Mar 04, 2017
The growing pressure on the Chinese tire manufacturers will soon lead to the long-expected departure from the sector of small producers, says analyst David Shaw tire market (David Shaw), specializing in China.
According to his estimates, the number of tire manufacturers in China reaches six. "There's a complete mess, and, of course, in the next two years, 70-80% of producers leave the bus industry", - he said.
"In China, there are plans to leave four large bus company and develop this business, but it is unknown whether they will be implemented," - said Shaw, speaking at a conference Tire Technology Expo in Hanover in February this year.
According to David Shaw, the smaller Chinese manufacturers face a variety of problems, and not least the influence of the current surge in raw material prices on margins, as well as to poor positioning in the market. In addition, they feel increased competition from Western tire manufacturers.
Many Chinese tire companies, the analyst noted, work on very low profit levels, and prices are falling on Chinese tires worldwide.
In addition, in China there is an excess of production capacity of low-quality tires with a diameter of 13-15 inches and a lack of facilities for the production of tires with a diameter of 17-18 inches for the SUV class cars and other high-end cars.
It must be remembered that the Chinese industry is also influenced by emissions of the government's efforts to address problems related to the manufacture of tires, said Shaw.