Sailun acquires Bridgestone Shenyang factory

Sailun Acquires Bridgestone Shenyang, Gaining Prime Production Assets

On July 14,  Sailun Group announced that its wholly owned subsidiary, Sailun (Shenyang) Tire Co., Ltd., would acquire 100% equity of Bridgestone (Shenyang) Tire Co., Ltd. for RMB 265 million, with a share transfer agreement signed the same day.

The plant, Bridgestone’s first production base in China since 1996, includes 394,900 m² of land use rights, 200,700 m² of buildings, and an annual production capacity of 1.7 million all-steel radial truck and bus tires (TBRs).

Although Bridgestone shut down the plant in 2024, and its net assets fell to RMB 337 million in H1 2025 due to internal debt restructuring, Sailun acquired it at a 21% discount—with no labor resettlement obligations—essentially purchasing land and facilities free of operational liabilities.

Faster Capacity Expansion at Lower Cost

Industry analysts view this acquisition as highly strategic for Sailun:

Significantly shorter construction time compared to building a new plant of similar scale (estimated to cost RMB 1–1.5 billion);

Adds capacity amid high utilization rates across Sailun’s operations;

Strategic location near major OEMs like FAW in Shenyang, helping expand OE markets and reduce logistics costs;

High operational flexibility, with the option to upgrade or replace existing equipment without legacy burdens.

Risks & Challenges: Loss-Making Asset, Market Competition

Despite its advantages, the deal comes with several potential risks:

Heavy historical losses: Bridgestone Shenyang lost RMB 480 million in 2024 and RMB 564 million in H1 2025;

Severe industry overcapacity and homogenization, with many Chinese tire makers expanding aggressively;

Reinvestment required for equipment renovation, supply chain rebuilding, and market development;

External risks: global tariffs, raw material volatility, and regulatory shifts could impact execution.

Sailun stated it would closely monitor construction and operations, with contingency measures ready for any emerging issues.

Behind the Deal: Global Exit vs. Domestic Consolidation

The transaction reflects two major structural shifts in the tire industry:

Global brands retreat: Bridgestone has exited China’s commercial tire market, closing plants worldwide. Similar moves were seen from Continental (ending agri-tire production), Michelin (selling Camso), Goodyear (exiting OTR), and Dunlop.

Chinese brands expand: As global demand shifts and price sensitivity increases, Chinese tire makers leverage their cost-performance edge to integrate domestic idle assets and build a “low-cost domestic base + overseas risk-diversified capacity” strategy.

According to rough estimates from CheYuanchezhe, 30 foreign-owned tire factories closed between 2024–2025, with over 10 million units of production capacity removed and thousands of jobs lost—many of which are now absorbed by Chinese firms.

Outlook: Growth Opportunities Amid Pressure

Despite intense competition and margin pressure, China’s tire market remains resilient:

EV growth fuels demand for high-performance tires;

Export share continues rising, strengthening China’s global position;

Domestic manufacturing remains a stable source of employment and capacity.

Sailun’s acquisition is not just a strategic expansion move, but also a strong signal of China’s rising influence in the global tire value chain.