In the past two years, the tire industry in China has been at a low point, and a number of data have continued to decline. Many companies struggling to support them have entered the ranks of the loss-making army. The further expansion of the loss amount and loss area indicates that the glory of the Chinese tire industry has abruptly ended. . Factors such as overcapacity, low technological content, and continued sluggish domestic and international environment have brought an unprecedented blow to the Chinese tire industry. The difficulties of the tire industry can be seen from a set of data. Recently, the China Rubber Industry Association announced a set of figures, statistics show that from January to May, accounting for the statistical enterprise tire production fell by 8.27%, finished product inventory (value) increased by 11.4%, sales revenue decreased by 14.32%, to achieve Profit decreased by 32.51%. Among the 42 statistical enterprises, the loss amounted to 436 million yuan, an increase of 171%, of which the loss of domestic-funded enterprises was 39,051 million yuan, an increase of 199.52%. With the "General Technical Specification for Composite Rubber" formally implemented on July 1, China has proposed a new standard for the concept of composite rubber, which stipulates that the raw rubber content should not exceed 88%. Prior to this, the rubber compound content of the rubber was 95% to 99.5%, and it enjoyed zero tariff for a long period of time. The formal implementation of the new regulations undoubtedly aggravated the difficulties of tire companies that had experienced difficulties, and Chinese tire companies fell into the trap of internal difficulties. Overcapacity lacks economies of scale If we look at the relevant industries, China’s auto production is at a steady growth stage, coupled with the drop in natural rubber prices, the prospects for Chinese tire companies should have been bright. Due to the interests, many tire companies have invested blindly without investigating market research, resulting in continuous increase in production capacity. From the previous supply shortage to overcapacity, the decline in demand has resulted in a decrease in the operating rate of tire companies. Prices have also continued to fall, thus shrinking profits. “The main reason that led to the decline in the profits of domestic tire companies is overcapacity. Based on this situation, companies have to reduce sales prices in order to seize the market, resulting in a decline in profits.†Zhu Yun, tire analyst, said. According to quarterly reports released by listed tire companies, revenues and profits of tire companies, including Aeolus, Double Money, Goodyear, and Hankook, have both declined significantly year-on-year. According to industry sources, the traditional tire industry has low barriers to entry, low investment costs, coupled with poor market information communication channels, blind investment phenomenon is relatively common, the industry's low level of repeated investment status is serious, and the tire industry has excess product structure. Some local governments, in pursuit of outstanding achievements, are pursuing the expansion of the tire industry, ignoring the actual bearing capacity of market capacity, and even lowering the barriers to entry into tire companies, thus contributing to the investment boom in backward tire production. Jiang Yun told the media that after 2010, domestic tire companies have reached saturation. By 2012, the problem of overcapacity began to appear. Today, the structural excess capacity of tires is even more serious. The media has learned that there are more than 300 large and medium-sized tire companies in China, which are not standardized, and there are even more unregistered small enterprises. The industry’s production capacity is far greater than the demand. Taking the all-steel radial truck tires as an example, the current annual production capacity is about 130 million sets, but the market demand is only 80 million units, and the market's production and demand are upside down. Lack of technical content of products is also one of the reasons for the decline in sales. According to statistics, about 65% of domestic radial tires and light truck radial tires are currently mid- to low-end products. The common problems of these products are low technical performance, serious homogeneity, and fierce market competition. Due to the low technical content, it is difficult for China's low-end products to enter the international market. Even if they go abroad, it is difficult to compete with other international brands for market share, making the development of sales channels for Chinese tire companies obstructed. At the same time, many foreign tire manufacturers have set up factories in China, further eroding the already few domestic markets. Recently, it was reported that the second phase of the Hankook Tire Chongqing plant (car tires for passenger cars) was put into operation. The second phase of the production will add 6 million new production capacity, which will bring the total production capacity of Hankook Tire in Chongqing in 2015 closer to 7 million. This also means that Hankook Tire has further increased its presence in China. Frosted tire companies are struggling As a result, China’s tire companies are struggling with the current stage of development. Another issue that cannot be ignored is the adjustment of national policies. This will also have a significant impact on domestic tire companies to a certain extent, which may cause the industry to face a new round of reshuffling. A senior rubber analyst revealed to the media that the "General Technical Specification for Composite Rubber" formally implemented on July 1st this year is really worse for Chinese tire companies whose profit margins are declining year by year. Cnc Edm Wire Cutting Machine,Cnc Wire Cut Machine,Wirecut Machine,Cnc Wire Cut Machine Working Taizhou Jiangzhou CNC Machine Tool Manufacturing Co.,Ltd , https://www.machinetzjz.com
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