Indeed, Chinese officials have signalled a trend towards assets reorganisation of state-backed companies and policies that would favour the development of larger and stronger tire manufacturers.
According to Xu, the Chinese government has an aggressive plan to cut 40 percent of production by 2020 – mainly by beefing up its regulation of the industry.
New regulations, she said, will place tougher requirements, particularly on smaller companies and new entrants, in terms of emissions, energy efficiency and the environmental impact of tires being produced.
In late 2014, the government introduced “market access conditions” for the tire industry with new regulations regarding environmental protection.
Commenting on the conditions at the time, Zhu Hong, head of CRIA’s technological and economic committee said “a majority of smaller companies with high energy- and material- consumption will find it rather difficult to comply.”
The tightened environmental regulations, according Xu, can be a helpful lever in the drive to consolidate the industry which is now shifting its focus from quantity to quality.
Xu also told ERJ that she expected that the Chinese tire industry would become more focused on “tire technology innovation and tire branding.”
The main current driver for change in the Chinese tire industry is the imposition of anti-dumping tariffs and countervailing duties by the US against imports of passenger car ties from China.
The tariffs almost halved China’s passenger car tire exports to the US last year in both volume and value terms, to 314,000 tonnes and $874 million, said Xu.
Truck and bus tire exports from China to the US, meanwhile, decreased by 10 percent in volume, to 590,000 tonnes, and 21 percent in value, to $1.5 billion.
“The ratio of passenger car tire exports to the US overall dropped from 29 percent in 2014 to 18 percent last year, and the same thing is likely to happen to truck and bus tires in light of the ongoing anti-dumping probe,” said Xu.