May 06, 2024

Low growth in tire industry will become normal


Two years ago I said two words about the tire industry: excess capacity, insufficient supply. This sounds contradictory, but our current situation. According to the statistics of the Tire Association, the overall capacity of the tires is over 15% to 20%, but such a serious overcapacity cannot satisfy the demand of our team's high-end tires. So, our tire industry is a structural surplus.

In fact, the automotive industry is a highly concentrated industry. However, our tire companies are just like the domestic white goods. They are scattered and have a lot of homogeneity. For example, we claim to have 500 tire companies, but all the specifications of the Chinese tire industry add up to 500, not as many as Michelin. In this situation, industry consolidation is an inevitable trend.

In fact, integration has already begun. For example, the merger of Michelin in China, such as mergers and acquisitions of double money, has also begun in various places. The result of this integration, in my opinion, may be a severe self-healing injury to the warrior. In the future, the low-cost road may not go too far, and the road of quality may lead the industry. The increase in this direction must be slow.

On the other hand, as the world’s largest tire manufacturing and exporting country, the internationally decadent economic situation has also raised new issues for our industrial transformation. In the face of serious excess capacity, disorderly and fierce market competition, the tire industry itself is very difficult to break through, and the growth rate is naturally not fast enough.

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