China's tyre makers nervous about 2012

ERJ staff report (DS)

Beijing, China -- China's tyre makers are not optimistic about the coming year, according to a Chinese-language report on the website of the China Rubber Industry Association (CRIA). Zhang Wanyou, Vice General Manager at Double Coin Holdings Limited said "Next year may be more difficult than this year, the situation is more complex, companies are likely either to reduce the operating rate, or cut stocks. The pain now may last 2 to 3 years."

Ni Jie, general manager of tyre sales at Hangzhou Zhongce Rubber Co said, "2012 will be a very challenging year. The growth rate of domestic car production and sales are dropping, little growth in tyre demand, but production has increased dramatically, because by the Yuan 4 trillion million investment boost to the tyre industry in 2009." He said tyre factories made up to 5 million units/year, but now 20 million is not unheard-of. he said this is leading to over-capacity.

Fu Xiangdong deputy general manager of Guangzhou South China Rubber Tire Co., Ltd. said the EU labellin glaws will significantly affect demand from EU consumers. Also, reduced sales of Winter tyres in Europe due to the mild weather means ther is now a lot of stock and cash tied up in the supply chain. He said exports to Europe is not optimistic. This is indisputable.

Lifa Rong, vice president of Triangle Tyre Co. said the wave of environment-related legislation is an inevitable trend and Chinese manufacturers must respond aggressively to this new trend.

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Report from China Rubber Network (Chinese language)

Above report auto-translated from Chinese