales revenue is $18.8 billion,
accounting for 10% of the total 75 companies’ sales revenue,
which is only $1.2 billion more than Goodyear’s,the company
ranking the third,$17.6 billion and far lower than Bridgestone’s
and Michelin’s, $ 27.4billion and $25.5 billion, ranking the first
and second respectively.
。
The primary challenges of tire industry in China
3,Weak innovation capability of the enterprises, lacking of
brand value.
Taking tires with the same specification as example, the
Michelin tire’s price, due to its brand influence in the
market, normally is 20% higher than the average tire
price in the market.
4, There is more and more trade friction, which affects the
export and production of the enterprises.
5, Standard adjustment of the composite rubber and
increase of the import tariffs of the natural rubber
severely affects the development of Chinese tire industry.
The opportunities of Chinese tire industry
1,The automobile industry offers tremendous demand power for the
development of the tire industry
Year
Total
2015
ownership
（10000 pcs）
Car ownership （10000 pcs ） Commercial
vehicles’
ownership (10000
pcs)
Average ownership of every
1000 people (10000
pcs)
15356
11340
4016
118
2016
17418
13003
4415
134
2017
19509
14715
4794
150
2018
21633
16479
5154
166
2019
23794
18303
5491
183
2020
25996
20192
5804
200
In accordance with the data of 812 for average ownership of every 1000 people in America,
634 in Germany,and 589 in Japan, China's auto industry and the tire industry at least
preserves 10-15 years of golden development under the conservative estimate.
The opportunities of Chinese tire industry
2,The introduction of ‘Proposals on tire industry’ will curb the blind
development of the tire industry
 On September 17, 2014, the MIIT released the ‘Proposals on
tire industry’ and further highlighted the rigid quotas including
green, environmental protection, energy conservation, energy
requirements to encourage the enterprises to upgrade and
optimize on aspects including product performance, production
processes, reduce energy and resource consumption and
eliminate backward production capacity.
 The effective implement of these policies will play an active
role in guiding and promoting to eliminate backward production
capacity, regulate the market and upgrade the industry.
The opportunities of Chinese tire industry
3,’ Green Tire Technology Specification’ and other industry self-regulatory
rules will enhance the technological level of China's tire industry
 The ‘Green Tire Technology Specification’ developed by China Rubber
Industry Association had been officially implemented in the industry on
March 1, 2014, which is China’s first green tire industry self-regulation
standard. Its release laid solid foundation for China’s next move on tire
labeling. Developing green tires and promoting the industrialization
process of the green tire is the most important direction of realizing
the adjustment of product structure and corporate restructuring and
upgrading.
 China Rubber Industry Association had also set up the "green tire
industry work promotion commission“ as well as a "green tire
technology service center" to implement the service on promoting the
green tire industry technology and technical standards of green tire
labeling system as well as grading procedures and other works. These
efforts will accelerate the technological progress and upgrading of
Chinese tire products.
The opportunities of Chinese tire industry
4, The construction of tire test site has made substantial progress, which
provides a test basis for the development of the tire industry
 Tire testing site is not only an important testing means on application of
new technologies and new product development, but also one of the
important symbol reflecting national production level and tire
development level. Without tire test site, the outdoor test means is not
complete, thus many underlying data on tire applications are not
available; on the one hand it is difficult to enter the automobile
accessory market, on the other hand, it is very negative for export
(especially the EU) as well.
 At present, with the smooth construction of Central Asia and Yancheng
automobile tire test site (tires), it is expected to be used before the end
of 2015, which will provide test basis for the new product research and
development.
5、The implementation of “one belt and one road" and "Made in China 2025"
and other policies.
2015 Tire Industry Forecast
 In 2015, the national tire production is 0.587 billion pcs
with an increase of 4.2%; and among which, the radial
tire production is 0.534 billion with an increase of 4.6%,
and the rate of the radial tires is 91%; bias tire is 51
million pcs, which will be increased by 3.9%. For the
radial tire, steel tire production is 116 million pcs, with
an increase of 3.6%; and the semi-steel tire is 418
million, with an increase of 4.8%.
Future demand forecast on Chinese radial tire
Year
Car radial tire（10000 pcs） Truck radial tire（10000 pcs） Total(10,000 pcs）
2016
41879
12312
54191
2017
43814
12811
56625
2018
45838
13476
59314
2019
47956
14098
62054
2020
50172
14749
64921
Thanks！