Blue Book Issued on International Competitiveness of China Tire Enterprises

On the afternoon of May 15, 2019, the first day of the opening of 10th China International Rubber Tire & Auto Parts Exhibition, the 5·15 China International Tire Day, as an important part of the activities in the same period of the exhibition, opened in Guangrao, Shandong province. At the forum, the Automotive Brand Competitiveness Research Group of the China Chamber of International Commerce (CCOIC) officially released the China Tire Enterprises International Competitiveness Blue Book(hereinafter referred to as the Blue Book), which is also the first domestic research blue book with the theme of overseas competitiveness of tires.

Fan Peikang, Chairman of the Research Group on Automotive Brand Competitiveness of China Chamber of International Commerce, introduced at the Blue Book Release Conference that, to sort out the overseas competition of China’s tire enterprises and promote their level of “going abroad”, the research group had invited experts in the industry, taking advantage of superior resources, to focus on the research on overseas competitiveness of China’s tire enterprises based on results of the special research Belt and Road(B&R) China Automotive Enterprises Overseas Competitiveness Blue Book released the last year. The Blue Book analyzes the current competitiveness situation of tire companies, the market trend as well as challenges of going global they face. Besides, some countermeasures and suggestions are given in the report.

According to statistics from the Blue Book, in 2018, China exported around 486 million new pneumatic rubber tires, accounting for about 60% of the total annual production of rubber tires; the value of these exports reached more than 100 billion yuan. Among them, the export of automobile tires exceeds 300 million, accounting for about 60% of the total export of rubber tires.

The proportion of China’s tire exports in tire output(2010-2018)

The proportion of China’s automobile tire exports in rubber tire exports (2010-2018)

In terms of export destinations, in 2018, over 40% of Chinese passenger car tires were exported to the U.S. and European markets, which account for more than 30% of Chinese commercial vehicle tire exports as well. These figures, in general, basically meet the industry’s projected export target. The concept “going global” has become a powerful means for most tire enterprises in China to achieve some breakthroughs and realize brand transition. The export scale is expected to remain at a relatively high-level for some time to come.

“China’s tire enterprises still face a series of problems about their competitiveness in the global market: low export prices, inadequate strategies regarding premium pricing, a lack of overseas brand identity and the resilience of overseas business system, all of which have largely impeded the tire exports.” Fan Peikang stressed, “Dynamic changes of international politics, economy, social environment and related industries have brought many challenges for tire companies, turning out to be difficulties and pain points they have to tackle.”  

In response, the Blue Book puts forward several countermeasures and proposals including improving government macro regulation to relieve enterprises’ financial burden through tax relieves and fee reductions; intensifying market development in countries along the routes of  B&R; expanding overseas distribution channels and brand construction; encouraging collaborations among muti-industry brands to form a more stable supply chain for accelerating the process of overseas localized production and assembly.

In the face of continuous changes and development of the world tire industry pattern, China’s tire export market is getting out of the “first half” involving scrambling and immature occupation of market, and setting foot in the “second half” of deeper and wider exploration for overseas market.  In order to better serve Chinese tire enterprises and assist them in carrying out overseas business, the China International Chamber of Commerce (CICC), in conjunction with Car Research, a professional third-party consulting service organization, established the CICC Research Group on automobile brand competitiveness, and officially conducted relevant research work in October 2018. The group has carried out field research and case analysis on some state-owned and private tire enterprises such as Shuangxing, Linglong, Sailun, Sen Qilin, Wanda Baotong, as well as cluster research and benchmark analysis respectively on the tire industry in Guangrao County, Shandong Province and some international well-known tire enterprises.

In an interview after the forum, Jia Jiangwei, senior vice-president of Car Research and executive deputy-leader of Automotive Brand Competitiveness Research Group of CCOIC commented: “With the further implementation of BRI and international industrial-capacity cooperation, an increasing number of tire enterprises in China will benefit from an improved global business environment. Our research group will continue focusing on the 'going abroad' drive of China's tire industry, carrying out more targeted research work based on the Blue Book, in the hope of  helping Chinese tire enterprises, on the basis of consolidating the export scale, enhance their core competitiveness and build up the confidence of both the enterprises and the industry.”