Chinese Tire Exports Surge Strengthening Global Position

With China's tire exports hitting an all-time high, Chinese companies are steadily advancing in the international tire market. According to recent data released by the General Administration of Customs of China, in the first half of this year, China exported a cumulative total of 4.28 million tons of tires, marking a 13.7% year-on-year increase, with export earnings reaching 74.923 billion yuan, a 19.9% year-on-year growth. This remarkable performance reaffirms China's significant role in the global tire market. Reporters have learned from domestic and multinational tire companies operating in China that a combination of factors, including continued demand both domestically and abroad, accelerated adoption of electric vehicles, and the influence of the Belt and Road Initiative, have created a favorable cycle for the Chinese tire industry.

Optimistic Market Outlook Data reveals that pneumatic rubber tires and automobile tires are the two main products in China's tire exports. In particular, during June, the export volume of pneumatic rubber tires surged by 23% year-on-year, reaching 810,000 tons, with export earnings totaling 14.253 billion yuan, a 22.7% increase. During the same period, 56.69 million units of pneumatic rubber tires were newly exported, showing a 16.7% increase. Notably, as of the first half of 2023, China has exported 300 million units of new pneumatic rubber tires, a 6.9% year-on-year increase. In the automobile tire segment, the export volume in June also saw a significant increase, reaching 691,000 tons, up by 23.9%, with export earnings of 11.705 billion yuan, an increase of 23.4%.

Performance forecasts from several Chinese tire companies for the first half of the year indicate that rising demand in overseas markets is a significant factor contributing to their profitability. Seizing the opportunity presented by the recovery of the domestic economy and strong overseas market demand, Chinese tire companies have achieved significant growth in tire production and sales by optimizing product and market structures and expanding brand influence. Li Xiaohui, Sales Manager at Tianjin Letchi International Trading Co., recently told the Global Times, "Compared to the same period last year, sales have increased by 20-30% this year. Orders are still plentiful, and we expect the market to remain strong. Looking at specific markets, Africa and Central Asia are performing exceptionally well."

Li Xiaohui analyzed that most of the world's tire production capacity is located in China, and due to past disruptions caused by the pandemic, many orders this year are actually compensating for those that were missed last year. Qingdao Senkiran Tire's Director Jin Shengyong informed the Global Times that various factors that previously hindered exports, such as surging shipping costs, long shipping cycles, and soaring raw material prices, have all been resolved. With raw material prices stabilizing and smooth maritime transport, the Chinese tire industry is currently in a favorable cycle, leading to an optimistic outlook for sales this year.

Chinese Companies Rise on the Global Stage Zhang Xiang, Guest Professor at the Yellow River Technology College, stated that in recent years, emerging markets like the Middle East have been a highlight for China's tire exports. "Countries like Iraq and Nigeria have shown significant growth in demand for truck and passenger car tires. China, as a major tire exporting nation, has long had a competitive edge in these markets due to the affordability of its products. The Belt and Road Initiative has provided substantial support for China's tire exports to the Middle East in the decade since its inception. Following the Russia-Ukraine conflict, some international tire suppliers withdrew from the Russian market, providing Chinese companies with a good opportunity to enter."

Zhang Xiang further stated that as Chinese tire companies continue to expand, the global market share of some international companies is declining. In 2003, the three international tire giants, Michelin, Goodyear, and Bridgestone, held over 55% of the global market share. However, by 2022, the market share of these three companies had fallen to around 36%. During this period, the strength of Chinese companies has continued to grow, with 34 Chinese tire companies ranking among the top 75 globally, demonstrating the strength of the Chinese tire industry.

Data provided by the U.S.-based "Research and Markets" website indicates that the global tire market was valued at $245.53 billion in 2022 and is projected to reach $374.51 billion by 2028. With an increase in automobile sales, rising demand for tire replacement, and the widespread adoption of electric vehicles, global tire demand is on the rise.

Mohammed Hamid, Export Manager at UAE tire exporter "Global Tire Company," analyzed that the sustained year-on-year growth of Chinese tire exports highlights the increasing importance of Chinese companies in the global tire market. These figures also demonstrate the competitiveness and quality of Chinese tire manufacturers, which are capable of meeting the growing global demand for tires. Chinese tire manufacturers continue to make strides in technology and improvement, producing higher-quality and more durable tires.

Behind the global export of tires manufactured in China is not only the "fruit of success" of domestic brands but also numerous international tire brands relying on the Chinese industrial chain. According to the Global Times, Bridgestone China's first new energy vehicle tire, produced at its Wuxi factory, was launched in China in 2021. While meeting the needs of the Chinese market, it is also actively exported to Asian markets such as Singapore, with plans to target Thailand, a "hub for electric vehicles" in Southeast Asia.

Striving to Become Major Players Amid Challenges However, with the rise of Chinese tire companies, they are also facing trade policy restrictions from some countries, such as anti-dumping investigations and anti-subsidy tariffs. Recently, the UK, the United States, the European Union, and Mexico have all initiated anti-dumping investigations against Chinese tires.

Jubair Ahmed, Commercial Relations Manager at UAE tire exporter "Global Tire Company," wrote that as high-end Chinese tire manufacturers enter the global market, consumer perception of brands and quality remains a major obstacle. He believes that despite significant progress in quality, the impression of Chinese companies primarily producing low-end products still lingers in the minds of consumers. Establishing a strong brand reputation will require more time, effort, and financial investment, and competing with well-known tire brands could be challenging.

He also mentioned that intellectual property is another major challenge for high-end Chinese tire manufacturers in the global market. However, by continuously investing in research and development, quality control, and brand development, high-quality Chinese tire manufacturers have the potential to become "major players" in the global tire industry."