China's Tire Market Recovers Strongly in 2022

At present, the Chinese tire market is showing a momentum of recovery, but major tire companies around the world are uncertain about the direction of the Chinese market in the second half of the year and are worried about it.

Several tire manufacturers said that the Chinese government will not abandon the "dynamic clearing" epidemic prevention strategy, and this uncertainty may affect the Chinese tire market until the end of the year.

In the first half of 2022, the resurgence of the domestic epidemic had a significant impact on the Chinese tire market, especially in the second quarter. Market data included in Michelin's interim report details this.

In the first half of this year, China's passenger car tire OEM market sales totaled 54.2 million, which was basically the same as the same period last year. The market, however, is caught in a "two-quarter game": sales rose 6% year over year in the first quarter and fell 6% year over year in the second quarter.

However, the market saw a sharp recovery in June as virus restrictions were eased. Several tire companies are reportedly looking for ways to continue operating amid the crisis. For example, Michelin reported in July that Chinese passenger car tire demand "rebounded to above 2019 levels in June" as restrictions eased. Before that, the epidemic in April and May caused a "new low" in tire demand in China.

In a first-half results meeting on Aug. 4, Pirelli executive vice-chairman and chief executive Marco Tronchetti Provera said the situation in China was "gradually improving", but added that "uncertainties related to the lockdown remain."

A recovery in China's auto production and government incentives to buy new cars, especially electric vehicles, supported a "significant rebound" in the OEM tire business in June, and tire replacement demand returned to normal levels, he said. On the other hand, the epidemic in China is on the rise again, which may lead to new blockades, and market growth may slow down.

On August 5, Rich Kramer, chairman, CEO and president of Goodyear Tire, also pointed out that the recovery of China's tire market and the enhancement of consumer confidence are "encouraging signs."