The domestic tire industry is deteriorating ecologically

The Indian Tyre Industry Association recently stated that it will submit an anti-dumping litigation application to the Chinese government for tires originating in China within one month. Although the total amount of tires exported to India by China is not large, it has actually reflected some common problems in China's tire exports. In fact, the disorderly competition in China's tire exports is intensifying and the price war is becoming fiercer. Coupled with the unfavorable factors caused by policies and markets, the survival conditions of some large tire exporters are deteriorating.
Deterioration of the ecology Since the beginning of this year, tire companies have generally felt the pressure of survival, and this pressure has come from the market level, but also from the national macro-policy level.

According to Ni Hongzhen, director of the China Rubber Association, China's tires are mainly exported to Europe and the United States. As most countries in Europe and America produce radial tires, they leave a certain market space for biased tires with lower technical content. “Our tire exports actually have a kind of role in supplementing shortages, and they can generally maintain 8% to 10% annually. growth rate."

At present, there are mainly three ways to export tires: the first is the direct export of production companies, the second is the acquisition of foreign trade companies first, and then sold to overseas markets; the third is the direct sale of agents by some dealers. “Because there are many export channels and the price system is chaotic and blind competition for prices is inevitable,” Si Hongzhen emphasized: “In particular, some foreign trade companies do not hesitate to reduce the quality of their brands in order to reduce costs. The gap in the export prices of similar products is as high as 100 yuan. ."

According to Tan Yukun, Secretary General of the Tire Industry Branch of the Rubber Industry Association, the prices of exported tires, especially bias tires, are getting lower and lower. In the 1980s, the price of natural rubber was more than 6000 yuan/ton, and a set of 9.00-20 tires could sell for more than 90 US dollars; but now the price of natural rubber per ton exceeds 13,000 yuan, while the same set of tires only sells more than 40 dollars. Raw material prices have doubled, and export tire prices have fallen by half.

"The cause of this disorderly competition is mainly the blind development of the tire industry in recent years." Zhai Hongzhen pointed out: "Since the rapid development of domestic road transport, the demand for tires has also increased, and tire companies have mushroomed. "As a major province of tire production, Shandong has accounted for 45% of the country's total output, and there are more than 200 tire export companies and factories in Shandong. It is understood that since last year alone, Dongying, Jiaonan and other places have added more than 40 tire export manufacturers. “Low-level redundant construction abounds,” says Si Hongzhen. “All-steel radial tires are high-end products in the tires, and a town in Shandong has gone on six production lines at a time, but its product quality is not ideal.”

At present, the domestic tire market is basically saturated. According to relevant investigations, the backlog of state-owned enterprises last year increased by 2.64%, and the inventories of foreign-funded enterprises increased by 43.05%. In this case, tire companies only have to export the "single wood bridge". The low-price competition in the international market has become the target of anti-dumping by others.

Add to the frost

The disorderly competition in the market has caused the price of the industry to continue to fall, and the rising prices of raw materials have given the tire companies a blow.

As we all know, China is a country with shortage of natural rubber resources, and raw materials mainly rely on imports. According to a survey conducted by the China Rubber Association, imported natural rubber was US$1,000/ton at the beginning of last year, and it has now risen to US$1300/ton, an increase of 30%. Domestic natural rubber has also risen from more than 10,000 yuan per ton to more than 13,000 yuan. At the same time, domestic synthetic rubber has also experienced significant price increases, which have increased by more than 50%. In the face of rising raw material prices, and disorderly competition with the downstream market, most tire companies are miserable.

The objective living environment is not as good as it should be, and the policy negative factors make tire companies even more vulnerable. Tariffs for natural rubber imports in 2001 were 12%, and were raised to 20% in 2002. There is a different view on this subject. Natural rubber is a shortage of resources in our country. Where there are shortages of resources in foreign countries, national imports will adopt low-tariff or zero-tariff policies. "Our country does not fall or rise. This virtually increases the burden on production companies."

There is still bad news coming. From this year, the country has made it clear that the tire tax rebate rate has dropped from the original 15% to 13%. Although there is only a two percentage point drop, only one of these factors will make those companies with large export volume lose millions of dollars a year. This item adds to the cost of the company.

Insiders suggested that the tires belong to the scope of production materials, and the consumption tax should be abolished. Currently, the consumption tax on biased tires is up to 10%. China's 32% of tire products are now inclined rubber tires, which are subject to consumption tax at 10% of sales revenue. Oblique rubber tire companies are almost unprofitable.

Price increase attempt

So how should domestic tire companies deal with the current unfavorable situation? Tan Yukun pointed out: "Product structural adjustment is a top priority for the development of China's tire companies." From the perspective of the development of the domestic automotive industry and the needs of foreign tire markets, most of the cars in developed countries and regions use radial tires. "In order to meet the needs of the market, China's tire export structure should shift from export bias tires to export radial tires, and it must shift from exporting products with low technology content and low added value to high technology content and high levels. Value-added products."

"In fact, China's tires also have their own brand, but the brand awareness of domestic companies is not enough." Yan Hongzhen suggested from another side. Last year, the China Tire Industry Association had named 10 tire brand companies to launch brand awareness in the national tire industry.

If brand strategy and structural adjustment seem to be far from being thirsty in the tire industry, then raising prices is an effective and effective solution to the problem.

It is understood that due to the skyrocketing prices of natural rubber, several well-known big tire companies in foreign markets have raised prices in December last year. Many domestic companies have adopted price increases. Tan Yukun pointed out that compared with imported tires, the price of China’s export tires is obviously low, so there is room for price increases.

Not long ago, the main person in charge of nearly 20 tire companies of the China Rubber Industry Association’s tire branch held a seminar on tire prices in Shanghai, focusing on the issue of unified price increases this year. The result of the final resolution is to raise the price of all-steel radial tires, which should be around 3%. The price increase for biased tires can be a little more, and the range of consultation should be between 3% and 5%. However, Geng Hongzhen added: "This formulation is an initiative and there is no real binding force. Especially in the current situation where the repeated construction is serious, the price increase can easily become an empty talk."